Description:

The project focuses on two clusters of activities:

(i) encouraging the use of economic instruments for internalizing environmental costs and benefits in prices of commodities and their products; and
(ii) promoting the export of environmentally preferable products of developing countries B a pro-active strategy on forging business partnerships;

Objectives and Activities:

1. On internalization of environmental costs and benefits

Since 1997, UNCTAD and the International Rubber Study Group (IRSG) have been organizing annual international workshops on internalization of environmental costs and benefits in prices of natural and synthetic rubber and their products as part of the International Rubber Forum, the biggest gathering of Government and private sector representatives for discussing salient trends in the world rubber economy. The workshops on sector-specific internalization allow a discussion of the pros and cons of the use of internalization instruments along the life cycle of natural rubber and its synthetic substitute. The workshops provide guidance to further analytical and empirical work on internalization by UNCTAD, IRSG and other interested bodies, including various industry associations (such as the US Rubber Manufacturers Association and the Liaison Office of the Rubber Industry of the EU). The workshops aim at making the discussion on the use of internalization instruments as pragmatic and results-oriented as possible with a view to encouraging Governments and the private sector to launch a number of pilot projects in order to learn by doing.

So far, three workshops have been held (in Manchester, UK, in June 1997, in Bali, Indonesia, in October 1998, and in Vera Cruz, Mexico, in October 1999. Discussions at the workshops have focussed on two issues:

• The use of payments for carbon sequestration services pursuant to the Kyoto Protocol of the Framework Convention on Climate Change for enhancing the competitiveness of natural rubber, encouraging the use of environmentally friendly production methods and the preservation of eco-balance and bio-diversity.

• The use of economic and supportive regulatory instruments for enhancing sustainable management of scrap tyres, including their re-use and recycling, with particular emphasis on developing countries.

2. On promoting the export of environmentally preferable products of developing countries

The conventional approach to changing consumption and production patterns in developed countries was too often reactive and discriminatory, with policy characterised by product bans and consumer action focussed on boycotts. Little thought went into the trade implications for developing countries, and the result was often bordering on protectionist measures. There is now increasing recognition of the need to switch from a unilateral imposition of social and environmental preferences to a partnership approach. This implies the forging of new trading relationships between producers in developing countries and their clients, citizen groups and Government agencies. It accepts the need for more time and support for developing country producers to make the transition to higher standards. It involves taking a pro-active stance towards the opportunities for using the marketplace as an arena for promoting innovation in environmental performance.

Although some developing countries have recently expanded their exports of several products with environmental and health advantages and thus profited from changes in consumption patterns in developed countries, the challenge now is to broaden the number of developing country enterprises that can turn this potential into practical financial, social and environmental gains. However, realizing these benefits will mean facing up to a range of policy, market and technical obstacles which currently prevent developing country producers from turning sustainable consumption into an export advantage. These obstacles include insufficient access to information, a lack of technical capacity, continuing trade barriers, an absence of supportive policies at home and abroad and weak business partnerships, all of which are particularly acute for small- and medium-sized enterprises and the least developed countries.

UNCTAD has therefore launched analytical work which is more commodity- and country-focussed and assists in developing a pro-active strategy among export-oriented firms in developing countries to harness the potential of sustainable consumption and green consumerism in developed countries. The objective of this work is to

(i) encourage company or (industry) association partnerships between eco-pioneers in developed and developing countries along the supply chain;

(ii) facilitate access to information on and review of existing and emerging environmental requirements in target markets;

(iii) facilitate the training of managers on cleaner production methods and products; and

(iv) encourage exporting firms in using environmental management systems, such as ISO 140001.

In co-operation with UNDP and GTZ, UNCTAD is preparing a bilateral workshop between Indian exporters, export promotion boards and Government bodies and German importers, wholesalers, industry associations and Government institutions to encourage the forging of pro-active business partnerships for enhancing production and export of organic food and beverages from India to Germany. The seminar is planned to be held as a side event during the BIOFACH trade fair in Nurnberg, Germany, in February 2000. The GTZ will organize this workshop and will prepare, in collaboration with UNCTAD and ITC, a brief overview of demand growth, growth patterns and certification and marketing requirements of organic food and beverages in Germany.

Within the framework of a UNDP-funded project on mainstreaming production and trading opportunities for environmentally preferable products from India, UNCTAD and GTZ, in co-ordination with ITC, are supporting a preparatory process in India for the bilateral seminar with German importers. This preparatory process includes a review of the supply potential of organically grown food and beverages, currently existing certification standards and schemes as well as the hurdles which need to be overcome to take advantage of the expanding market of organic food and beverages in Germany. This stock-taking review of the supply potential will be discussed at a seminar of concerned Indian stakeholders which aims at preparing the bilateral seminar on forging pro-active business partnerships in Germany. The preparatory process is co-ordinated at national level by the Indian Institute of Management in Calcutta.

Documentation:

• Proceedings of the first (.pdf, 200KB) and second (.pdf, 342KB) Joint Workshop of UNCTAD/IRSG on opportunities and constraints for the internalization of environmental costs and benefits into the prices of natural and synthetic rubber and products made thereof
  
  
• Sustainable development and the possibilities for the reflection of environmental costs in prices of natural commodities and their synthetic competitors, UNCTAD document TD/B/CN.1/29, Geneva, 1995.
  
  
• Profiting from Green consumerism in Germany - Opportunities for developing countries in three sectors: leather and footwear, textiles and clothing, and furniture. - Part I (.pdf, 142KB) and Part II (.pdf, 193KB)
  UNCTAD, Analytical Studies on Trade, Environment and Development (UNCTAD/DITC/TED/3), Geneva, 1999.
  
  
• Global market survey on organic products, ITC, Geneva, 1999 (forthcoming).
  
  
• Exporting organic products, Marketing handbook, GTZ/ProTrade, Frankfurt, 1997.

Of special interest to developing country exporters of organic products is also Green Trade Net (accessible at www.green-tradenet.de), which provides market information and links exporters with importers in Germany and elsewhere. It is sponsored by GTZ/ProTrade.

Project Manager: Ulrich Hoffmann