Executive Summary
In 2003, the OECD’s Joint Working Party on Trade and Environment (JWPTE) commissioned seven
country studies to examine the benefits realised by recent OECD members and observers from the
liberalisation of trade in environmental goods and services. At about the same time, similar country studies
were undertaken by UNCTAD (six studies) and the UNDP (four studies). This paper examines all 17
country studies commissioned by the three international organisations, covering: Brazil, Chile, China,
Cuba, the Czech Republic, the Dominican Republic, Guatemala, Honduras, Israel, Kenya, Korea, Mexico,
Nicaragua, Pakistan, Panama, Thailand and Vietnam.
The paper is intended to inform discussions of the development dimension of environmental goods
and services (EG&S) by providing background on how EG&S markets have been evolving in recent years
in developing and emerging economies. The first section identifies the key determinants of demand for
EG&S. Generally, countries with complementary determinants of demand have experienced stronger
growth in their EG&S markets than countries with contradictory determinants of demand. Results suggest
that demand for EG&S is driven by the interplay of determinants, rather than by any single determinant.
The nature of the market for EG&S in each of the 17 countries is also reviewed. Consumption of
EG&S has grown over the last decade and is expected to expand significantly in the next five to ten years.
While it is not surprising that Japan, the United States and the European Union continue to be major
exporters of environmental goods (as defined by the OECD and APEC lists), the direction of the trade
flows has varied according to importing region: the Latin American countries seem to favour US suppliers,
while Asian counties source their EG&S predominantly from Japan, and increasingly from China.
Anecdotal evidence suggests that imports are being used to remedy environmental problems that locally
produced EG&S cannot resolve. Many developing countries are exploiting niche markets and developing
their own export capacity.
The paper also examines in greater detail demand determinants in four key areas: water supply and
wastewater treatment, solid-waste management, hazardous-waste management and air pollution control. In
most of the 17 countries the public sector remains largely responsible, either directly or indirectly, for
providing these services. At the same time, new policies and regulations are being introduced to increase
the participation of the private sector, and many publicly controlled services are being outsourced to
private (domestic and foreign) companies. Many countries’ environmental laws and standards, often
introduced in the 1990s, need strengthening, suggesting new opportunities for EG&S markets in the future.

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