Environmental goods and services in WTO: concepts, trade barriers and scenarios for negotiation on Brazilian ethanol

• Grant number: 10/02872-7
• Support Opportunities: Scholarships abroad - Research
• Start date: July 16, 2010
• End date: December 21, 2010
• Field of knowledge: Applied Social Sciences - Economics - Agrarian and Natural Resource Economics
• Principal Investigator: Sílvia Helena Galvão de Miranda
• Grantee: Sílvia Helena Galvão de Miranda
• Host Investigator: David Blandford
• Host Institution: Escola Superior de Agricultura Luiz de Queiroz (ESALQ). Universidade de São Paulo (USP). Piracicaba , SP, Brazil
• Institution abroad: Pennsylvania State University, United States

Abstract

This proposal aims at analyzing the scenarios for the negotiation on Environmental Goods and Services (EGS) in the World Trade Organization (WTO) for biofuels, and particularly for ethanol. In order to have a better scenario for such a discussion, two specific elements are relevant: the concepts of environmental goods and services and the definition for the environmental trade barriers. To approach these subjects there will be a critical review of international literature on the concepts of environmental goods and on how the biofuels fit in it. This debate is not completely finished at WTO. The second topic comprises a proposal on the classification of environmental goods. The classification of non-tariff measures that affect trade has advanced since 2008, when it was launched a study of the Multi-Agency Support Team (MAST). However MAST has not included enough detail on the environmental measures, regarding their importance to the current international commerce. In order to evaluate impacts of different scenarios for the biofuels negotiation, a partial equilibrium model - the PEATSim, was chosen due to its details on products, countries and agricultural policies descriptions. This model will be adjusted to have a better representation on countries' biofuels policies, as well as to enhance the supply and demand equations that represent Brazilian sectors, in such a way that the cross-effects between commodities shall be better captured. The trade and environment issue, and particularly the EGS negotiation, is important to Brazil because of potentially significant implications to trade balance and to social welfare (jobs, food security). Moreover, this subject has not been sufficiently explored by national academia. This proposal aims also at getting access and knowledge on the PEATSim, which has been a model applied by the United States Department of Agriculture to assess scenarios on trade and agricultural policies changes. Currently, there are not researchers in ESALQ's Department of Economics working systematically on partial equilibrium models and, so, the goal is that this study provides a start for this modeling approach, and further applications to sanitary barriers. As results, it is expected to have a proposal to classify the environmental barriers to trade and a quantitative evaluation of several scenarios on the EGS negotiation at WTO for ethanol, taking into account the possible concepts to EGS. It is worth mentioning that the activities related to the modeling adjustment will be conducted in the PSU, while the policies simulations will be in Brazil. (AU)