RESTRICTEDWORLD TRADE
ORGANIZATIONWT/CTE/W/67/Add.1
13 March 1998
(98-1029)
Committee on Trade and Environment
ENVIRONMENTAL BENEFITS OF REMOVING
TRADE RESTRICTIONS AND DISTORTIONS
Note by the Secretariat
Addendum
IX. ENVIRONMENTAL SERVICES
A. Overview
1. The global market for environmental goods and services has been estimated by the OECD to
be approximately US$320 billion, with a rapid growth potential.1  Private sector industry surveys
estimate the environment industry will increase from US$469 billion in 1997 to US$600 billion by
2010, which represents an average annual rate of growth of 5 per cent.2  Estimates of the value and
growth potential vary widely based on the way in which the industry is defined.  As the environment
industry is not identified in standard industrial classification systems, emphasis has been placed on
categorizing which goods and services should be included.
2. The OECD and the Statistical Office of the European Commission (Eurostat) have recently
developed the following definition of the environment industry:
The environment industry consists of activities which
produce goods and services to measure, prevent, limit, minimize orcorrect environmental damage to water, air, and soil, as well as
problems related to waste, noise and eco-systems.  These include
cleaner technologies, products and services which reduce
environmental risk and minimize pollution and resource use although
there is currently no agreed methodology which allows their
contribution to be measured in a satisfactory way.
3
3. Activities of firms operating in the environment industry are equally distributed between the
manufacturing and services sectors.  In most cases, firms which produce environmental services alsoprovide the related environmental goods as part of an integrated package to address an environmental
                                                     
1OECD (1996),  The Global Environmental Goods and Services Industry ,  Paris.
2ECOTEC Research and Consulting Ltd. (1997), European Eco-industries database , prepared for the
EC Directorate-General for Environment, Nuclear Sa fety and Civil Protection (DGXI), Brussels;  and
Environmental Business International Inc. (1998), Global Environmental Markets and Environmental Industry
Exports , San Diego.
3 OECD (forthcoming), Environment Industry Manual:  Proposed Guidelines for the Collection and
Analysis of Data on the Environment Industry , Paris:  OECD Industry Division and Eurostat, p. 7.  See Annex I
for the classification system which has been developed.WT/CTE/W/67/Add.1
Page 2
problem.  This package provides comprehensive and specifically targeted project design and
management through the provision of engineering, construction, equipment, and operation and
maintenance of general utility facilities, such as water, pollution and waste management systems.
4. Although to date the principal producers and consumers of environmental goods and services
are OECD countries, the market in developing count ries is growing faster than that in developed
countries.
5. Table 1 provides an indication of the current structure of the environment industry in OECD
countries.
Table 1: Structure of the environment industry in OECD countries
Environment industry segments Share of the total environment industry
Equipment manufacturing 25 - 35 per cent
Construction and installation of facilities 15 - 25 per cent
General services operation 40 - 50 per cent
Engineering services 5 - 10 per cent
Research and development 2 - 4 per cent
Source:  OECD (forthcoming), Environment Industry Manual:  Proposed Guidelines for the Collection and Analysis of Data on the
Environment Industry , Paris:  OECD Industry Division and Eurostat, p. 17.  These estimates are derived from results of
environment industry surveys and studies in OECD countries.
6. The industry is comprised of small and medium-sized domestic and regional suppliers
(SMEs) and large multinational suppliers which tend to dominate a few market segments.  It is
estimated that a significant share of the industry 's turnover is generated by SMEs, which provide
specialized products or services for application to specific environment-related systems or subcontract
on large projects.4  Integrated multinational firms provide the full range of goods and services
required for environmental systems management.
7. Trade in environmental goods and services is estimated to be small, but increasing, ranging
from approximately 5-20 per cent of total turnover in the industry depending on the country.
8. To a great extent, the market for environmental goods and services depends on environmental
policies and regulations in individual countries and their enforcement, as well as increasing public
environmental awareness, corporate liability and recognition of the financial and quality gains from
environment-related investments.5
9. Changes in regulatory approaches have encouraged innovation in pollution and waste
prevention strategies over conventional end-of-pipe pollution and waste control.  For example, the use
                                                     
4ITC (1997), Implications of the Uruguay Round Agreements for International Trade in
Environmentally-Sound Technology and Related Products:  Overview , Geneva.
5For example, the requirement that publicly traded companies must report contingent liabilities with
respect to the environment on their future ability to generate stockholder value.  See World Resources Institute
(1995), Green Ledgers:  Case Studies in Corporate Environmental Accounting , Washington, D.C.WT/CTE/W/67/Add.1
Page 3
of economic and market based instruments (such as environmental charges and taxes,
marketable/tradable permits, and deposit refund schemes) aims to ensure that environmental targets
are met using cost effective means and that users of goods and services with the potential to benefit
the environment are rewarded.6
10. Several sources note that the market is expanding for environmental goods and services indeveloping countries.  With the objective of providing assisting exporters in developing countries todevelop this export potential, UNEP and UNIDO are establishing National Cleaner Production
Centres in several countries.  The International Trade Centre (ITC) has prepared a handbook on
environmental engineering and support services from developing countries for which there are
potential export markets.
7  Of importance to the growth of th e environment industry is the ability of
potential producers and consumers, particularly developing country SMEs, to be aware of export
opportunities for, and able to access information on environmental goods and services.8
11. For the most part, environmental goods and services are provided to general utilities projects,
such as water and waste treatment, which are often large, public, infrastructure projects in which
governments play direct roles in design, contracting and implementation.  Public sector capital
expenditures in both developed and developing countries on pollution control and water and waste
management is increasing, with more than a third of such spending on water purification and
wastewater treatment systems.  At present, by far the majority of public spending is by localmunicipalities rather than central governments.
12. The trend towards privatization of state-owned and operated utilities and other public
functions in many countries is facilitating greater private sector involvement in areas such as water
supply and waste management.
9  Privatization may allow for the capital and expertise required to up-
date, maintain and restructure environment-related infrastructure.  The impact of privatization has
been particularly significant in developing countries, where basic infrastructure has benefitted from
improvement, among other things, to cope with the pressures of increasing industrial activity and
urbanization.
(a) Classification of the environment industry
13. The OECD and Eurostat have proposed a general classification of the environment industry
which includes both environmental goods and services.10  This classification, contained in Annex I to
                                                     
6Ritu Kumar, et. al., (1997), Incentives for Eco-efficiency:  Market Based Instruments for Pollution
Prevention:  A Case Study of the Steel Sector in India , London:  International Institute for Environment and
Development, Delhi:  Confederation of Indian Industries, and Vienna:  UNIDO.
7ITC (1997), Environmental Engineering and Support Services :  A handbook for exporters from
developing countries , Geneva.
8Examples of market information on environmental goods and services include ITC (1997), op.cit.;
UNEP (1996), Survey of Information Systems and Sources Rela ted to Environmentally-Sound Technologies ,
Nairobi;  UNECE (1997), The Compendium of Soil Clean-up Technologies and Soil Remediation Companies ,
Geneva;  and UNIDO (1996), Study of Cleaner Production Techniques and Technologies, Covering Clusters of
Small Scale Industries in Selected Areas, Vienna.
9OECD (1996), The Global Environmental Goods and Services Industry , Paris.
10This classification draws on the implementation of existing classifications of industrial activities and
products such as the North American Industry Classification System, the UN Central Product Classification
(CPC) the International Standard Industrial Classification of all Economic Activities (ISIC) and the General
Industrial Classification of Economic Activities within the European Communities (NACE).WT/CTE/W/67/Add.1
Page 4
this Note,  is divided into three broad categories according to the kind of economic activity
undertaken:  (a) pollution management group;  (b) cleaner technologies and products group;  and (c)
resources management group.  This classification aims to be as complete and flexible as possible to
measure the industry as it currently is, and to allow for future structural changes such as shifts from
end-of-pipe to cleaner technologies or the development of new types of services with environmental
benefits.
14. The categories are set out in the following manner.  The "Pollution management" group
comprises activities that produce equipment, technolo gy or services to treat or remove environmental
effects.  Generally, this includes end-of-pipe equipment, technology and related services that areclearly supplied for an environmental purpose only and that are statistically identifiable.  In this
category, waste water management is considered to be an important activity in many countries and
regions identified by the OECD;  solid waste management and air pollution abatement services and
related equipment and technologies are expected to increase rapidly.  The fields of activity in this
category, which is the most developed of the categories, include:
- air pollution control;- waste water management;- solid waste management;- remediation/clean-up of soil and water;- noise/vibration abatement;- environmental monitoring, analysis and assessment;
- environmental research and development;  and
- environmental construction and engineering.
15. The "Cleaner technology and product" group comprises any activity which continuously
improves, reduces or eliminates the environmental impact of technologies, processes or products, butwhich are often supplied for other than environmental purposes and for which methods for assessment
remain under discussion.  This includes cleaner or resource efficient technology or products such as
those that reduce energy consumption, recover valu able by-products, reduce emissions, or minimize
waste disposal problems.
16. The "Resource management" group comprises activities which prevent environmental
damage to air, water and or soil.  This include s any activity that produces equipment, technology or
specific materials, designs, constructs or installs, manages or provides other services for recycling
new materials or products;  for the generation of renewable energy (such as biomass, solar, wind, tidalor geothermal sources);  for reducing climate change;  for sustainable agriculture and fisheries (such
as biotechnology applied to agriculture and fisheries activities);  for sustainable forest management;
for natural disaster risk management;  or related to eco-tourism.
17. "Cleaner technology and product" and "Resource management" are felt to be key areas as
their importance is expected to increase.  At present, there are identification or measurement problems
with these two groups as there is little comparability between existing data and agreement has not yet
been reached as to their definition.
18. As stated above, the OECD's classification of  the environment industry covers environmental
goods as well as services.  In the WTO, environmental goods and services are subject to differentlegal frameworks;  the GATT covers all environmental goods whilst the GATS covers environmental
services.
(b) The General Agreement on Trade in Services
19. Commitments made by WTO Members under the General Agreement on Trade in Services
(GATS) are in most cases based on the services sect oral classification list set out in Table 2 whichWT/CTE/W/67/Add.1
Page 5
was developed during the Uruguay Round.  In turn, this classification list largely follows the
provisional United Nations Central Product Clas sification (CPC) system.  Division 94 of the CPC
classification, attached as Annex II to this Note, sets out a more detailed list of the environmental
services which are included and excluded in this category.11
Table 2:  Services sectoral classification list
6.  Environmental Services CPC Code
A.  Sewage services 9401
B.  Refuse disposal services 9402
C.  Sanitation and similar services 9403
D.  Other ----
Source: MTN.GNS/W/120, July 1991, Group of Negotiations on Services.
20. During the Uruguay Round, 48 WTO Member countries (counting the EC Member Statesindividually) made commitments in their schedules under one or more of the four sub-sectors of"environmental services".  Annex III to this Note contains a list of countries and the environmental
services for which countries made commitments.  It should be kept in mind that these commitments
may be qualified by limitations on market access and national treatment that countries may have
included in their schedules with respect to any of the four modes of supply.
12  Although the GATS
provides for commitments on the specific category of "environmental services", other servicescategories may also be relevant to the environment, e.g., engineering, construction, or research and
development services.
13
(c) Related environmental goods
21. A definition of the specific product coverage of environmental goods which tend to
accompany environmental services has yet to be determined.  For example, it is often the case that theaccompanying guarantees on products, such as maintenance and repair, are important determining
factors based on which services are selected.  Other than by taking into account the end-use of goods
which may accompany environmental services, such goods are difficult to isolate as they generally
have multiple purposes.  For example, the treatment and purification of water requires equipment
components such as pumps, industrial valves, pipes, and storage tanks which are products that areused for many purposes.  Multiple purpose goods are estimated to account for a considerable share of
environmental equipment and goods sales.
22. Using the Harmonized Systems (HS) for international trade it would be possible to identify
codes for the types of goods of particular relevance to the provision of environmental services, such as
                                                     
11An updated CPC classification system, Revision 1, features a more detailed breakdown of
environmental services than contained in the provisional CPC.
12See WTO (1995), Environment and Services  (WT/CTE/W/9) for a description of the
complementarities between provision of a service with another product.
13As set out in MTN/GNS/W/120, 12 sectors of services have been identified:  business, distribution,
communication, educational, financial, consulting, environmental, health, tourism, engineering, transport,
sporting services and others.WT/CTE/W/67/Add.1
Page 6
those activities set out in Division 94 of the CPC (sewage, refuge, sanitation, etc.).  For example,
equipment for filtering and purifying air or water (HS 8421.39 and 21);  sewage pumps (HS 8413.81);
instruments for environmental monitoring (HS 9026.80);  and solar panels (HS 8422.20).
B. Trade Restrictions and Distortions
23. Identifying barriers to trade in environmental services will be facilitated when a more precise
definition of the services and accompanying goods included in the environment industry isdetermined.  In general terms, barriers to trade in both goods and services may arise from specific
market access restrictions, e.g., tariffs, non-tariff barriers, or restrictions on commercial presence.
24. Work to identify barriers to trade in environmental goods and services is being undertaken in
a manner that can serve as the basis for sector-specific trade liberalization in the Asia-Pacific
Economic Cooperation (APEC) follow ing the APEC Ministerial in November 1997.  At this meeting,
APEC Members agreed to pursue an ongoing vol untary programme of liberalization in 15 sectors,
including environmental goods and services, and to build on APEC's early voluntary liberalization inthese sectors as a basis for extending participation beyond the APEC region and, where appropriate,
for incorporation into the WTO.  APEC Ministers called for the development of appropriate
agreements or arrangements for 9 of the 15 sectors, including environmental goods and services, by
the first half of 1998, with a view to commencing implementation of liberalization in 1999.
14
25. Barriers to trade in environmental services may result from restrictions imposed on
commercial presence (Mode 3);  examples include limits on foreign ownership, the number of foreign
companies which can provide a service, the value of services foreigners can supply, or the eligibility
of foreign-owned companies for grants and other subsidies.  Certain professional environmental
service providers such as environmental engineers, consultants and auditors may face barriers to cross
border movement and temporary presence resulting from different qualifications or licensingrequirements.
26. Potential restrictions to trade in specific goods which tend to accompany the provision of
environmental services may take the form of tariffs, non-tariff barriers, and government procurement
related issues.
27. As environmental regulations and standards and their enforcement differ between countries,
this will affect market access for environmental goods and services.
28. Given the proportion of environmental goods and services which are procured by government
entities, public procurement policies would be expected to affect market access for both
environmental goods and services.  There are three parallel activities in the WTO with respect to
government procurement.  First, there is the plurilateral Agreement on Government Procurement(GPA), which to date involves the participation of 26 WTO Members.  The GPA includes
commitments which are contained in annexes setting out the government departments, public entities
and state-owned enterprises in each Party to the GPA which procure in accordance with the
disciplines established in the GPA and the goods and services included.  Second, the Working Group
on Transparency in Government Procurement established at the 1996 Ministerial Conference, which
involves all WTO Members, has a mandate to conduct a study on transparency in government
                                                     
14See the Joint statement of the APEC Ninth Ministerial Meeting, 21-22 November 1997 (issued as
WT/L/248).  The statement sets out the following 9 sectors identified by APEC Members for voluntaryliberalization commencing in 1999 wherever possible:  environmental goods and services, energy sector, fishand fish products, toys, forest products, gems and jewellery, medical equipment and instruments, chemicals andtelecommunications mutual recognition arrangement.  Ministers called for further preparatory work on 6 more
sectors:  food, natural and synthetic rubber, fertilizer s, automotive, oilseeds and oilseed products, and civil
aircraft.WT/CTE/W/67/Add.1
Page 7
procurement practices taking into account national policies, and, based on this study, to develop
elements for inclusion in an eventual agreement.
29. Third, Article XIII of the GATS provides for multilateral negotiations on government
procurement in services;  these negotiations are currently being conducted within the Working Party
on GATS Rules.  The purpose of these negotiations is to explore the possibility of applying
multilateral disciplines to government procurement covering all sectors of services.
30. Another issue concerns specific patented k now-how or technology which the supplier of an
environmental good or service may be encouraged to disseminate if intellectual property (IP)
protection is in place and enforced.  To the extent that IP protection is a barrier to the dissemination of
environmental goods and services, the TRIPS Agreement has put in place rules based on the concept
that strong protection will foster the creation and transfer of technology.  Where specific technical
knowledge is adopted as a standard for an industry (by means of government regulations or standards,
for example), IP owners may have to license their rights under reasonable conditions.  Compulsorylicensing is authorized under Article 31 provided its strictly specified conditions are met.
15
31. Several intergovernmental organizations have commenced work on the environment industry,including the OECD, APEC, UNCTAD, and ITC.  Wo rk was initiated at the November 1997 meeting
of the OECD Joint Session of Trade and Environment Experts to define the scope of the environment
industry, to identify the nature and extent of barriers to trade in this sector, including market accessbarriers such as tariffs and non-tariff measures, as well as issues related to public procurement
processes.  In preparation for the UNCTAD Expert Group meeting on environmental services in July
1998, UNCTAD is preparing a document on "Strengthening capacities in developing countries to
develop their environmental services sector", which will include information on how to categorize
environmental services, the structure of the market and trade flows in environmental services.  ITC isorganizing International Business Round Tables on the implications for technology-based exporters of
the Uruguay Round Agreements with a focus on emerging market niches for developing country
exporters of environmental goods and services.
C. Environmental Benefits
32. By promoting the freer flow of environmental goods and services, the removal of trade
restrictions and distortions in this sector has the potential to contribute to enhancing environmental
quality, as well as expanding markets and new investment opportunities.  Environmental goods and
services contribute to cost effective, resource efficient and environmentally-sound approaches to
resource use, and pollution and waste minimization with subsequent gains in productivity and
improvements in the performance of many industries and sectors.16  Trade liberalization will also
facilitate new market opportunities for the environment industry.
33. Demand for environmental goods and services results not only from compliance with
environmental standards and regulations, but also in  order to gain the economic benefits resulting
from more efficient processes which reduce consumption of raw materials and energy, and reduce
waste and pollution.  Conventional command and control approaches ensure compliance with
                                                     
15See WTO (1996), Factors Affecting Transfer of Environmentally-Sound Technology
(WT/CTE/W/22).
16See the contribution by the United States on Liberalization of Trade in Environmental Services and
the Environment  (WT/CTE/W/70).WT/CTE/W/67/Add.1
Page 8
standards for pollutant discharge or ambient quality whilst market based instruments involve a more
efficient and effective system based on, for example, pollution loads per tonne of finished product.17
34. Governments are establishing policies and programmes which encourage technologicalresearch and development, training and technology transfer of environmental equipment and services
through, for example, joint ventures.  OECD an d ITC studies on the environment industry provide
illustrative examples of the kinds of export en hancement initiatives for environmental goods and
services through governments and multilateral institutions, including planning, financing and
marketing of environmental goods and services, with concessional funding for exports to developing
countries.
18  Through the establishment of joint ventures whereby environmental expertise is imported
and used with indigenous capacity, it is possible to increase the adoption and operation of new
technologies and generate knowledge and skills which can contribute to improving the environment.
35. A recent OECD report assesses the economic benefits to be gained through the application of
cleaner production and waste minimization strategies in a range of sectors and regions.19  Examples in
this report illustrate that while stringent regulations, if they are unenforceable, often fail to achieve
environmental objectives such as reducing pollution, cleaner technologies achieve this goal while
creating substantial economic efficiencies.  Worth noting are references in the report which outline
that a wide range of some of the fastest growin g industrial sectors in developing countries would
benefit from enhanced access to environmental goods and services.  Examples of sectors and thecontribution of environmental goods and services include pulp and paper processing (chlorine
minimization);  steel smelting and refining (energy-efficient processes);  energy (cleaner burning and
fuel-efficient);  coal (cleaner combustion equipment);  automobile manufacturing (fuel-efficient
motors);  textiles (water-based dyes);  and footwear (chrome-free leather tanning).
36. Incentive to adopt cleaner technologies have also been stimulated by voluntary industry
standards.  These standards have the potentia l to contribute to more environmentally and
economically efficient processes and products through an evaluation of incremental environmental
performance, auditing and management systems.  Standards, norms and conformity assessment are
currently being developed, not only by governments but importantly through multilateral processes to
develop environmental management systems, such as ISO 14001 and the Environmental Managementand Auditing Systems (EMAS).  Such voluntary standards have the potential to move beyond
compliance with environmental laws and regulations in that they create incentives for industry to
make continuous improvements in environmental quality.  Environmental management standards are
cited by some sources as having a positive impact on firms making the transition to cleaner
production and waste reduction strategies.
20
                                                     
17OECD (1994),  Managing the Environment:  The Role of Economic Instruments , Paris;  and
D. O'Connor (1996), Applying Economic Instruments in Devel oping Countries:  From Theory to
Implementation , Paris:  OECD.
18OECD (1994), Export Promotion and Environmental Technologies , Environment Monographs
No. 87, Paris;  and ITC (1997), op.cit.;  US International Trade Commission (ITC) (1996), Global
Competitiveness of US Environmen tal Technology Industries:  Ai r Pollution Prevention and Control ,
Washington, D.C.;  and USITC (1995), Global Competitiveness of US Envi ronmental Technology Industries:
Municipal and Industrial Water and Wastewater Treatment , Washington, D.C.
19OECD (1998), Cleaner Production and Waste Minimization in OECD and Dynamic Non-Member
Countries , Paris.
20OECD (1998), Ibid.;  and "Companies going beyond compliance, investing in energy-efficient
technology", International Environment Reporter , 12 November 1997.WT/CTE/W/67/Add.1
Page 9
37. The argument that adopting less polluting and more resource efficient products, processes and
services will permit economic gains as well as contributing to improving environmental quality was a
message that emerged from the UNCED, particularly as set out in Chapter 34 of Agenda 21  on
"Transfer of environmentally-sound technology, cooperation and capacity building".  As follow-up,
the Commission on Sustainable Development's meeting in April 1998 will address several issues
related to environmental management tools for sustainable development, including:  (a) theinterrelationship of water, industry and cleaner production, including the management of water and its
supply by private entities;  and (b) the environment and other impacts of environmentally-sound
technologies.
21
38. Incentives to develop environment goods and services are also being stimulated bymultilateral environmental agreements, such as the Montreal Protocol on Substances that Deplete the
Ozone Layer and the United Nations Framework Convention on Climate Change (FCCC), in order for
Parties to meet multilaterally-agreed environmenta l targets.  The objectives of these agreements
would tend to increase demand for substitute technologies and stimulate investment and research and
development in environmental goods and services related to, for example, air pollution abatement.
An example is the result of the phase out of CFCs and other ozone depleting substances (ODS) under
the Montreal Protocol which has stimulated research and development into alternative substances and
technologies which do not involve the use of ODS.  Since 1991, financial resources have been madeavailable for the transfer of ozone-friendly technologies through the Multilateral Fund for the
Implementation of the Montreal Protocol.
22
39. To help achieve the commitments to reduce greenhouse gas emissions, the Kyoto Protocol tothe FCCC will stimulate the development and use of energy efficient and cleaner technology.
Investment will occur through Joint Implementation or the Clean Development Mechanism(provisions on securing credits for joint projects w ith development countries) either directly through
project financing or transfer of technology and know-how, or indirectly through funds set up by, for
example, the interim financial mechanism of the FCCC, the Global Environment Facility.
                                                     
21CSD (1998), Report of the Secretary-General on Industry and Sustainable Development ,
(E/CN.17/1998/4).
22See the communications to the Committee on Trade and Environment by the Multilateral Fund for the
Implementation of the Montreal Protocol (WT/CTE/W/60), the Montreal Protocol (WT/CTE/W/56) and the
Global Environment Facility (WT/CTE/W/58).WT/CTE/W/67/Add.1
Page 10
ANNEX I
Explanatory Notes on the OECD/Eurostat Classification
of the Environment Industry
The OECD and Eurostat have categorized environmental goods and services as follows23:
"THE 'POLLUTION MANAGEMENT' GROUP
A. Environmental GoodsAir pollution control
This class includes any activity that produces equipment, technology or specific materials for
the treatment and/or removal of exhaust gases and particulate matter from both stationary and mobile
sources.  It includes air-handling equipment, dust collectors, precipitators, filters, catalytic converters,
chemical treatment and recovery systems, specialized stacks incinerators, scrubbers, odour control
equipment, environmentally less-damaging specialized fuels.
Waste water management
This class includes any activity that  produces equipment, technology or specific materials for
collection, treatment and transport of waste water and cooling water.  It includes pipes, pumps, valves,
aeration equipment;  gravity sedimentation equipm ent, chemical treatment and recovery equipment;
biological recovery systems, oil/water separation systems, screens/strainers, sewage treatment
equipment, waste water reuse equipment;  water purification equipment and other water handlingsystems.
Solid waste management
This class includes any activity that produces equipment, technology or specific materials for
collection, treatment, transport, disposal and recovery of hazardous and non-hazardous solid waste.  It
includes waste storage and treatment equipment (thermal, biological, chemical), waste collectionequipment, waste disposal equipment, waste ha ndling equipment, waste separation and sorting
equipment, recovery equipment.  It also includ es equipment for outdoor sweeping and watering of
streets, paths, parking lots, etc.  It includes equi pment, technology or specific materials for treatment
of low level nuclear waste.  It excludes high level nuclear waste.  Recycling activities excludes
manufacture or production of new materials or products from recovered waste or scrap andsubsequent use of these materials or products.
Remediation and cleanup of soil, surface water and groundwater
This class includes any activity that produces equipment, technology or specific materials to
reduce the quantity of polluting materials in soil and water, including surface water, groundwater and
sea water.  It includes absorbents, chemicals and bioremediators for cleaning-up, as well as cleaning-up systems either in situ  or in appropriate installations.
                                                     
23OECD (forthcoming), Environment Industry Manual :  Proposed Guidelines for the Collection and
Analysis of Data on the Environment Industry , Paris:  OECD Industry Division and EUROSTAT, pp. 37-42.WT/CTE/W/67/Add.1
Page 11
Noise and vibration abatement
This class includes any activity that produces equipment, technology or specific materials to
reduce or eliminate the emission and propagation of noise and vibration both at source and dispersed.
It includes mufflers/silencers, noise deadening material, noise control equipment and systems
vibration control equipment and systems.
Environmental monitoring, analysis and assessment
This class includes any activity that  produces equipment, technology or specific materials for
sampling, measurement, and subsequent recording, analysis and assessment of various characteristic
of environmental media.  It includes measuring and monitoring equipment, sampling systems, data
acquisition equipment, other instruments or machin es for measurement.  Environmental information
systems, analytical software, specific safety and personal protection are included.
B. Environmental Services
Air pollution control
This class includes any activity that designs, manages systems or provides other services for
treatment and/or removal of exhaust gases and particulate matter from both stationary and mobile
sources.
Waste water management
This class includes any activity that designs, operates systems or provides other services for
collection, treatment and transport of waste water and cooling water.  It includes design, management
or other services for sewage treatment systems, waste water reuse systems, water handling systems.
Solid waste management
This class includes any activity that  designs, operates systems or provides other services for
the collection, treatment, management, transport, storage and recovery of hazardous and non-hazardous solid waste.  It includes design, management or other services for waste handling
(collection, transports separation, sorting and disposal), operation of  sites, recycling (including
collection of waste and scrap), operation of recycling plants.  It includes services for outdoor
sweeping and watering of streets, paths, parking lots, etc.  Services for treatment of low level nuclear
waste are included.  It excludes high level nuclear waste.  It excludes services for  manufacture of newmaterials or products from recovered waste or scrap and subsequent use of these materials or
products.
Remediation and cleanup of soil, surface water  and groundwater
This class includes any activity that designs, manages systems or provides other services to
reduce the quantity of polluting materials in soil and water, including surface water, groundwater andsea water.  It includes cleaning-up systems either in situ  or in appropriate installations, emergency
response and spills cleanup systems.  Treatment of water and dredging residues are included.
Noise and vibration abatement
This class includes any activity that designs, manages systems or provides other services to
reduce or eliminate the emission of noise and vibr ation both at source and dispersed.  It includes
designing, management or other services for acoustic and sound-proof screens and street covering.WT/CTE/W/67/Add.1
Page 12
Environmental R&D
This class includes any systematic and creative activity which is concerned with the
generation, advancement, dissemination and application of scientific and technological knowledge to
reduce or eliminate emissions in all environmental media and to improve environmental quality.  It
includes creative scientific and technological activities for the development of cleaner products,
processes and technologies.  It includes non-technological research to improve knowledge onecosystems and the impact of human activities on the environment.
Environmental contracting and engineering
This class includes any activity that investigates feasibility, designs and manages
environmental projects which are not included elsewhere.  It includes multidisciplinary environmental
contracting and engineering.  Environmental management consulting, and auditors are included.
Analytical services, data collection, analysis and assessment
This class includes any activity that  designs, manages systems or provides other services to
sample, measure, and record various characteristics of environmental media.  It includes monitoring
sites, both operating singly and in networks, and covering one or more environmental medium.
Health, safety, toxicology studies, and analytical laboratory services are included.  Weather stations
are excluded.
Education, training, information
This class includes any activity that provides environmental education or training or
disseminates environmental information and which is executed by specialized institutions or other
specialized suppliers.  It includes education, training, and information management for the general
public, and specific environmental work-place education and training.  The activities of  the general
educational system are excluded.
C. Construction
This class includes any activity for the construction and installation of facilities for:  air
pollution control;  waste water management;  solid waste management;  remediation and cleanup of
soil, water and groundwater;  noise and vibration abatement;  environmental monitoring, analysis and
assessment;  other environmental facilities.
THE 'CLEANER TECHNOLOGY AND PRODUCT' GROUP
This group includes any activity which continuously improves, reduces or eliminates the
environmental impact of technologies, processes or products.
Cleaner/resource efficient technology
Cleaner and resource efficient technologies decrease material inputs, reduce energy
consumption, recover valuable by-products, reduce em issions, minimize waste disposal problems, or
some combination of these.WT/CTE/W/67/Add.1
Page 13
Cleaner/resource efficient product
Cleaner or resource efficient products decrease material inputs, improve product quality,
reduce energy consumption, minimize waste disposal problems, reduce emission during use, or some
combination of these.
THE 'RESOURCES MANAGEMENT' GROUP
NOTE:  In the case of the 'Resources management' group, activities aimed at the production of
environmental goods and services and connected construction are gathered together for convenience.
However, it is suggested that wherever possible information on these items be separately collected
and presented.
Indoor air pollution control
This class includes any activity that produces equipment, technology or specific materials,
designs, constructs or installs, manages or provides other services for the treatment and renewal of
indoor air to remove pollutants.  It excludes air-conditioning.
Potable water treatment and distribution
This class includes any activity that produces equipment, technology or specific materials,
designs, constructs or installs, manages or provides other services for water supply and delivery
systems, both publicly and privately owned.  It includes any activities aiming to collect, purify and
distribute potable water to household, industrial, commercial or other users.
Recycled materials
This class includes any activity that produces equipment, technology or specific materials,
designs, constructs or installs, manages or provides other services for manufacturing new materials or
products, separately identified as recycled, from recovered waste or scrap, or preparation of such
materials or products for subsequent use.
Renewable energy plant
This class includes any activity that produces equipment, technology or specific materials,
designs, constructs or installs, manages or provides other services for the generation, collection or
transmission of energy from renewable sources, includ ing biomass, solar, wind, tidal, or geothermal
sources.
Heat/energy saving and management
This class includes any activity that produces equipment, technology or specific materials,
designs, constructs or installs, manages or provides other services to reduce heat and energy use or
minimize heat and energy loss (e.g. co-generation) .  It includes equipment, technology or specific
materials to reduce climate change.
Sustainable agriculture and fisheries
This class includes any activity that produces equipment, technology or specific materials,
designs, constructs or installs, manages or provides other services for systems which reduce theWT/CTE/W/67/Add.1
Page 14
environmental impact of agriculture and fishery activities.  It includes biotechnology applied to
agriculture and fishery activities.
Sustainable forestry
This class includes any activity that produces equipment, technology, or specific materials,
designs, constructs or installs, manages or provides other services for programmes and projects for
reforestation and forest management on a long term sustainable basis.
Natural risk management
This class includes any activity that produces equipment, technology, or specific materials,
designs, constructs or installs, manages or provides other services for systems to prevent or reduce the
impact of natural disasters (storms, floods, volcanic eruptions, etc.).
Eco-tourism
This class includes any activity that designs, constructs, installs, manages or provides other
services for tourism that involves protection and management of natural and cultural heritage, oreducation and interpretation of the natural environment, and that do not damage or degrade the natural
environment.
Other
This class includes any activity that measures, prevents, limits or corrects environmental
damage to air, water, and soil, as well as problems related to waste, noise and eco-systems, which is
not included in any other class.  These activities should be separately specified and listed."WT/CTE/W/67/Add.1
Page 15
ANNEX II
The UN Central Product Classification
940 SEWAGE AND REFUSE DISPOSAL, SANITATION AND OTHER ENVIRONMENTAL 
PROTECTION SERVICES
9401 94010 Sewage services
Sewage removal, treatment and disposal services.  Equipment used are waste pipes, sewers or
drains, cesspools or septic thanks and processes utilized may be dilution, screening and
filtering, sedimentation, chemical precipitation, etc.
Exclusions:  Collection, purification and distribution services of water are classified in
subclass 18000 (Natural water).Construction, repair and alteration work of sewers are classified in subclass 51330
(Construction work for waterways, harbours, dams and other waterworks).
9402 94020 Refuse disposal services
Refuse collection and disposal services.  Collection services of garbage, trash, rubbish and
waste, whether from households or from industrial and commercial establishments, transport
services and disposal services by incineration or by other means.  Waste reduction services
are also included.
Exclusions:  Dealing services in wastes or scraps are classified in subclass 62118 (Sales on a
fee or contract basis of goods n.e.c.) and 62278 (Wholesale trade services of waste and scrap
and materials for recycling).
Research and experimental development services on environmental issues are classified in
division 85.
Regulatory administrative services by the government related to environmental issues are
classified in subclass 91123 (Administrative housing and community amenity services),
91131 (Administrative agriculture, forestry, fishing and hunting related services) and 91132
(Administrative fuel and energy related services).
9403 94030 Sanitation and similar services
Other sanitation and similar services including outdoor sweeping services and snow- and
ice-clearing services.
Exclusion:  Disinfecting and exterminating services for buildings and other non-agricultural
structures are classified in subclass 87401.Pest control services in connection with agriculture are classified in subclass 88110 (Services
incidental to agriculture).WT/CTE/W/67/Add.1
Page 16
9404 94040 Cleaning services of exhaust gases
Emission monitoring and control services of pollutants into the air, whether from mobile or
stationary sources, mostly caused by the burning of fossil fuels.  Concentration monitoring,
control and reduction services of pollutants in ambient air, especially in urban areas.
9405 94050 Noise abatement services
Noise pollution monitoring, control and abatement services, e.g. traffic-related noise
abatement services in urban areas.
9406 94060 Nature and landscape protection services
Ecological system protection services, e.g. of lakes, coastlines and coastal waters, dryland,
etc., including their respective fauna, flora and habitats.  Services consisting in studies on the
interrelationship between environment and climate (e.g. greenhouse effect), including natural
disaster assessment and abatement services.  Landscape protection services not elsewhere
classified.
Exclusion:  Forest and damage assessment and abatement services are classified in group 881
(Services incidental to agriculture, hunting and forestry).
9409 94090 Other environmental protection services n.e.c.
Other environmental protection services not elsewhere classified, e.g. acidifying deposition
("acid rain") monitoring, controlling and damage assessment services.WT/CTE/W/67/Add.1
Page 17
ANNEX III:  GATS Commitments on Environmental Services
Countries Sewage Services
(6.A)Refuse Disposal
Services (6.B)Sanitation and
Similar Services
(6.C)Other
(6.D)Total
Australia 1 1  1 3
Bulgaria 1 1  1 1 4
Canada 1 1 1 1 4
Central African Rep. 11
Colombia 11
Czech Republic 1 1 1 3
E c u a d o r 11114
El Salvador  11
European Community (15) 1 1 1 1 4
Gambia 1 1 2
Guinea 1 1 2
Hungary 1 1 2
Iceland 1 1 1 1 4
I s r a e l 11114
J a p a n 11114
Korea RP 1 1 1 3
Kuwait 1 1 1  3
L e s o t h o 11114
Liechtenstein 1 1 1 1 4
Morocco 1 1 1 1 4
N o r w a y 11114
Panama 11
Poland 11
Q a t a r 11114
Romania 11
Rwanda 11
S i e r r a  L e o n e 11114
Slovak Republic 1 1 1 3
S l o v e n i a 11114
S o u t h  A f r i c a 11114
Switzerland 1 1 1 1 4
T h a i l a n d 11114
Turkey 1 1 1 3
United Arab Emirates 1 1 1 1 4
U S A 11114
T o t a l 2 92 93 02 9 1 1 7
Source: Overview of services schedules carried out by the WTO Trade in Services Division.  The commitments normally cover all fo ur
Modes of supplyset out under the GATS.
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