The role of an environmental goods agreement in the quest to improve the regime complex for climate change

Abstract

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 eliminate tariffs on EGs. This also failed. This paper discusses the hurdles faced by these negotiations, the resulting stalemate and avenues for reviving the negotiations. We argue 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.