Problem Statement:
For many environmentally damaging industries and countries, rich of environmental values exists an interest to increase the comparative advantage to gain market shares and earn foreign currencies. In extreme, this can lead to a race to the bottom, while label production has naturally a limited potential and transparency in complex products (such as a smartphone) is difficult to obtain for all its primary products and production stages. So the question is, how to raise generally the production standards to reduce the negative impact on environment and biodiversity?
Potential Solutions:
Two potential approaches are possible:
- A global minimum production standard is developed and globally implemented
- Global trade regulations are adapted to create an interest for the producing countries to have reasonable minimum production standards
Evaluation of the potential solutions:
The first approach already exists in the field of labor with the ILO minimum standards for all workers. While with the CBD or the UNEP potential institutions for the development and overall implementation exists, the diverse environmental conditions on the globe makes it difficult to create a reasonably high standard which is applicable globally. In addition, a global minimum standard could create an interest to lower the national standards in countries, where it’s a little higher now.
The second approach would introduce an incentive to improve the national minimum production standards, adapted to the specific needs and possibilities. With the WTO a globally working institution exists to provide a legal framework. Within the WTO, it’s also recognized that it must take more responsibilities towards sustainable development and conservation. Thus, a window of opportunity is open to introduce possible ways to reform the WTO.
The idea:
Each importing country must apply within the WTO framework a minimum tariff when importing goods from another country. This minimum tariff depends on the biodiversity conservation efforts of the exporting country. With this, the comparative advantage of destructive practices within the trade framework will be minimized. The biodiversity conservation efforts of each country could be measured in three categories: (1) current state of the biodiversity, (2) legal framework for biodiversity conservation and (3) its implementation. A combined score will set the level of minimum tariff, the higher the score, the lower the tariff. While making good laws is possible for all countries, generally speaking, its implementation is easier for rich countries. On the other hand, poor countries often have an advantage regarding the current state of the biodiversity as rich countries often destroyed it on their way of development. So, this system won’t create an advantage for rich countries but provide an incentive for all to tackle their respective challenges. In most cases, it will be easier to improve the implementation of strict conservation laws than to improve a bad state of the biodiversity.
Within all three categories, potential indicators already exist within different frameworks such as the IUCN, CBD (Aichi goals) or Transparency International.
