Access to technology and know-how will play an important role in helping developing countries realize meaningful sustainable development benefits through trade and investment in EGS. However, ongoing negotiations on EGS have not yet addressed the issue of technology transfer in a meaningful way. On the one hand, it is assumed by a number of countries that environmental technologies will be diffused automatically once barriers to EGS are lowered, but on the other, many trade negotiators as well as experts do not see such an automatic link. They would prefer positive measures within the context of EGS and other WTO negotiations that would enable developing countries to meaningfully access and operate these technologies and eventually to build a domestic technological base and know-how as a stepping-stone to further innovation.

While transfer of technology is not explicitly mentioned in the EGS mandate in Paragraph 31 (iii) of the Doha Declaration, some trade negotiators feel that the issue should be addressed more meaningfully so that EGS negotiations deliver on sustainable development and not just on market access. However, there is some scepticism expressed on the extent to which the WTO can contribute to the process. So far, divergent opinions and priorities have held back constructive engagement on the issue not only in EGS negotiations, but also in the Working Group on Trade and Transfer of Technology within the WTO.

The paper by Lynn Mytelka argues, on the basis of empirical evidence and the conceptual evolution over the years of what constitutes technology transfer, that much can be done within EGS and other areas of WTO negotiations. This would, however, imply rethinking the mandate of EGS negotiations and steering the focus away from simply increasing market access for EGS to one that recognises and facilitates the importance of knowledge transfers including “tacit” knowledge embodied in services.
Professor Mytelka clearly illustrates, through various examples and case studies, the impediments countries face in obtaining meaningful access to environmentally sound technologies (ESTs). The author questions whether it is feasible to expect the Doha WTO negotiating process to deliver more on the technology transfer front than has so far been achieved. The paper concludes that there are still other aspects of the mandate and the process of negotiating trade that could be rethought from a broader technology transfer and sustainable development perspective. These involve recognising the “public goods” element inherent in many ESTs and to open up opportunities for learning and capacity building and enhanced response capabilities in developing countries through flexibility, special and differential treatment and technical assistance. The paper calls for the identification of areas where such opportunities could be pursued, not only in EGS negotiations, but also in other areas of discussions such as subsidies, agriculture and Trade-Related Aspects of Intellectual Property Rights. In addition, the paper advocates positive measures that go beyond the negotiating framework, including the creation of a Knowledge Fund to bring benefits of learning and innovation in technologies that respond to the critical needs of developing countries including the environment.

Dr. Lynn Krieger Mytelka is a Distinguished Research Professor at Carleton University, Ottawa, Canada, and former Director of the United Nations Institute for New Technologies (UNU-INTECH) (2000-2004), now part of UNU-MERIT where she is currently a Professorial Fellow and holds an Honorary Professorship in Development Economics at the University of Maastricht. Prior to that, she served as Director of the United Nations Conference on Trade and Development’s Division on Investment, Technology and Enterprise Development (UNCTAD DITE) (1996-2000). Professor Mytelka has published extensively in the area of innovation, technological change and sustainable development and is a member of the International Livestock Research Institute’s (ILRI) Science Advisory Panel and the International Confederation of Science Union’s (ICSU) Committee on Scientific Planning and Review (CSPR)

The paper is part of a series of issue papers commissioned in the context of ICTSD’s Environmental Goods and Services Project, to address a range of cross-cutting, country-specific and regional issues of relevance to the current EGS negotiations. The project aims to enhance developing countries’ capacity to understand trade and sustainable development issue linkages with respect to EGS and reflect regional perspectives and priorities in regional and multilateral trade negotiations. We hope
you will find this paper to be stimulating and informative reading and useful for your work.

The global economy is dependent upon oil and other fossil fuels, and this dependency (of producers and consumers alike) is fed through international trade. Weaning ourselves off carbon without causing economic dislocation poses a tremendous challenge. Governments must move quickly to make a rapid transition in the sources of energy on which we rely, whilst balancing social, economic, and environmental concerns.

Reversing global warming requires citizen action and corporate responsibility, public and private investment, and the implementation of effective regulatory regimes. Part of the good news is that, while in the past, the economy vs. environment debate has hampered progress on the environment, many policy-makers now realise that a concerted effort to ensure that economic activity is sustainable is the most cost-effective strategy. A consensus is emerging that technology innovation and transfer can play a major role in protecting the environment while fostering economic development, but achieving the right balance between private and public action is daunting.

Trade liberalisation and the mitigation of and adaptation to climate change are currently managed under separate and complex legal regimes. The integration of these regimes is essential to ensure that domestic and international measures to address climate change and the international trade system are mutually supportive. Infusing climate-friendly measures – including incentives such as climate standards, strategically targeted subsidies and liberalisation in environmental goods and services – within the various trade regimes could make a major contribution toward a sustainable energy transition, and climate change mitigation and adaptation.

This special collection of issue briefs begins with an introduction that summarises ICTSD’s analysis of the key links between three broad areas that are too frequently addressed in isolation from each other: trade, climate change and energy. The second section explains more specifically some of the most important issues facing policy-makers concerned with international policy on energy and trade, including the specific circumstances in Asia and especially China. The final section focuses on bioenergy, looking both at the global picture and at experiences in Africa, Asia and Brazil.

The collection features a contribution by Ted Turner, a leader in the growing movement in support of clean energy and the chairman of the United Nations Foundation. We are also pleased to present other authors from a range of perspectives. Focusing on the potential of biofuels to simultaneously provide economic opportunity and reverse global warming, such new voices set the stage for the issues explored here.

All contributions represent the views of the authors, and do not necessarily reflect the official positions of the organisations with which they are affiliated.

Erwin Rose and Moustapha Kamal Gueye produced and edited this publication. Mr. Rose has served as a senior trade and environment negotiator for the United States. Dr. Gueye leads ICTSD’s environment programme.

This collection builds upon work that ICTSD has initiated on the links between trade, climate change and energy. It inaugurates a new series on Trade and Sustainable Energy that will include publications that address a range of cross-cutting, regional and country-specific topics. We hope you will find these papers to be stimulating, informative and useful. We welcome your comments.

On the other hand, the negative impacts of liberalisation on vulnerable industries in developing countries, in particular fledgling small and medium-sized enterprises, and sections of populations without the purchasing power to access privately-delivered EGS, such as sanitation, has often been cited. Environmental goods such as pollution prevention and end-of-pipe equipment and technologies are essentially produced and exported by developed countries. As a result, many developing country policy makers argue that these negotiations would primarily benefit the economies of developed countries which are looking for new markets and might generate important tariff revenue losses for some developing countries. Furthermore, in order to generate durable benefits they argue that there is a need to ensure that the trade in EGS goes hand in hand with the transfer of technologies, but negotiations to date have failed to take into account the relationship between the environmental goods mandate and incentives for technology transfer. This has led to calls among some stakeholders that liberalisation should be gradual or carefully qualified and in certain cases that countries should be able to stop or roll back liberalisation that may have these negative impacts.

This uncertainty regarding the sustainable development impacts of EGS liberalisation is partly responsible for the fact that developing countries have been slow in articulating their positions in the WTO Committee on Trade and Environment (CTE). To add to the confusion, the definition of goods and services deemed ‘environmental’ remains a highly controversial issue, which still awaits resolution at the WTO. What makes a good environmentally friendly? Is it the way it was made, the characteristics of the final product or what the product can do or all of these? How to deal with cases of dual use, namely products that can be used both for environmental and non-environmental purposes? Members have been trying a variety of approaches such as proposing specific lists of goods or even seeking to identify goods and services that are inputs into specific environmental projects. A number of goods proposed are based on lists developed by the Organization of Economic Co-operation and Development (OECD) and the Asia Pacific Economic Co-operation Mechanism (APEC) which heavily focused on capital, technology and knowledge-intensive goods exported primarily by developed countries. Others go beyond this categorisation to include environmentally preferable goods that many developing countries have a comparative advantage in producing.

As a contribution to the debate this paper examines and builds on the different approaches that have emerged in the negotiations as well as existing and expected trends in international trade in environmental goods. The authors propose ways to overcome disagreements in the negotiations and agree on liberalisation of environmental goods that can provide win-win outcomes for the environment and development for all WTO Members. Robert Howse is Professor of Law at the University of Michigan and has published extensively on key legal issues in international trade law, public health and the environment. Petrus van Bork is a consultant specialising in information technology, standards and innovation policy matters. The study is part of a series of issue papers that address a range of cross-cutting, country specific and regional issues of relevance to the current EGS negotiations, commissioned in the context of ICTSD’s Environmental Goods and Services Project. The project aims to enhance developing countries’ capacity to understand trade and sustainable development issue linkages with respect to EGS and reflect regional perspectives and priorities in regional and multilateral trade negotiations.

We hope you will find this paper to be stimulating and informative reading and useful for your work.