Trade in environmentally sound technologies: implications for developing countries

Environmentally sound technologies (ESTs), often also referred to as “clean” technologies, are technologies that reduce environmental risk minimize pollution as well as energy and resource use and are essential in the fight against climate change. They also contribute to a number of Sustainable Development Goals (SDGs) such as goal 7 on energy, goal 8 on economic growth, goal 12 on sustainable consumption and production, and goal 13 climate actions. Trade liberalization can further facilitate market creation and expansion for ESTs and generate opportunities for companies, particularly in developing countries, to participate in regional and global value chains. Increasing trade in ESTs can offer a triple win by promoting economic development, industrialization, job creation and innovation while simultaneously enabling countries to more efficiently access the technologies needed to improve their environmental performance. Global trade in ESTs has increased by over 60% from USD 0.9 trillion in 2006 to USD 1.4 trillion in 2016, with renewable energy technologies accounting for more than one third of the total trade value, followed by wastewater management and water treatment and solid and hazardous waste management technologies. While emerging economics such as China have dramatically increased their share in world trade of ESTs, many low-income countries, especially least developed countries (LDCs), have not yet fully benefited from EST trade.