Environment Regulations and Trade in Environment Goods: The Case of India

Abstract

The paper weaves together three strands of arguments which, favour trade in environment goods for achieving sustainable development and provides an analyses of potential for trade in environment goods in India. Firstly, there are different paths, models, tools for achieving sustainable development and green economy is one of them. United Nations Environment Programme (UNEP) defines a green economy as one that results in “improved human well-being and social equity, while significantly reducing environmental risks and ecological scarcities” (UNEP 2010). The report suggests trade in environment goods and service as one of the strategies towards achieving green economy and sustainable development. International trade is an important engine of development and sustained economic growth. Studies have shown that trade does lead to environment degradation, but trade in cleaner technologies and environment goods can play an important role in sustainable development. Trade can become a powerful vehicle for transferring environmental friendly technology between countries, paving way for sustainable development. India stands to benefit both, from importing environment goods to clean up its environment and exporting environment goods to the world, thus contributing to the goal of sustainable development. Secondly, the 2001 Doha Ministerial Declaration urged members to reduce or eliminate tariff and non-tariff barriers on environmental goods and services, paving way for a triple win situation for trade, the environment and development (WTO, 2001). The reduction or elimination of tariff and non tariff barriers would increase trade in environmental goods which, can help mitigate the adverse impact of increased economic activity on environment. The quality of life of citizens would improve due to better access to clean water, air, sanitation, and clean energy. Moreover, the liberalization of trade in environmental goods will enable developing countries to obtain technology, tools for development addressing environment priorities. Thirdly, new environment regulations, trade liberalization, increased privatization, current programmes of rural electrification, investment in infrastructure projects, government investment in research and capacity building initiatives have increased demand for environmental goods in India. India is partner to a number of international agreements on environmental issues. Legal activism and pressure from NGOs have fostered networking between industries and between industries and NGOs for improving the environment. These pressures from above and below are supporting the growth of the environmental market. It is in this context that the paper examines trade in environment in India.
 
 Keywords: OECD and APEC list of Environment goods, exports, imports, Revealed Comparative Advantage
 
 JEL Classification: F10, F18