Thank you, Chair.
As a co-sponsor of this exploratory paper (JOB/SERV/299/Rev.1), the United Kingdom welcomes the opportunity to provide our first intervention on trade in environmental services.
Given the profound impact that climate change will have on our health, environment and security, it is right to explore whether there is a role that services liberalisation could play in facilitating the global response to tackling the effects of climate change. As our economy evolves in response to this and other global changes such as Covid-19, it is important that we ensure our international trading regime can best support and facilitate this. Liberalisation in environmental services, and those associated areas of the services discussed in the exploratory paper, can be a key part of this, providing an important boost to key growth areas in the global economy as well as mutually reinforcing efforts to move towards a greener economy.
The United Kingdom is a strong proponent of international initiatives to reduce global carbon emissions and is looking forward to hosting the 26th UN Climate Change Conference of the Parties in 2021.
Free trade is allowing us to use resources better and to promote the use of renewable energy sources – this has generated new global supply chains. The UK is committed to working with our international partners to make trade more sustainable. We will make it a priority to use our newly independent trade policy to tackle climate change, by liberalising over 100 environmental goods in our proposed UK Global Tariff. Exploring commitments to liberalise trade in environmental services is a natural next step.
The manufacture of components and the provision of services to support, for example, the supply of low carbon energy is increasingly sourced internationally. There are strong linkages between manufacturing, construction and environmental services. Efforts to liberalise environmental services would therefore support growth across the economy.
The impacts of climate change are felt very differently across the globe. Developing country members may be more vulnerable to the effects of climate change, because of higher dependence on natural resources, and decreased ability to cope with climate shocks. The impacts of climate change often compound existing vulnerabilities, further reducing access to drinking water, negatively affecting health and worsening food insecurity. Environmental services can help address these challenges, from protecting natural resources to limiting air and water pollution.
The United Nations Environment Programme predicts that environmental services businesses in developing countries would benefit from bigger growth potential in the sector. Only 14 percent of overall environmental revenues are currently generated by developing countries and economies in transition.
Undoubtedly, the environmental services sector has grown and evolved in line with a shift to more sustainable energy and infrastructure solutions and has an increasingly important role to play in supporting the global transition to a green and sustainable economy. In a recent survey undertaken by the Royal Institute of British Architects on the approach to sustainability of their membership, 47% of respondents described sustainability as at the core of everything they do and almost half of respondents said they would become obsolete if they did not design sustainable buildings.
As set out in an OECD report published in 2017 , restrictions to trade in environmental services can be linked to weaker export performance by firms providing these services, and consequently to a less innovative sector where new, clean technologies are more expensive and are not deployed as widely as they would have been if restrictions were removed.
It is timely therefore to consider whether improvements can be made to the overall level of GATS commitments in environmental and other related services to facilitate further global growth. The United Kingdom recognises that there are a wide range of relevant sectors beyond those captured by CPC 94. We have seen an increase in domestic demand for consultancy services relating to water quality and resource management, environmental impact assessments and ecological services as well as transport planning advice and environmental consultancy on acoustics, air quality and microclimate. We would be interested in understanding whether other members have seen a similar increase in domestic demand in these areas.
Environmental consulting is a growing sector for the UK and is growing at a compound annual rate of 3.4% per year over the past five years, with £1.9bn in revenues. This growth has been driven by growing public and government focus on environmental issues, which has attracted new suppliers and led to high and stable profit margins within the sector.
Turning to the W/120 sectors set out in table 1 of the exploratory paper, many of these have an environmental consulting services aspect. If improvements were made to GATS commitments in core environmental services and the related sub-sectors set out in the exploratory paper, this could have a profoundly liberalising effect, particularly when you consider the number of members that have taken commitments in these sectors.
The United Kingdom believes that discussion between members to identify particular subsectors that are relevant to addressing environmental objectives is an important step towards exploring what could be achieved multilaterally in trade in services to mitigate and respond to the impacts of climate change whilst at the same time growing our economies.
Thank you, Chair.