By now, we are well aware of the negative effects of climate change and pollution on the planet. Simultaneously, the world is experiencing a devastating economic crisis with sky-high gas prices. In envisioning solutions for these different crises, the linkages between them cannot be ignored, especially since it has been shown that unrestricted economic activity and industrialisation have severely injured the environment. Bearing this in mind, it is clear that solutions to either cannot and should not undermine each other otherwise you pay the ever-rising costs of inaction. It is at this point that I would like to introduce the idea of the Regional Liberalization of Environmental Goods and Services (EGS) Market and the immediate solutions it can present if pursued vigorously.
Firstly, what are EGS? The OECD defines these as: “activities which produce goods and services to measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well as problems related to waste, noise and eco-systems. This includes cleaner technologies, products and services that reduce environmental risk and minimise pollution and resource use.”
As seen above, this is a large and growing sector and it is largely untapped! Yet due to the sensitive nature of EGS, a hands-off approach has been generally adopted at the multilateral level with very minimal commitments made for further liberalization. With the Doha Round stalled, it may be time for the Caribbean to look amongst ourselves for solutions.
Why does the regional liberalization of EGS make sense for the Caribbean? For several reasons! Starting with the obvious:
- Environment: As economies that are largely dependent on the healthiness of the environment for the survival of key sectors (i.e. agriculture and tourism) it is important to maintain our eco-systems. An added consideration is the fact that the Caribbean is largely environmentally vulnerable so these ecosystems act as buffers against harsh conditions preventing soil/coastal erosion and maintaining bio-diversity.
- Tourism: The preservation of the ‘sun, sea and sand’ product is of paramount importance to this industry if it is to be sustainable and viable. An added consideration is the growth of the “green” economy which takes into account a growing portion of eco-conscious consumers which are mindful of labels and certification which offer a guarantee of being eco-friendly. Again, the mainstreaming of environmental goals makes sense, and eco-friendly certification in Barbados is already a growing trend. It serves to benefit the hotel by reducing energy and water costs while simultaneously being more ecologically responsible.
- Energy: Heat and energy management products are among those that could have the greatest impact on the Caribbean’s productive capacity. (See: wind, solar and geo-thermal energy sources). Renewable energy products and energy efficient products act as economic goods as they also decrease dependency on fossil fuels and increase their competitive edge by lowering production costs. Bearing in mind the vulnerability of SIDS to external shocks and fluctuations in oil prices and the compound effects on transportation, distribution and manufacturing of products, it is important that CARICOM gain greater control of their imported fossil fuel consumption. A change in the source of energy could quicken the mainstreaming process throughout the economy to further integrate environmental goods as it affects all productive sectors. Government incentives are an absolute must to encourage the use and incorporation of these energy devices, and investment in the development.
It is evident that the regional liberalization of EGS presents an opportunity to revitalise ailing sectors and greatly improve the productiveness of current sectors. Added to this, it offers the prospect of an entirely new sector for economic development thus adding further diversity to the export and trade portfolio of the Caribbean. The first steps to making this a reality could be the development of policies which will incentivise increased use and to target University programmes to encourage R&D in the sector.
