 |
|
V. MULTILATERAL TRADE AND ENVIRONMENT AGREEMENTS
[ V | V-A | V-B | V-C | V-D | V-E ]
E. International Commodity-Related Environmental Agreement
[ E | E-1 | E-2 | E-3 | E-4 ]
1. Concept of International Commodity-Related Environmental Agreements
New commodity pricing arrangements that reflect the costs and benefits of environmental protection are essential to the promotion of sustainable development. In that regard, international trade can become a primary vehicle for the internalization of environmental costs. Through negotiated full cost prices, ICREAs internalize the costs associated with the introduction of clean technologies, commodity diversification and sustainable management practices. The costs are then borne by the beneficiaries of the services rendered by the commodities. Revenues could be administered by each ICREA secretariat. ICREAs are not oriented towards price stabilization, but are created solely to deal with commodity-specific environmental issues in relation to international trade (Kox and Linnemann, 1993). The underlying objectives of ICREAs in order of importance are (Kox, 1994):
- To internalize environmental externalities in the price of exported commodities, so that the ultimate consumers in the long term pay the full resource costs;
- To promote eco-friendly production methods for a specific primary export commodity;
- To support governments of exporting developing countries in creating ecological policies for the export sector;
- To contribute to export diversification programmes in developing countries where natural preconditions are not fit for producing the commodity in an environmentally sound way, but where a lack of alternative foreign exchange sources would otherwise impede participation.
|
|
|
