UN environment head calls for better balance between trade and natural resources

Better balance is needed between liberalizing trade and protecting natural resources, the head of the United Nations environment agency has said, warning that such “natural capital” is being exhausted at an alarming rate and calling for “intelligent” globalization that guarantees sustainability for future generations.

“Money may make the world go round. But we know what makes a significant amount of that money is natural capital – the goods and services provided by nature. We also know… that a great deal of this capital is being run down,” Achim Steiner, Under-Secretary General and Executive Director of the UN Environment Programme (UNEP) told the World Trade Organization (WTO) yesterday.

“It is clear that a better balance is needed that capitalizes on the benefits of trade liberalization with the absolute necessity of maintaining and re-investing in the global natural resource base… what we really need is ‘intelligent’ rather than benevolent globalisation – one that produces sustainable markets through sustainable trade.”

He acknowledged that the challenges of making international trade work sustainably for everyone is a key goal of the WTO, as well as for UNEP, while also emphasizing that environmental policy, far from being a brake on trade, is “emerging as a powerful new force generating new kinds of trading opportunities.”

Citing various examples of environmental agreements, including the Kyoto Protocol on Climate Change, he said that these were expanding the notion of trade as a powerful force for sustainable development, pointing out for example that the Kyoto agreement has triggered new flows of funds from developing to developed countries.

“Poverty is not only a challenge to the environment and sustainable development; it is an obstacle to trade. So environmental treaties like Kyoto can, by bringing development and wealth to the poor, create billions of new consumers on continents like Africa, Asia and Latin America who can genuinely participate in the global market place.”

Mr. Steiner also highlighted the sustainability and trade aspects of other initiatives, as well as raising the possibility of payments for ecosystem services, noting that some economists argue that the amount of carbon removed from the atmosphere by tropical forests may be worth up to hundreds of billions of dollars per year but the countries whose forests remove this pollution are paid nothing.

“So why do we not pay communities in the tropics for maintaining forests and the ecosystem services they provide in terms of carbon removal? Could we extend payment for ecosystem services further or develop flexible trade-related mechanisms – like those developed for Kyoto – further to more sustainably manage other natural resources.”