International Trade in Environmental Goods and Services and Sustainable Production and Consumption

Abstract

Recent decades have been marked by a growing awareness of the importance of environmental issues. The interrelation between trade liberalization and protection of the environment is becoming increasingly clear, although a balance between them has proved difficult to strike. The desire for sustainable consumption can play an important role in the search for this balance, helping in the adoption of eco-friendly production and consumption patterns. In this scenario, environmental goods and services (EGS) have great potential because they are directly related to the generation of positive externalities (e.g., water, soil and air decontamination) and the reduction of negative externalities (e.g., reuse of materials and correct disposal of chemical products). The expression ‘environmental goods and services’, however, is not clearly defined; its meaning varies according to the context, as well as the emergence of new technologies. This chapter takes up the question of EGS in the context of trade. In so doing, it explores the following five themes: (1) the various definitions of EGS; (2) environmentally preferable goods and services and sustainable consumption; (3) the characteristics of the environmental goods and services sector; (4) the treatment of the subject matter in international trade agreements and; (5) future trends.