Discussion on Development v. Environment
It is widely believed that whenever development is on the agenda, the environment, natural resources, fauna, and flora are at the short end of the stick. However, any development without fulfilling the environmental aspirations is, in some sense, retarded progress. The interlinkages between economic growth and the environment are manifold, i.e., nature lends its resources for the betterment of the economy, and the economy shall in return, conserve nature for future generations. Despite this profound interconnection, it has been observed that economic growth has taken the pivotal attention of all the governments to the detriment of the environment.
During the 19th and 20th centuries, the western hemisphere saw rapid industrialization and technological advancements, which led to increased economic output and profits. At the same time, the environment degraded at a substantial rate, which was visible in incidents like the Great Smog of London as well as the death of rivers like the Thames. We may see in the graph below how carbon emissions after industrialization have grown, leading to more carbon dioxide in the atmosphere, which causes the rise in global temperatures (Green House Effect).
It is also understood that post-industrialization, the income of a large part of the population grew significantly, and hence their priority for quality of life grew. In which case, now we see that the developed countries or the countries in the western hemisphere are staunch advocates of environmentalism and sustainable development, while the developing countries have to balance their economic aspirations withenvironmental concerns.
Role of Developing Nations
The developing countries are currently at the receiving end of the effects of climate change and environmental degradation. With heatwaves and cyclones becoming common occurring, developing countries are more prone to devastation due to weather events than developed countries. And some of the responsibility also lies with them; with the world’s two biggest carbon emitters being the two largest developing countries, i.e., China and India. It also falls upon the developing counties to take stringent actions for the conservation of the environment with sustainable economic growth.
Looking at this goal, the ‘United Nations Conference on Environment and Development’ popularly known as the ‘Rio Declaration’ enshrined Principle 7, i.e., Common but Differentiated Responsibilities (‘CBDR’). According to this principle, all the nations have a common duty to secure the future of a clean environment, however, the responsibility of developed countries shall be significantly more than the developing countries because of their past conduct and the financial resources they command. In light of this development, the Paris accord signed in the year 2015 includes international commitments by developed countries to provide technologies and make investments in green energy and green economy of the developing world so that the developing countries are encouraged to move towards the goal of sustainable development.
The Indian Perspective
After China, India is the second-largest developing country in the world. It is the 6th largest economy in the world with the 2nd largest population of about 1.25 billion. However, India is also the third-largest emitter of greenhouse gases into the air, at 2.3 billion tons of carbon emissions annually. The reason for this is that India’s economy is one of the fastest growing in the world. But, by tradition, India has followed extensive sustainability as an approach to development.
Millions of Indians came out of poverty due to the utilization of conventional energy sources; the government has declared a target of 175 Gigawatts of renewable energy by 2022, and 500 Gigawatts of renewable energy shall be produced by 2030. It must be noted that there has been a 226% growth in installed capacity of renewable energy in the past five years in India. In doing this, it is one of the few countries around the world that are on track to meet its obligations under the Paris accord. Not just national initiatives, the Indian government has moved on to influence other developing countries in moving toward renewable energy by creating organizations like International Solar Alliance(‘ISA’). Multiple solar projects have been initiated under the ISA’s umbrella in the equatorial region of the world under the ideological guidance of the Indian government. Hence, it can be said that India is fulfilling its duty towards the world, as well as its people, by balancing development with the protection of the environment.
When discussed globally, the first names that come to one’s mind are the United Nations and World Trade Organisation. These organizations have persistently undertaken initiatives and show efforts towards sustainable trade and commerce while preserving the environment. To begin with, the Stockholm Declaration acted as a foundation for Environmental Diplomacy. In the year 1972, first time at a global level, during the United Nations Conference on the Environment in Stockholm, environmental issues gained primacy. The participants from across the world have endorsed the Stockholm Declaration and Action Plan for the Human Environment.
In the Stockholm Declaration, 26 principles were articulated that moved environmental issues into the spotlight and introduced a conversation between developed and developing countries with reference to the relationship between economic growth, air pollution, water pollution, ocean pollution, and human well-being globally. To summarize the Action Plan, it consists of 3 sections viz. Environmental management activities, Global Environmental Assessment Programme (watch plan), and international measures to aid national & international assessments and management operations. These categories were further divided into 109 recommendations.
Among the most important accomplishments of the Stockholm Conference was the UN Environment Programme (UNEP). United Nations Environment Programme has turned its focus towards a Green Economy. Under this type of economy, the green trade policies are formulated while considering the repercussions of those policies on the environment. Global Trade can perform a major role. Global trade is currently acting as an amplifier to the triple planetary problems of climatic instability, environmental degradation, and growing pollution. Trade, on the other hand, can contribute to long-term growth if trade policies are linked with environmental and social goals. The transition to more sustainable production and consumption patterns opens up new markets for environmental goods, services, and technologies, all of which are required to satisfy the Paris Agreement and the 2030 Agenda. Many countries, however, lack the ability to use trade as a tool for attaining long-term development.
The UNEP has also come up with a Trade Hub. The Hub is the vehicle through which UNEP’s trade work is delivered. The goal is to engage in green commerce at the global, national, and private sector levels. To accomplish this, the Hub focuses on improving the design and sustainability standards of critical value chains, as well as facilitating market access for sustainable products in order to green global production and consumption. The Hub also focuses on cross-cutting issues such as trade and export finance, as well as providing advice to member nations.
Additionally, the UN Environment Programme’s World Conservation Monitoring Centre (UNEP-WCMC) collaborates with scientists and policymakers around the world to put biodiversity at the center of environmental and development decisions, allowing people and the planet to make informed decisions.
Moving on, another UN Initiative is the Regional Enforcement Network for Chemicals and Waste (REN). REN is a program that intends to improve the capacity of 25 Asian Pacific countries to control illegal chemical and waste trade to combat environmental crime. Its legal status is derived from the Montreal Protocol, the Basel Convention, the Rotterdam Convention, and the Stockholm Convention. This is in addition to national laws and regulations associated with the Multilateral Environmental Agreements (MEAs).
By coordinating efforts, pooling resources, and ensuring that policies are consistent, coordinated, and collaborative among UN agencies, the United Nations Forum on Sustainability Standards (UNFSS) reinforces the importance of voluntary sustainability standards for sustainable development. To learn more about Voluntary Sustainability Standards and influence decision-makers at the international level, UNFSS enables contact between producers, traders, consumers, standard-setters, certifying bodies, trade diplomats, non-governmental organizations, and researchers.
Finally, the United Nations Conference on Trade and Development has shown involvement in various sustainable development methodologies, such as the Bio-trade initiative, by being action-oriented to curb climate change, among many more.
Role of SDGs
Sustainable Development Goal 15, which provides ‘Life on Land’, consists of 9 targets and 3 points for implementation, explicitly dealing with the terrestrial environment and natural resources. While the targets do not mention the term ‘trade’, the points on implementation do refer to ‘trade’ as a means for sustainable development. It is mentioned that through trade, financial resources could be raised, which may contribute to the encouragement of local communities to pursue sustainable livelihoods. Earlier, trade was considered intrinsically opposed to sustainable development, however, SDG 15 provides that trade is an important means to achieve sustainable growth.
It must be noted that the SDGs specifically refer to the conservation of natural resources, flora, and fauna of the environment. It is here that we see that trade has been used to make sure such conservation efforts work on the ground. We may look at the case of environmentally sensitive products involving wildlife, whose vulnerability and extinction from their natural habitat were blamed on illegal trade and poaching. However, it was through trade policy mechanisms such as quotas and import bans that the trade of animal flesh and other sensitive objects came to a halt helping in the conservation of thewildlife population.
Similarly in the year 1992, the Earth Summit was organized in the Brazilian city of Rio de Janeiro, wherein Agenda 21 was incorporated into the Rio Summit, which included principles of sustainable consumption and sustainable production.
The Principle of Sustainable Consumption or Use has been enforced through the Convention on International Trade in Endangered Species of Fauna and Flora (‘CITES’). The Convention mandates the signatories to initialize the system of internationally recognized permits and certificates for the trade of goods related to protected biodiversity. It also requires member states to form management authorities that cooperate to match import with export permits. Thus, it brought a system in place to manage the sustainable use of articles originating from endangered fauna or flora, which is prominently tradedin the global market.
The Principle of Sustainable Production was enforced through the system of Voluntary Sustainability Standards (VSS) and certification procedures for production processes. After the Rio summit, VSS compliant supplies became a market phenomenon and thus were popularized as a standard of quality products. It was also observed that VSS compliant products like Palm Oil, Coffee Beans, and Soy Beans outpace the market growth of conventional goods. Hence, it was observed that there is a market appetite for sustainably produced goods, and encouragement of sustainable trade will very well help in the fulfillment of this Sustainable Development Goal.
Since the Uruguay Round (1986–1994) of talks, intersection of environmental and trade issues came to light in the international forum. The WTO since then has been taking multiple steps to promote trade and regulations which are sustainable and environment-friendly. Some of the initiatives taken up by the WTO in this regard are as follows:
1. Work on Greening the Multilateral Trade Agenda
The WTO has been working towards enhancing green trade and promoting carbon-neutral trade of conventional goods by encouraging the implementation of stringent environmental standards and laws at the national level and by reducing tariffs and duties on such goods which are beneficial to the environment. The Committee on Environment and Trade keeps on recommending new rules and regulations under the existing trade agreements to comply with the demands of the changing climate or environment. An example of greening the Multilateral Trade and efforts taken up by the WTO in this regard is the Doha Development Agenda, under which the CTE is looking at the effects of environmental measures on market access, the intellectual property agreement, and biodiversity, as well as labelling for environmental purposes to propose measures and provisions that could be incorporated into existingmultilateral trade agreements.
2. Environmental Goods Agreement
In 2016, the United National Framework Convention on Climate Change, popularly known as the Paris Agreement was signed with the purpose of combating climate change around the world. The backbone of this agreement was national commitments toward decreasing carbon emissions and revolutionizing their industries to become carbon neutral. Similarly, the agreement was adopted by the United Nations member states in 2015, whose goal is the eradication of poverty while conserving the natural environment for future generations. To bring synergies between these two commitments, since 2014, eighteen participants representing 46 countries are negotiating theEnvironmental Goods Agreement (‘EGA’), under the auspice of the World Trade Organization. This agreement seeks to apply the principle of ‘Most Favored Nation’.
The goal of the EGA is to finalize efforts for the joint reduction of tariffs on goods that are environmentally beneficial. While the definition of such goods still needs to be decided, however, as per the Paris Agreement, commitments of decarbonization were made on the back of shifting to renewable energy. Yet, there are multiple import duties levied on technologies essential to renewable energy; the EGA is aimed at reducing such duties that may discourage international trade of goods which shall be beneficial to the environment.
3. Committee on Trade and Environment in Action
At the WTO Ministerial Conference of 1994, the Committee on Trade and Environment was established to develop trade policy and international rules governing areas at the intersection of trade and environment. Climate change is indirectly related to several issues, such as removing trade barriers in the energy and forestry sectors and implementing energy efficiency labeling, which has a direct effect on market access.
The CTE initiated its work program with a ten-point plan which includes items like ‘Trade Rules, environmental agreements, and disputes’, under which work on agreements like the EGA takes place; and ‘Transparency of environmental trade measures’ under which a database has been formulated to compile and update annually all environmental measures notified by governments to the WTO or noted in trade policy reviews, and other eight points, on which the CTE has been working since the Doha Ministerial Conference in fulfillment of its goal of smoothening theglobal green trade.
India has been a signatory to various UN initiatives like the UNCATD, REN, among many more. For instance, India has participated in the National Capacity Building Workshop for the right implementation of REN. The UN Environment’s Regional Enforcement Network for Chemicals and Waste (REN) organizes courses to help national customs officers better manage the illegal chemical and waste trade. Customs officers in India, for example, were instructed on the Basel, Stockholm, and Rotterdam conventions, as well as other MEAs dealing with the illegal trade in chemicals, ozone-depleting substances, and trash, and how to implement and comply with them. Once a Chinese import restriction on some types of garbage takes effect, India is being considered a potential new garbage destination.
Additionally, India has also come up with its own regional policies, such as the Polluters Pay Principle, Green Tax and so on that have aided the private sector to concentrate on sustainable development.The Niti Aayog has resolved to achieve the SDGs by 2030.
The integration of trade and environmental policy is part of the bilateral, regional and multilateral framework. Nevertheless, multilateralism faces the challenge of balancing trade vis-à-vis the environment to provide‘win-win solutions’, especially in the background of sustainable development.
The Partnership for Action on Green Economy (PAGE) brings together five UN agencies – the International Labour Organization, United Nations Environment Programme, the United Nations Development Programme, the United Nations Institute for Training and Research, and the United Nations Industrial Development Organization – to give countries with integrated and holistic support for creating an inclusive green economy while maintaining coherence and minimizing duplication.
PAGE is a platform that UN Environment and its partners use to coordinate actions at the national, regional, and global levels. Country-level activities include advisory programs in China, Mongolia, South Africa, Peru, Ghana, and Burkina Faso. Global programs include e-learning courses and materials on trade and green industrial strategy.
Sustainability certification, according to the project, increased market access and sales for natural biodiversity-based products in a few countries, including Peru. Peruvian bio trade exports surged from US$ 7.6 million to US$ 58.8 million between 2009 and 2014, demonstrating the potential for green markets to improve economic and social circumstances in Peru’s underdeveloped regions. In a study conducted inVietnam, it was discovered that shrimp sustainability certification increased a farmer’s profit margin by up to 15% due to increased export opportunities. These examples demonstrate how green trade may benefit poor countries in a variety of ways.
Along with Peru and Vietnam, UN Environment worked with Ghana’s Energy Centre to assess the technical and financial sustainability of solar energy exports, as well as the social and environmental repercussions. The Ghana Solar Export PotentialStudy that emerged highlighted Ghana’s massive solar-powered electricity potential, as well as opportunities for electricity trade in the region. A grid-connected 100 MW solar project in Ghana could generate annual energy exports worth US$ 38 million, cut CO2 emissions by 40,000 tonnes per year, provide 3,000 jobs, and provide livelihoods for 23,000 of Ghana’s poorest people, according to aresearch.
On this foundation, the Environment and Trade Hub aided in the formulation of a plan for selecting a solar-ready, cross-border grid connection between Ghana and Burkina Faso, as well as an in-depth examination of technical and financial installation needs. Expanding Ghana’s use of solar energy could have many social, economic, and environmental benefits, as well as improve the country’s resistance to climate change.
The Regional Trade Agreements, on the other hand, are sometimes referred to as a “laboratory,” allowing countries to experiment with new laws and solve new challenges. Environmental provisions in RTAs are evolving and becoming more precise and realistic, as evidenced by environmental provisions in so-called “mega-regional” trade agreements like the Comprehensive Progressive Agreement for Trans-Pacific Partnership, which was signed by Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. Incorporating environmental and sustainable development factors into RTAs is one way of improving policy coherence and ensuring that environmental considerations are included in trade policy. UN Environment has developed a Sustainability Toolkit for Trade Negotiators in collaboration with the International Institute for Sustainable Development to assist negotiators in drafting, negotiating, and implementing environmental provisions in RTAs. The toolbox contains over 200 text examples of environmental criteria from over 90 RTAs.
Without a doubt, sustainable development is one of humanity’s most challenging issues. Achieving sustainability’s goals and objectives is a massive undertaking for the local, national, and international levels. Environmental degradation and significant changes in the natural environment can be seen all over the world, and they are among the issues that must be addressed to achieve sustainable development. All of these things are visible in many parts of the world, and they limit our ability to control and adjust the underlying connections that keep the ecosystem of our planet running.
Concluding Remarks: The Way Forward
Never for once shunning the need of nations of wanting a balance between trade and environment, the WTO has contributed in promoting economic growth through the liberalization of trade in goods and services, as well as by creating stable and foreseeable conditions that encourage innovation.
1. Alternative means and institutions for encouraging balanced regulations related to the environment in reference to trade need to be devised.
2. Manifesting global tie-ups with nations and agencies dedicated to science, welfare, and the environment for data and policy suggestions.
3. Focus on investments specific to climate, aimed at achieving a balance oftrade-environment.
The end analysis can, however, be seen as aimed towards one goal, i.e., to strengthen cooperation and coordination when it comes to the environment. Fulfilling the Marrakesh objective, the effectiveness of the dispute settlement system not only ensures the protection of the environment but also secures the development of trade, international trade law, and compliance with rule of law at a global level.
About the Authors
Dr. Ankit Awasthi is an Assistant Professor at Hidayatullah National Law University (HNLU), Raipur.
Ms. Charvi Devprakash is a 3rd Year Law Student, PES University, Bengaluru. She is also an Associate Editor at IJPIEL.
Managing Editor: Naman Anand
Editor’s-in-Chief: Jhalak Srivastav and Muskaan Singh
Senior Editor: Hamna Viriyam
Associate Editor: Charvi Devparkash
Junior Editor: Vedant Bisht
Preferred Method of Citation
Ankit Awasthi and Charvi Devprakash, “The Conundrum of Trade and Environment- Through the lens of International Conventions” (IJPIEL, 20 May 2022)