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Understanding Trade in Environmental Services: Key Issues and Prospects 335
national or international And which are the appropriate instruments to implement
such standards
Harmonized international environmental management standards, such as those
maintained by the International Organization for Standardization, can increase the
trade opportunities in environmental services. Industries use environmental services
to meet these standards, which are required by many buyers abroad. For example,
Tunisie Lait, based in Sousse, Tunisia, implements International Organization
for Standardization 14001 standards in managing the impact of its production
facilities on the environment (ISI Emerging Markets 2008b). Furthermore, firms
adhere to such standards to meet licensing requirements in export markets of
interest. For example, the waste management company Sancon Resources Recovery
adheres to International Organization for Standardization 14001 standards and
offers services in Australia and China (AllBusiness 2008). Policy makers can promote
standards and facilitate private sector engagement through the International
Organization for Standardization. They can ensure financing initiatives for small
and medium-size enterprises that include environmental service firms.
In contrast, in environmental infrastructure services, several examples demonstrate
that, particularly in developing countries, national standards with high
domestic relevance have the potential to ensure that important access and safety
goals are ensured. In Bolivia, flexible national standards that provide jointly
owned connections to water and wastewater services at lower cost using smaller
pipes in underground trenches under patios and pavements (instead of the prevalent
custom connections inside homes) have enabled the expansion of water
services at an affordable price to the poorest part of El Alto and La Paz. The
technology has been approved by the Bolivia Institute for Norms and Technical
Standards. Developing countries are encouraged to introduce such flexible local
regulations that encourage operators to meet service standards and ensure that
important goals set by authorities are not compromised (Geloso Grosso 2007).
In terms of instruments, the implementation of environmental regulation and
legislation is the main driver in environmental service markets and trade. At the
national level, laws and regulations are the primary drivers for key environmental
service industries. The establishment of regulatory authorities, the promulgation
of legislation, and enforcement actions influence the development of environmental
services. Policy makers can recognize the economic and environmental
value of supporting environmental institutions that promulgate and enforce regulations.
However, environmental improvement and development can be
achieved in a more efficient way through economic instruments—such as environmental
charges and taxes, tradable permits, emission fees and tradable emission
allowances, and environmental subsidies—because these provide incentives
for companies to meet environmental targets.