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Understanding Trade in Environmental Services: Key Issues and Prospects 321
British investors in Peru’s waste treatment facilities in Lima are leveraging carbon
bond technology in Peruvian landfills (Business News Americas 2008a). There
would be additional external benefits in terms of improvement in environmental
quality, more cost effective and environmentally sound approaches to resource
use in a number of industrial activities that can reduce costs and prices in associated
commodity markets, and greater resource efficiency for the economy
generally. In addition to the effect on economic prosperity, widespread access to
environmental services has a strong impact on human health and well-being,
especially in low-income countries that lack basic environmental services such as
access to clean water, sewerage systems, and garbage disposal.
Furthermore, the growth of the environmental service sector and the trade in
environmental services can generate employment opportunities for unskilled
and skilled labor in developing countries. For example, the South African firm
EnviroServ, which provides services in integrated waste reduction, management,
reuse, treatment, and disposal in Mozambique, Namibia, and South Africa and
which has over 1,000 permanent employees in sanitation, technical, and supervisory
positions, has set aside funds for skills development. 1
Given that environmental services are typically provided in conjunction with
other products or services, the expansion of the environmental service sector
would generate demand in other sectors, including engineering, design, construction,
research and development, training, and consulting. Environmental services
are vital for sustaining revenue from the tourism sector, which is a primary service
export in many developing countries. In 2007, travel receipts in developing countries
reached US$285 billion, around 33 percent of the total exports in commercial
services of these countries (WTO 2008). The least developed countries have
experienced a 13 percent annual growth rate in tourism since 2000 (WTO 2008).
A robust environmental service industry would assist developing countries in
managing the environmental impact of the tourism industry. For example, the
tourism industry in Cancun, Mexico, generates substantial waste; yet, “treatment
plants do not clean sewage enough to make it safe for coral,” one of the main
attractions for visiting tourists (Lange 2008).
Importing environmental services enhances domestic capacity, which can, in
turn, lead to the development of export capacity and broader economic benefits.
On the export side, several developing countries are already benefiting from
export opportunities in environmental services, particularly via Mode 4. Cuba,
for instance, has developed a comparative advantage in environmental studies,
assessments, and consultancy services and has exported such services to Brazil,
the Dominican Republic, Haiti, Mexico, Nicaragua, Spain, and República
Bolivariana de Venezuela. The provision of consultancy services through Mode 1
could also provide opportunities for developing countries to export environmental
services.