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