Environmental Goods Agreement Research Articles

The EGA Negotiations: Why They Are Important, Why They Are Stalled, and Challenges Ahead

Decade-long negotiations on the reduction of tariffs on Environmental Goods (EGs) at the Doha Round using a list approach to define EGs, failed to produce an agreement. In July 2014, fourteen countries entered plurilateral negotiations under the ambit of the WTO. If successful, the resulting Environmental Goods Agreement (EGA) would have eliminated tariffs on a list of EGs. These negotiations broke down in December 2016. This article documents this episode and the mercantilistic behaviour of negotiators that prevented agreement on an extended list of EGs, a prerequisite for a meaningful outcome for the environment. A conclusion of the EGA negotiations under the current narrow agenda focusing only on tariffs could help build trust to go further but would be insufficient to help mitigate climate change, even if a critical mass were to be reached allowing extension of the tariff reductions to all WTO members. This is because average tariffs for the negotiating group are too low (1.5%). Extending the agenda to include Non-Tariff Barriers (NTBs) and Environmental Services (ESs) remains the acid test for an EGA to address meaningfully the climate change challenge. Reaching agreement on how to tackle NTBs and ESs will require delegating negotiating authority to independent scientific experts and probably modifying WTO rules. Aligning the trade and climate regimes will call for transformational changes in the WTO contract to take into account transnational externalities and public goods. This would amount to a shift from the present negative contract where countries are free to choose their policies so long as they do not discriminate between domestic and imported goods to a positive contract where WTO members have to pursue similar climate-friendly policies. Environmental goods, Environmental services, EGA, WTO, trade and environment,

The impacts of the trade liberalization of environmental goods on power system and CO2 emissions

The trade liberalization of Environmental Goods (EG), through as Environmental Goods Agreement (EGA), is crucial in low carbon electricity technology diffusion. However, there is a big gap of the EG definition lists and the integrated effectiveness analysis of EGA. This paper analyses the effects of the trade liberalization of EG based on macroeconomic and electricity sector models and attempts to find a more efficient EG trade policy by comparing different EG lists, considering end-use control and combining the EG policy with a carbon tax. The results show that the trade liberalization of EG does not necessarily benefit the environment without other policies, as the effects of the multiple end-uses of EG on conventional energy might result in environmental damage. We find that merging an EGA into a global carbon tax system would enhance the effects of carbon tax on CO2 reduction by 33%, and simultaneously lower the GDP loss due to the carbon tax by 75%. The economic benefits from the EGA could offset the costs of other environmental policies. Thus, end-use control and other environmental policies should be considered at both the global and regional levels in the setting of international trade agreements that target EG.

Barriers to trade in environmental goods: How important they are and what should developing countries expect from their removal

Abstract Few developing countries have participated in the environmental goods agreement (EGA) negotiations to reduce barriers on trade in Environmental Goods (EGs). Reasons for this reluctance are first reviewed along with a comprehensive description of barriers to trade (tariffs and NTBs) on two lists of EGs used in negotiations: the APEC list comprising mostly industrial products representative of high-income countries that served as point of departure on the negotiations for an Environmental Goods Agreement (EGA) and a list of Environmentally Preferable Products (EPPs) more representative of the perceived interests of developing countries. The paper then revisits and extends the literature on the estimation of barriers to trade in EGs for these lists. These estimates are carried out with a structural gravity model with: (i) new data on bilateral (rather than MFN) tariffs, and a new classification of NTBs; (ii) a measure of regulatory overlap in bilateral trade. Results show that tariffs reduce the intensity of bilateral trade. Regulatory harmonization, as captured by an increase in regulatory overlap is also estimated to be conducive to more intense bilateral trade.

Paradigms in the trade–climate nexus: ‘liberal environmentalism’, the Environmental Goods Agreement and the role of the EU

What explains the evolution of negotiations on liberalising environmentally friendly goods and services over the past 15 years and the EU’s position on these? In December 2016 negotiators did not succeed in their goal of concluding an Environmental Goods Agreement (EGA) in Geneva. This was considered by many participants and observers as a missed opportunity for a win-win for the global economy and the environment. Protectionist wrangling over which products should be on a list for speedy liberalisation was seen as the main reason why the negotiations (temporarily) failed. However, we show that the environmental objectives of these negotiations had already gradually been pushed to the back by commercial objectives. While there had been attempts in early phases of the negotiations to make the environmental effects of goods primordial, in the end a commercial logic prevailed. We point to the importance of the paradigm of ‘liberal environmentalism’, which makes it difficult to promote trade-conditioning measures in an already commercially biased policy subsystem. We focus particularly on the EU as one of the key actors in the EGA negotiations. Through a number of interviews with European policy-makers and civil society representatives, and desk research of negotiating documents and secondary literature, we find evidence of the prevalence of liberal environmentalist thinking, the dominance of trade actors in the policy subsystem and difficulties for environmental actors to penetrate these negotiations. We conclude that trying to reconcile trade and environmental objectives in a synergetic (‘win-win’) manner does not make a successful conclusion necessarily easier.

The Role of An Environmental Goods Agreement in the Quest to Improve the Regime Complex for Climate Change

The environment-trade nexus requires action. Environmentalists have claimed that the interests of the trade community, as represented at the WTO, would trump environmental concerns while trade specialists have claimed that an open trading system is key to meet the environmental challenge facing us. After a decade-long negotiation at the WTO on the reduction of tariffs on environmental goods (EGs) failed to produce an agreement, in 2014 a group of 14 countries entered plurilateral negotiations aiming for an Environmental Goods Agreement (EGA) that would have substantially reduced or eliminated tariffs on a long list of EGs. This also failed. This paper discusses the hurdles faced by these negotiations, the resulting stalemate, and avenues for reviving the negotiations. We argue that conclusion of the EGA negotiations under the current narrow agenda would help build trust to go further but would produce only very modest gains. Extending the agenda to include non-tariff barriers (NTBs) and environmental services remains the acid test for an EGA to address meaningfully the climate-change challenge.

Paris Needs Geneva, and Vice Versa

AbstractThis paper proposes and seeks to explain how the launching of a new negotiation on trade in carbon‐reduction‐related goods and services in Geneva could help to restore the effective market penetration of the Paris Agreement mechanisms, and how the subsequent implementation of the Paris Agreement can revitalize the so‐called ‘paralyzed WTO‘ at Geneva. It suggests that new negotiations be dedicated to the liberalization of trade in goods that relate closely to greenhouse‐gas reduction. Drawing on experiences from the stalled Environmental Goods Agreement (EGA) negotiations, this narrowing of the scope of the talks might help establish a clear theme, thus avoiding potential conflicts of interest among the negotiating parties. Moreover, if the market penetration of green technologies is to be advanced effectively, negotiations must cover trade in related services (e.g. systems engineering) as well. Inclusion of services can also mitigate the ‘critical mass’ concerns inherent in the goods‐only context. Improving market access to government procurements and facilitating technology transfer in carbon‐reduction sectors will help to spread green technologies globally, and could be the topic of the new framework. In the end, the paper envisages a scenario of high participation and offers a possible approach to the initiation of new talks.

Comment on “The Future of East Asia’s Trade: A Call for Better Globalization”

Comment on “The Future of East Asia’s Trade: A Call for Better Globalization”

Enabling the Energy Transition and Scale-Up of Clean Energy Technologies: Options for the Global Trade System – Synthesis of the Policy Options

The urgency of climate-change mitigation is well-accepted. Yet, the scale-up of clean energy which it requires is hampered by numerous trade-related obstacles and a lack of clear governance frameworks on trade and clean energy that increase costs of clean energy technologies (CETs) as well as increasing uncertainty for investors. This article proposes a number of policy options to address obstacles to trade in CETs, improve energy trade governance, and use trade policy proactively in support of clean energy. Whereas many of the systemic options are challenging, requiring a great degree of convergence among the full WTO membership, short-term proposals more easily within reach are also identified. A variety of options are also suggested for improving market access. Relevant policy processes, including regional trade agreements, the Environmental Goods Agreement (EGA), and the Trade in Services Agreement present interesting opportunities for implementing several of these options. The article further proposes that existing policy space, in particular in the area of subsidies, needs to be clarified, and in some cases strengthened.

Clean Energy Trade Governance: Reconciling Trade Liberalism and Climate Interventionism?

ABSTRACTScaling-up clean energy is vital to global efforts to address climate change. Promoting international trade in clean energy products (e.g. wind turbines, solar panels) can make an important contribution to this end through business and market expansion effects. If ratified, the landmark Paris COP21 Agreement will commit states to firmer climate actions, this necessarily requiring them to strengthen their promotion of clean energy technologies. Well over a hundred countries already have active policies in this area, many including industrial policy measures that impact on the international competitiveness of their clean energy sector. At the same time, governments have gradually liberalised their clean energy trade regimes, and large producers are negotiating an Environmental Goods Agreement (EGA). Clean energy trade is expanding and disputes among nations in this sector are growing. The World Trade Organisation (WTO) still has limited ‘policy space’ for climate action. Meanwhile, the United Nations Framework Convention on Climate Change (UNFCCC) still had narrow and infrequent connections with trade matters. Moreover, WTO-UNFCCC engagement on trade-climate issues overall has been largely confined to information sharing and secretariat-level dialogue. This paper explores the extent to which clean energy trade is currently governed, where certain governance gaps and deficiencies exists, and argues why addressing them could help expand trade in clean energy products. It also contends that the most fundamental challenge for the future governance of clean energy trade concerns how to reconcile ramped-up interventionist climate action with an essentially liberal trade order.

Using Trade for Achieving the SDGs: The Example of the Environmental Goods Agreement

Ensuring that trade contributes to sustainable development is an explicit objective of both the WTO and of the 2030 Agenda for Sustainable Development (including the Sustainable Development Goals or ‘SDGs’). The purpose of this article is to demonstrate how trade and technology together can be mobilized for achieving the SDGs and in particular for addressing climate change. The article first discusses the general linkages between trade, technology, sustainable development, and the SDGs. Then the article explores the contribution that trade in environmental goods and services (EGS) and the Environmental Goods Agreement (EGA) more specifically can make to achieving different SDGs. This assessment is among others based on a recent European Commission Sustainability Impact Assessment (SIA) on the EGA. The article therefore assesses the potential economic, environmental, and social impacts of the EGA. It rounds up by explaining the state-of-play of the EGA negotiations. The assessment was conducted through desk research, econometric and C02 modelling, and stakeholder consultation, including two regional workshops and an open questionnaire.

Breathing Life into the List: Practical Suggestions for the Negotiators of the Environmental Goods Agreement

Participants in the Environmental Goods Agreement (EGA) negotiations, launched in January 2014 by 14 WTO Members, face a fundamental and defining decision: will the final agreement aspire to create a living list of environmental goods, or will the list in the ratified agreement be final? This paper identifies basic ingredients that are needed for such a living list to function and offers concrete examples of ways in which those elements might be embedded.•A definition of environmental goods in the context of the agreement is not a luxury for a successful EGA; it is a cornerstone. The WTO’s ITA has struggled unsuccessfully since 1997 to review and revise its coverage, in no small part because there is no agreed definition of information technology products.•The EGA could follow the example of other international treaties, relying on an expert advisory body to assess goods proposed by EGA participants, and to recommend to the participants whether those goods should be added to the list.•While the necessary prerequisites for a living list are not easy, they are worth the effort. The resulting agreement need not be overly complex or recklessly experimental; other regimes provide examples of solutions that are straightforward to create and administer. Getting it right is imperative if the EGA is to fulfill its potential and promise: to help trade contribute to shared environmental priorities.