Trade Liberalization and the Environment: Experiences from UNEP Country Projects

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Trade Liberalization and the Environment
Experiences from UNEP Country Projects
CCAD Agenda 21 Comercio y Medio Ambiente
Tegucigalpa, Honduras, 13-14 December 2001

• Robert Hamwey
• Economics and Trade Branch (ETB)
• Division of Technology, Industry
• and Economics (DTIE)

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Plan of Presentation
?UNEP Economics and Trade Branch ? UNEP Country
Projects ? UNEP-UNCTAD CBTF ? Discussion
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Economics and Trade Branch
UNEPs center for Trade-Environment Located in
Geneva Active Cooperation with UNCTAD and
WTO Regular contact with Geneva
Missions Working closely with UNEP Regional
Offices (e.g., UNEP-ROLAC)
Who we are
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Economics and Trade Branch
Assessment of the impacts of trade and trade
liberalization on the environment Design and use
of economic instruments for environmental
management Global governance MEAs and the
WTO Other issues IPRs, subsidies,
investment, finance, precautionary approach
and the environment
Our areas of work
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Economics and Trade Branch
Integrated examining environmental and related
economic and social impacts Proactive
emphasizing an ex-ante approach Global
perspectives engaging stakeholders from North
and South Participatory providing
opportunities for input and discussion at
national and international levels
Our approach
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Economics and Trade Branch
Enhancing Awareness through guides, briefings,
participation in international fora Partnerships
Consensus Building through UNEPs national
workshops and international conferences Policies
and Tools policy oriented research and
practical manuals for policy-makers Capacity
Building UNEP Country Projects
International Cooperation with WTO,
UNCTAD, other IGOs and NGOs
What we do
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Economics and Trade Branch
Guides and Manuals
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UNEP Reference Manual for Integrated Assessment
of Trade-Related Policies
International expert group established by UNEP in
1999 to provide technical input Designed to
assist policy-makers and practitioners in
assessing trade and trade-related policies
against sustainable development criteria Menu
of options for user to develop assessment
methodologies responding to countries needs
and priorities Field tested in Country Projects
and published June 2001
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UNEP Country Projects
on the Impacts of Trade Liberalization on the
Environment UNEP also supports Country Projects
on the Design and Implementation of Economic
Instruments
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UNEP Country Projects

• Involving governments, national institutions,
  NGOs, the private sector and community
  stakeholders building partnerships among them
• Building capacity through a participatory,
  learning by doing approach
• Catalyzing a national process of assessment
  and policy development that can be replicated
  to address future challenges

Approach
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UNEP Country Projects
A national team of experts supported by a
national institution (government or NGO)
ex-ante or ex-post
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UNEP Country Projects
Develop in-country methodologies for integrated
assessments of trade liberalization policies
suited to national situation and priorities
Carry out integrated assessments of trade
liberalization for a specific economic sector
Develop policy packages to mitigate trade
liberalizations negative environmental impacts
while enhancing its positive ones Support
developing countries in negotiating and
implementing multilateral trade and environment
agreements Build institutional and human
capacity so that the process can be replicated
in the future in various sectors
Objectives
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UNEP Country Projects
Focusing on a specific sector of national
importance, each project Performs an
environmental impact assessment, a resource
valuation analysis and, taking into account
developmental impacts (social and economic), and
completes a cost benefit analysis of trade
liberalization in the selected sector Designs a
corrective policy package that minimizes
negative, and maximizes positive, environmental
impacts identified in the project's environmental
impact assessment Consults national
stakeholders on all aspects of the project
through several national workshops Implements
the recommended policy package on a pilot basis
Activities
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UNEP Country Projects
For each Country Project, UNEP-ETB Reviews and
provides feedback on all activities Provides
technical support on all aspects of project
implementation through close/regular
communications with national teams Participates
in national workshops Coordinates external expert
reviews and organizes of expert workshops in
Geneva involving national teams Publishes,
disseminates and publicizes final
reports Assists national teams secure
government support for implementation of
recommended policy package
Assistance from UNEP
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UNEP Country Projects
Experience
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UNEP Country Projects
Sectoral Coverage
Argentina
Bangladesh
Senegal
China
Uganda
Ecuador
Nigeria
Tanzania
India
Indonesia
Chile
Lebanon
Romania
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UNEP Country Projects (Results)
India Manufacturing Assessment Foreign
investment liberalization has led to increased
automobile production with higher levels of urban
air pollution Policy Development Air pollution
can be substantially reduced through excise
taxes on new vehicles
Some Results
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UNEP Country Projects (Results)
Uganda Fisheries Assessment Resource depletion
and lakeside ecosystem degradation associated
with fish export growth Policy
Development Quota policies and enhanced
sanitation measures can increase sustainability
and enhance export revenues
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UNEP Country Projects (Results)
Romania Water Assessment International
competitiveness will not be negatively affected
by full-cost water pricing policies Policy
Development Positive prospects for gradual
implementation of full-cost water pricing
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UNEP Country Projects (Results)
Argentina Fisheries Assessment Policies
responsible for the over-fishing include
deregulation, price stabilization, free movement
of foreign capital, reduction of tariffs and
export taxes Policy Development Use of
individual tradable quotas Fines for exceeding
quotas Upgrading of monitoring control methods
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UNEP Country Projects (Results)
Ecuador Agriculture (bananas) Assessment Increa
sed market access Improved productivity due to
technologies imports Growth of banana plantation
(18) Decrease of bio-diversity, habitat,
quality of water and soil Policy
Development Greater use of environmental and
fair trade certification Reduced import tariffs
for ESTs used in production Incentives for
environmentally sound producers Assistance
programmes to help smaller producers meet
certification requirements
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UNEP Country Projects (Lessons learned)
Trade liberalization policies have both negative
and positive effects on the environment Some
studies indicate that the economic and social
effects of trade expansion are more significant
than the environmental ones Country-based
assessments are key in understanding the
interlinkages between different economic
sectors, different economic agents and the
environment
Lessons learned
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UNEP Country Projects (Lessons learned)
The most effective national responses involve a
policy package comprising a mix of
sector-specific policies, broader macroeconomic
policies, and environmental policies Integrated
economic policy can provide the greatest positive
effect to spur growth while simultaneously
addressing environmental and social problems
associated with economic development Commodity
price destabilization, skewed preferential
trade agreements, escalating and peak tarrifs,
and other international trade factors need to
be corrected
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UNEP-UNCTAD CBTF

• UNEP-UNCTAD
• Capacity Building Task Force
• on Environment, Trade and Development
• established in 2000 in consultation with
  governments
• operational in 2001
• 1st Round projects now underway in 8 countries

What is it
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Assisting Countries
UNEP-UNCTAD CBTF

• Assessment
• assess effects and maximize net welfare gains of
  trade and trade liberalization policies
• Policy Development
• design and implement mutually supportive trade
  and environmental protection policies which
  sustain livelihoods and reduce poverty

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Assisting Countries
UNEP-UNCTAD CBTF

• Market Access
• identify and comply with environmental and
  sanitary requirements in key export sectors
• ESTs
• access sources of foreign investment, including
  through mechanisms of MEAs, for the
  acquisition/development of ESTs
• EPPs
• identify and exploit trading opportunities
  for environmentally preferable products (EPPs)

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Beneficiaries
UNEP-UNCTAD CBTF

• Government officials including policy-makers and
  negotiators
• Private sector decision-makers and practitioners
  managing production of goods, commodities and
  services for export
• Academic and NGO experts with experience on
  sectoral issues

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Activities
UNEP-UNCTAD CBTF

• Training raises awareness understanding
• Thematic Research to identify innovative ways
  to meet challenges exploit opportunities
• Country Projects learning-by-doing policy
  analysis development
• Policy Dialogue to exchange of experiences
  creation of networks
• Information exchange online dissemination
  of results practical interactive resources

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Implementation has begun
UNEP-UNCTAD CBTF

• A call for proposals was issued in August 2000
• Over 50 requests for capacity building in the
  form of project proposals received from some 30
  countries
• Seven projects selected for first round
  implementation are now underway
• funding remains the only constraint to wider
  implementation

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Contact Information
UNEP Economics and Trade Branch 15 Chemin des
Anemones 1219 Geneva, Switzerland Tel [phone]
82 98/ 917 81 79 Fax [phone] E-mail
etu_at_unep.ch Website www.unep.ch/etu