International Trade in Services.pdf - DSpace at Khazar University

320 International Trade in Services
Box 10.1: What Do Environmental Services Cover
The businesses that make up the environmental industry offer products and services that
help measure, prevent, limit, or correct environmental problems. The producers of environmental
goods and equipment, as well as water supply companies, environmental
consultancy services, and developers of clean technology, are all part of the environmental
sector. Environmental services are thus one segment of the environmental industry.
The classification of environmental services has been the object of intense debate in
developing and developed countries. At this stage, there is no agreement on a common
classification. Several classification lists have been used in service negotiations.
The World Trade Organization classification, which is largely based on the United
Nations Provisional Central Product Classification (UN 1991), categorizes environmental
services into (1) sewerage services, (2) refuse disposal services, (3) sanitation and
similar services, and (4) other (cleaning services for exhaust gases, noise abatement
services, nature and landscape protection services, and other environmental services
not elsewhere classified). There is recognition that the World Trade Organization classification
reflects a rather traditional view of the industry. Given the new regulatory
requirements related to the emergence of the private sector in environmental initiatives,
the growing public awareness of and sensitivity about environmental problems,
and the shift in environmental regulatory approaches from end-of-pipe pollution control
to pollution prevention, as well as intersectoral problems (many environmental
services fall within the scope of other sectors such as business, construction, education,
tourism), alternative frameworks for classifying environmental services have been
developed in regional, intergovernmental, and international forums such as Eurostat,
the Organisation for Economic Co-operation and Development, and the United
Nations Conference on Trade and Development (UNCTAD).
The Organisation for Economic Co-operation and Development–Eurostat classification
list includes the following broad groups of services: (1) pollution management,
(2) cleaner technologies and products, and (3) resource management.
UNCTAD classifies environmental services into four segments: (1) environmental
infrastructure services (for example, water and waste management), (2) noninfrastructure
and commercial environmental services (for example, site clean-up and
remediation, the cleaning of exhaust gases, noise abatement, and nature and landscape
protection), (3) remediation services with environmental end use (for example,
construction or engineering services), and (4) support services.
Commercial classifications categorize environmental services on the basis of market
structure and behavior, technological development, and regulatory frameworks that
distinguish among the following services categories: (1) infrastructural goods and services,
including household, industrial, and hazardous solid waste disposal, potable water,
sewerage system management, and recycling, and (2) pollution management, which
comprises air and water pollution treatment and control, noise abatement, soil and water
remediation, consulting, engineering, instruments and information systems, testing and
analysis, and industrial processes and product designs to prevent pollution.
In the classification debate, one relevant issue involves ensuring that the classification
adopted reflects the actual structure and state of the environmental industry.
Generally, the division among infrastructural, commercial, and supporting environmental
services can be useful for this purpose.
In addition, the distinction between environmental goods and environmental services
continues to be a matter of disagreement in international trade talks. Environmental
services are often supplied through goods, and the separation of goods and services in
an environmental activity is difficult because of this integrated nature. Despite the disconnect
in environmental goods and service negotiations, the reform of environmental
services should be undertaken in coordination with environmental goods reform and
liberalization.
Sources: Claro et al. (2007), Geloso Grosso (2004).