GREENING TRADE IN SERVICES: LEVERAGING ENVIRONMENTAL SERVICES FOR SUSTAINABLE DEVELOPMENT IN THE GLOBAL SOUTH

Abstract

Environmental services represent a critical yet underutilized avenue for advancing sustainable development and fostering green economic growth in the Global South. This paper provides a comprehensive examination of the complex legal, institutional, and international trade frameworks that influence the expansion and integration of environmental services trade in developing countries. By analyzing key sectors such as waste management, water and sanitation, renewable energy, environmental consulting, and ecosystem services, with illustrative case studies from India, Kenya, and Brazil, the study highlights significant opportunities for economic diversification and climate resilience, alongside persistent challenges including infrastructural deficits, regulatory fragmentation, and skill shortages. The research critically evaluates the role of multilateral institutions, particularly the World Trade Organization (WTO), regional trade agreements (RTAs), and emerging plurilateral initiatives, in shaping trade policies that impact environmental services. It identifies shortcomings in the current classification systems, regulatory inconsistencies, and limited commitments by developing countries that constrain their effective participation in global environmental services markets. The study proposes strategic pathways for the Global South encompassing enhanced policy coherence, export portfolio diversification, strengthened regional cooperation, capacity-building in human capital, and more assertive engagement in trade negotiations to reshape international trade rules in favor of sustainable development. Furthermore, the paper offers detailed legal and trade policy recommendations aimed at modernizing national regulatory frameworks, fostering mutual recognition agreements for professional services, and leveraging international technical and financial assistance to overcome institutional capacity gaps. The findings emphasize that coherent policy frameworks and robust institutional readiness are fundamental prerequisites for enabling developing countries to harness the full potential of environmental services, thereby supporting their broader green growth and Sustainable Development Goals (SDGs) ambitions. This research contributes valuable insights into the emerging nexus of trade, environment, and development, providing actionable guidance for policymakers, international organizations, and stakeholders committed to promoting sustainable trade in environmental services across the Global South.