Publications

Trade and Investment Rules for Energy

IV. Promoting Trade in environmental Goods and Services

Background

Doha Round Developments
Paragraph 31 of the Doha Declaration gave a mandate to negotiators "[w]ith a view to enhancing the mutual supportiveness of trade and environment" . . . to seek "(iii) the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services." In the course of negotiations under paragraph 31, various proposals were tabled on EGS classification. The WTO Secretariat prepared a summary of these as of mid-2005, dividing them into: (a) the environmental project approach; (b) the establishment of a multilaterally agreed list of environmental goods; and (c) the integrated approach. The Secretariat paper lists a total of 480 products proposed as meeting the EGS definition.

In the course of events, the Doha Round negotiations encountered difficulty in agreement on reduced tariff treatment for EGS and on other EGS market access measures. While a number of the foregoing proposals ere in play when the negotiations were suspended in July 2008, governments had not yet agreed on EGS as a separate category. However, a number of these documents can be harnessed as a basis for further work in this area.

A proposal was tabled by a number of like-minded countries to divide EGS into: (a) low-carbon fuels, such as ethanol and biodiesel; (b) goods produced for renewable energy, such as solar cells or wind turbines; and (c) environmentally preferable products, such as energy-efficient refrigerators and appliances.
An UNCTAD study (based on work done in the OECD) broke down EGS into: (a) equipment (such as for water supply and delivery, waste water treatment, waste handling, air pollution control, laboratory testing, and waste prevention technology); (b) services (such as engineering design, construction and management of utilities, collection and treatment of waste waters, waste collection and processing, hazardous waste management; remediation services, etc.); and (c) resources (such as water, recovered minerals, and renewable energy).
An April 2007 proposal by Japan, the E.U., the U.S., Canada, and other countries listed 153 products that could qualify as EGS, including air pollution control technologies, renewable energy technologies, and equipment for wastewater treatment.
Reports issued by the World Bank Group, U.N. Energy and other agencies within and outside the U.N. system (many of which are collected in WEC's companion document, Phase One Report: Inventory of Current Trade and Investment Activities, 2007) provide additional ideas for dealing with EGS.

Non-WTO Developments

A joint E.U.-U.S. proposal (November 2007) outside the Doha Round called for Tariff and Non-Tariff Barrier (NTB) reductions for a wide array of climate friendly technologies and services, laying the basis for an eventual separate agreement on EGS outside the Doha Round structure. The value of trade covered by the E.U.-U.S. proposal was estimated (in 2006) at U.S. $613 billion.
At the July 2008 G-8 Summit in Hokkaido, Japan, the leaders called for the lowering of tariffs and other trade barriers to environmentally friendly energy goods and services. The communiqué read in part:

"Efforts in the WTO negotiations to eliminate tariffs and non-tariff barriers to environmental goods and services should be enhanced with a view to disseminating clean technology and skills. Additionally, consideration should be given to the reduction or elimination of trade barriers on a voluntary basis on goods and services directly linked to addressing climate change."
APEC members proposed special treatment and improved terms of market access for EGS in the Sydney Declaration of September 2007, stating that trade liberalization for EGS would "advance the climate and security goals" of member countries.

Each of the above, along with others, can assist WEC in moving the matter forward irrespective of whether the Doha Round is reactivated.