Can the south afford to go green?

How does trade impact on the environment? Why do many southern governments regard environmental protection as a low priority? Are they justified in thinking that pressures to clean up their environmental act are part of a deceitful northern trade protectionism agenda? Could the Kyoto Protocol’s Clean Development Mechanism (CDM) have benefits for the south?

A book from Pakistan’s Sustainable Development Policy Institute examines the conflicts, synergies and policy choices where trade and environment connect. It makes a powerful case that attending to the needs of the environment could be a win-win situation for the south. Evidence is presented that the costs of reducing the negative environmental impact are less than often feared. Benefits in terms of improved health, lower mortality, waste reduction, energy efficiency, protection of natural resources and – most importantly of all – access to international markets, could be substantial.

The book combines macro-level analysis and micro case studies and includes developing and developed country perspectives. Southern concerns in relation to trade liberalisation and the environment are presented together with strategies for cleaner production processes and establishing ISO 14000-compatible environmental standards. Proposals are made as to how the south ought to proceed in future trade negotiations.

Discussion includes a detailed analysis of cotton and leather – key Pakistani export commodities, the production and processing methods of which are of growing concern. It shows that:

• Integrated pest management, genetically engineered cotton, low external input sustainable agriculture and bio-dynamic alternatives to conventional cotton could promote a transition to sustainable development.
• This transition cannot be achieved by market incentives (since there is no technical and informational link between final consumer markets and farmers) nor on the niche market for organic cotton.
• The costs of reducing the environmental costs of leather tanning and cloth production are modest and affordable.
• Pakistan’s poor carry the burden of the damage caused by toxic chemicals used in the textile and leather industries.
• Manufacturers are currently unaware of international environmental standard-setting and how international competitors are positioning themselves in response.
• Developing countries can make progress towards cleaner production methods when there is will, a sufficient number of champions, transparency and broad stakeholder consultation.

How can the environment stop being a stick with which the South is beaten and become a valuable bargaining tool? Contributors argue that developing countries cannot ignore the accelerating process of multilateral rule-making on trade and multilateral environmental co-operation. The rules may be unfair and unbalanced but developing countries must get into the ring and do more to exploit the opportunities and reduce the threats in the trade-sustainable development relationship.

Governments need to:

• develop sustainable environmental standards through participatory consensus-building, institutionalisation of government-business-civil society debate, enforcement of regulations and provision of technical assistance
• eliminate subsidies which promote dirty and inefficient processes
• encourage donors to provide green credit lines (loans for adopting cleaner technologies) – as local financial institutions are unlikely to do so
• provide manufacturers with information on international developments and offer tax breaks for renewable energy technologies
• identify CDM opportunities to direct foreign investment to meet the high front-end capital costs of renewable energy projects
• realise that voluntary standards such as eco-labels and green demands from buyers are not eco-imperialist.

 

Source(s):
‘Trade and environment: difficulty policy choices at the interface’, Zed Books, Shahrukh Rafi Khan (ed.), 2002 Full document.

Funded by: International Development Research Centre (IDRC)

id21 Research Highlight: 16 April 2003

Further Information:
Shahrukh Rafi Khan
Economics Department
Kendall D. Garff Building
1645 E Campus Center Dr Rm 308
University of Utah
Salt Lake City
Utah 84112-9300, USA

Tel: +1 801 581 7481
Fax: +1 801 585 5649
Contact the contributor: shahrukh.khan@mill.econ.utah.edu

Economics Department, University of Utah, USA

Sustainable Development Policy Institute
UN Boulevard
Diplomatic Enclave 1
G-5, Islamabad
Pakistan

Tel: +92 51 227 8134
Fax: +92 51 227 8135
Contact the contributor: main@sdpi.org

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'Incentives for Conservation: Bringing People into the Process'

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