· Each member economy should adopt and implement sound environmental policies and standards that are supportive of development objectives, reflect its environmental priorities, and are consistent with multilateral environmental priorities. Such policies and standards should be transparent and be based on performance and outcomes rather than be prescriptive in nature enabling companies to achieve compliance through the use of the most efficient and effective technologies;
· Environmental standards, regulations, and policies should be science-based and cost-effective, with minimal impact on trade and investment; environmental policies should not constitute a disguised barrier to trade and investment;
· Any new multilateral initiatives to reduce greenhouse gas emissions should specifically consider and address the potential negative economic impacts on both developed and developing economies; and
· PBEC is prepared to work closely with individual governments to develop appropriate policies on the environment for consideration at future APEC meetings.
I. Environmental Policies
Uniform environmental standards in the Pacific Basin may not be practical, economical, or politically viable for many economies. Agenda 21, which was adopted by the United Nations Conference on Environment and Development in 1992, recognized that "environmental standards valid for developed countries may have unwarranted social and economic costs in developing countries." It should be recognized that economic and social priorities in developing economies are different from those in developed economies. This principle does not suggest that environmental issues should be ignored in developing economies. Rather it calls for the recognition of environmental programs as one component of an overall plan for economic development. For instance, opportunities for regional standards may exist where common environmental problems are faced by a number of geographically proximal economies. Such a program approach may achieve a significant environmental benefit at lower cost.
Each Pacific Basin economy has a duty to its citizens, based on existing economic and physical conditions, resources available, and pressing health and social needs, to determine its appropriate environmental objectives and policies. For example, basic ground level environmental problems involving air and water quality and waste management are generally key concerns. Industrialized economies should recognize the importance of developing sound environmental infrastructure and assist developing economies by sharing their experiences and identifying environmental policies that have worked, thereby avoiding costly regulatory excesses and mistakes. In general, environmental policies should be developed taking into consideration risk, costs, recognized scientific standards, and community values and expectations.
Business can also make a major contribution by means of technology cooperation and partnerships with developing economies -- partnerships that bring environmental benefits. With a well thought out program of cooperation and planning regarding environmental protection, Pacific Basin governments can foster a climate that encourages foreign investment, innovative partnerships, and the diffusion of sound technology. Mandatory investment or technology transfers should not, however, be a condition of doing business in a particular economy.
In order to ensure the strong support of the business and investment community in economic development and environmental protection, economies must have transparent, consistently administered environmental standards and regulations, effective consultation processes, and clear criteria for decision-making. This will help ensure timely decisions, uniform treatment, and use of the most efficient technologies and equipment, and provide the basis for sound economic planning.
II. Trade and the Environment
Trade and environmental policies can and should be mutually supportive. Sustainable development in Pacific Basin economies can only be achieved by fostering economic growth while, at the same time, protecting public health, welfare, and the environment. This will require free and fair trade and investment flows guided by clear laws and well-enforced policies.
The use of trade sanctions to enforce environmental laws or policy is inappropriate and should be discouraged as damaging to all economies. Multilateral agreements are the most appropriate means to resolve transboundary or global environmental problems. Such agreements should be based on sound scientific evidence and evaluation of the problem(s). Agreements should also respect the sovereign right of economies, while avoiding the creation of a patchwork of incongruous environmental standards and policies, and minimizing the risk of trade and investment disruptions.
PBEC believes trade and environmental objectives should not be linked; rather should be developed to stand independently, but on a complementary, consistent, strong, and enforceable basis. The newly created World Trade Organization (WTO) is the international body best suited to prevent the misuse of environmental policies for protectionist purposes.
The principal objectives of multilateral agreements such as the GATT and NAFTA have been and should remain the liberalization of trade and investment and the promotion of economic growth. The successful conclusion of a trade pact should not be compromised or delayed by efforts to solve specific environmental problems. Conversely, the conclusion of an environmental agreement should not be held hostage to the successful resolution of trade and investment disputes.
III. Climate Change
The United Nations Framework Convention on Climate Change came into force on March 21, 1994. This international treaty, signed during the Earth Summit in Rio de Janeiro in June 1992, has as its objective the stabilization of greenhouse gas concentrations in the atmosphere at a level (not yet identified) that will avoid harmful changes in the climate. As a first step, industrialized economies (basically the OECD) have undertaken to develop individual action plans that aim to return greenhouse gas emissions to 1990 levels by the year 2000.
The first meeting of the Conference of Parties (COP-1) took place in Berlin at the end of March 1995. At this meeting it became clear that a number of industrialized economies have not yet developed action plans for controlling greenhouse gas emissions. In addition, most of the economies that have implemented action plans acknowledge they will not be able to achieve 1990 emissions levels by the year 2000. These factors notwithstanding, the industrialized economies have agreed to begin the process of negotiating new objectives for the post-2000 time frame. Many would regard this as premature, particularly since no major scientific breakthrough has occurred in climate change research that would support the call for new commitments at this time.
Negotiations for new commitments are to begin later in 1995; they are to be completed by 1997. The form of any new commitments is, of course, not yet known, although some economies are calling for specific quantitative targets to be reached within specified time frames that could call for significant reductions in CO2 emissions. It is possible carbon taxes could be included in new initiatives.
Developing economies, which have been exempted from the next round of commitments but will participate in the negotiating process, will want to ensure that industrialized economies do not take actions that will result in reduced economic growth rates for the industrialized economies since many of the developing world's exports are purchased by industrialized economies. Also, developing economies should be alert to initiatives by industrialized economies that result in competitive shifts that will, in turn, promote offsetting protective taxes and duties in the industrialized economies.
Industrialized economies should make every effort to involve the developing world in this next round of commitments if concerns over the potential environmental consequences of climate change are scientifically justified. Most of the growth in greenhouse gas emissions in the 21st century will occur in developing economies. Industrialized economies should also seek to ensure developing economies gain no competitive advantage in OECD markets as a result of ill-advised climate change initiatives. Industrialized economies should remain alert to environmental migration of industrial plants as well.
The two forthcoming years of negotiations on climate change commitments will be of significant interest to global industry. Economic growth projections and international trade competitiveness are at stake.
IV. Government Cooperation
There have been several meetings of APEC leaders and ministers in which environmental issues have been considered. The Leaders' meeting in Seattle in November 1993, the Environment Ministers meeting in Vancouver in March 1994, the Environmental Experts meeting in Chinese Taipei in August 1994, and the Leaders' meetings in Bogor, Indonesia and Osaka, Japan are examples. Japan, which hosted the APEC Summit in 1995, has drafted The 3Es Paper, which focuses on the relationship between energy, the environment, and economic growth. The report examines the increasing demand for energy in Asia alongside the growing significance of environmental issues in the region.
PBEC intends to review documents such as Japan's 3Es Paper and other APEC declarations or initiatives, and offer constructive recommendations from a business perspective for consideration at future APEC meetings. PBEC is also prepared to examine statements issued in certain other multilateral trade and business fora where environmental issues are considered.