27 March 2019: Increasing trade in environmentally sound technologies (ESTs) can promote economic development, job creation and innovation, while fostering economic and climate resilience, according to a report published by the UN Environment Programme (UNEP).

The report titled, ‘Trade in Environmentally Sound Technologies: Perspectives from Developing Countries,’ highlights the importance of developing country involvement in future trade in ESTs, which contribute to environmental protection and climate change mitigation. The report seeks to increase the understanding of the implications, capacity needs and enabling conditions for liberalization of trade in ESTs, particularly in developing countries. It focuses primarily on five ESTs: solar photovoltaic cells (PVs); water filters; waste incinerators; gas filtering machinery; and hemp and flax fibers.

According to the report, the value of trade in clean technology-related services has increased more than five-fold over the past decade, with global trade in clean technologies increasing by 60% from 2006 to 2016. Renewable energy technologies account for more than one-third of the total trade value, followed by wastewater management and water treatment, and solid and hazardous waste management technologies.

Global trade in clean technologies increased by 60% from 2006 to 2016.

The report argues for tackling barriers to trade in ESTs in a holistic manner to help developing countries harness clean technology trade opportunities. It identifies emerging economies, such as China, which have transitioned from net importers to net exporters of ESTs by embracing international trade and investment to build technology and production capacity. However, the publication notes, low-income countries, particularly least developed countries (LDCs), have not yet benefited much from EST trade.

The report highlights knowledge and capacity building as crucial to help developing countries assess opportunities and challenges related to trade in ESTs and to inform decision makers regarding benefits of participating in trade negotiations. It calls for reducing or eliminating tariff and non-tariff barriers to ensure greater developing country participation in regional and global value chains.

Investment in trade, the report notes, innovation and EST use can also drive sustainable development by helping to achieve the SDGs. The report elaborates on the contribution of ESTs to the SDGs, including to:

• SDG 2 (zero hunger) through technology development in agriculture;
• SDG 3 (good health and well-being) through research and development in vaccines;
• SDG 7 (affordable and clean energy) by contributing to access to clean energy research and technology and upgrading technology for supplying energy services;
• SDG 8 (decent work and economic growth) through job creation in the EST sector;
• SDG 9 (industry, innovation and infrastructure) by supporting domestic technology development;
• SDG 12 (responsible consumption and production) by removing market distortions, such as harmful subsidies, and by strengthening technological capacity towards sustainable consumption and production (SCP);
• SDG 13 (climate action) by helping to achieve climate goals; and
• SDG 17 (partnerships for the Goals) by, inter alia, promoting equitable multilateral trading systems and through international cooperation on access to science, technology and innovation.

Regarding next steps, the report emphasizes: further exploring technology trade and transfer, including foreign direct investment and licensing; and promotion of capacity building, policy dialogue, and collaboration and exchange across disciplines, sectors and borders, among other actions.

The report was published by UNEP’s Environment and Trade Hub, Oxford University’s Technology and Management Centre for Development and the Department of Industrial Economics and Technology Management at the Norwegian University of Science and Technology. The project was supported by the European Commission through the Global Public Goods and Challenges Programme. [Publication: Trade in Environmentally Sound Technologies: Implications for Developing Countries] [UNEP Press Release]