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REWARDING BENEFITS THROUGH PAYMENTS AND MARKETS
Box 5.36: Compatibility of GPP with free trade
rules and disciplines
The General Agreement on Tariffs and Trade (GATT)
requires States to treat foreign and domestically produced
goods alike (Article III – the ‘national treatment
obligation’) and prohibits discrimination against imported
goods that are ‘like’ domestically produced
goods, independent of how or where they have been
produced.
However, Article III.8(a) excludes all products consumed
by a government in the course of its normal
activity from the ‘national treatment obligation’
e.g. furniture, hospital material or social housing. This
means that GPP policies have significant scope to
explicitly promote biodiversity-friendly purchasing –
e.g. by specifying FSC timber based products –
without infringing GATT provisions.
Source: FSC 2008b
Fourth, differences in criteria and/or procedures amongst
different countries or administrations can create extra
costs and uncertainties. Some countries are moving beyond
GPP towards ‘sustainable public procurement’
(SPP) which combines environmental and social criteria
in purchasing decisions. Where priorities vary, procurement
criteria will obviously also vary between countries
or even between regional and local authorities.
In some cases, such differences have raised concerns
over international competitiveness. In general terms, there
is always the risk that GPP targets and criteria put strain
on free trade agreements or, in the case of the EU, the internal
market (e.g. criteria that give preference to national
producers could distort competition and create suspici-
ons of protectionism). Inclusion of social criteria could also
lead to conflicts under trade agreements (see discussion
of environmental protection obligations in the context of
the GATT/WTO in Box 5.28 and also Box 5.36 below).
GPP can yield broader results when combined
with development cooperation efforts and where
resources for capacity building and green industry
development are available. Supporting greener production
in countries of origin, especially developing
countries, will open up new markets to providers, improve
and expand a reliable supply of green products
and lower the price of green procurement.
Looking to the future:
• GPP is a policy instrument with considerable
environmental benefits, given the huge markets for
government purchases;
• most quantification of benefits has been based on
substitution costs (e.g. replacing virgin paper with
recycled), reduction in natural resource use (e.g.
water) or reduced emissions (e.g. GHG, pollution).
Much more work needs to be done to quantify the
benefits to biodiversity from certification and labelling
programmes;
• the time is right for committed governments to
upscale GPP and set national goals as first
lessons have been learned and criteria are being
devised and revised at an increasing rate;
• harmonisation where feasible could further lower
costs and increase GPP’s attractiveness;
• transparency and clarity are important for producers
at all levels and sizes;
• national GPP policies can be combined with development
objectives to support the development
of certified markets in other countries.
Chapter 5 has looked at a range of different instruments to reward providers of benefits from ecosystem
services or to reward products that have less impact on nature. The former included payments for environmental
services, mechanisms for access and benefit sharing for genetic resources as well as tax breaks
and transfers. The discussion of market-based reward tools has focused on certified products and the use
of public procurement to expand and green the markets.
Chapter 6 and 7 discuss closely-related tools. Chapter 6 considers the need for subsidy reform to
ensure that subsidies reflect the value of biodiversity and respond efficiently to current and future priorities.
Chapter 7 analyses ways in which regulation and pricing can minimise damage to natural capital:
these tools form an essential foundation for the markets analysed in Chapter 5.
TEEB FOR NATIONAL AND INTERNATIONAL POLICY MAKERS - CHAPTER 5: PAGE 61