Facilitating Trade in Services Complementary to Climate-friendly Technologies

by Joy Aeree Kim

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Although they count for 80 percent of the total environmental goods and services (EGS) market, environmental services in international trade negotiations tend to receive little attention. And despite the pressing need for action on climate change, many fail to consider the ways in which services can help address this massive environmental challenge.

This paper challenges these norms of neglect by taking a close look at trade in the services that are essential for the development and dissemination of climate-friendly technologies. The paper reveals which services can be linked to action on climate change, what barriers are impeding trade in these services, and what commitments governments have made on lifting these barriers. As such, the paper provides valuable insights for both the specific negotiations on EGS and for negotiations on services in general.

Interestingly, this paper shows that there are significant economic and environmental benefits to liberalizing trade in environmental services that address climate change and the goods that are indispensable for delivering them in tandem. It also shows that despite these advantages there remain many challenges to realizing them.

The study builds on a series of recent ICTSD studies that map and classify climate-friendly goods and analyse trade patterns, drivers, and barriers in such goods. As this paper shows, a vast range of services across multiple sectors appears to be related to implementing climate change policies. The paper covers multiple key mitigation sectors identified by the Intergovernmental Panel on Climate Change (IPCC): energy supply, transport, buildings, industry, agriculture, forestry, and waste. In doing so, the paper goes beyond the issue of market access and national treatment and points to a variety of domestic laws and regulations, such as those regarding government procurement.

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