Environmental goods are typically non-market goods, including clean

air An atmosphere () is a layer of gases that envelop an astronomical object, held in place by the gravity of the object. A planet retains an atmosphere when the gravity is great and the temperature of the atmosphere is low. A stellar atmosph ...

, clean

water Water is an inorganic compound with the chemical formula . It is a transparent, tasteless, odorless, and Color of water, nearly colorless chemical substance. It is the main constituent of Earth's hydrosphere and the fluids of all known liv ...

landscape A landscape is the visible features of an area of land, its landforms, and how they integrate with natural or human-made features, often considered in terms of their aesthetic appeal.''New Oxford American Dictionary''. A landscape includes th ...

, green transport infrastructure (

footpaths A footpath (also pedestrian way, walking trail, nature trail) is a type of thoroughfare that is intended for use only by pedestrians and not other forms of traffic such as motorized vehicles, bicycles and horses. They can be found in a wide ...

, cycleways, greenways, etc.),

public park An urban park or metropolitan park, also known as a city park, municipal park (North America), public park, public open space, or municipal gardens (United Kingdom, UK), is a park or botanical garden in cities, densely populated suburbia and oth ...

s, urban parks,

river A river is a natural stream of fresh water that flows on land or inside Subterranean river, caves towards another body of water at a lower elevation, such as an ocean, lake, or another river. A river may run dry before reaching the end of ...

mountain A mountain is an elevated portion of the Earth's crust, generally with steep sides that show significant exposed bedrock. Although definitions vary, a mountain may differ from a plateau in having a limited summit area, and is usually higher t ...

forest A forest is an ecosystem characterized by a dense ecological community, community of trees. Hundreds of definitions of forest are used throughout the world, incorporating factors such as tree density, tree height, land use, legal standing, ...

s, and

beach A beach is a landform alongside a body of water which consists of loose particles. The particles composing a beach are typically made from Rock (geology), rock, such as sand, gravel, shingle beach, shingle, pebbles, etc., or biological s ...

es. Environmental goods are a sub-category of

public goods In economics, a public good (also referred to as a social good or collective good)Oakland, W. H. (1987). Theory of public goods. In Handbook of public economics (Vol. 2, pp. 485–535). Elsevier. is a goods, commodity, product or service that ...

. Concerns with environmental goods focus on the effects that the exploitation of ecological systems have on the economy, the well-being of humans and other species, and on the environment. Users not having to pay an upfront cost and external factors like pollution that can damage environmental goods indefinitely are some of the challenges in protecting environmental goods.

Valuation

There have been many efforts to place an economic value on environmental goods, but no consensus yet exists on the method of valuation. The challenges in the way of obtaining these economic values include the

free-rider problem In economics, the free-rider problem is a type of market failure that occurs when those who benefit from resources, public goods and common pool resources do not pay for them or under-pay. Free riders may overuse common pool resources by not ...

, difficulties in assigning ownership, and the non-divisibility of environmental goods.

Methods

Assigning a

willingness to pay In behavioral economics, willingness to pay (WTP) is the maximum price at or below which a consumer will definitely buy one unit of a product. This corresponds to the standard economic view of a consumer reservation price. Some researchers, ho ...

to environmental goods is one method that economists use to try to assess their value. Small scale simulated markets have been used in conjunction with contingent valuation methods in order to assess the relative values of economic goods, as well as an attempt to assign them dollar values. Other studies criticize these methods for expecting an unrealistic amount of mental effort on the part of the subjects who are asked to assign values, as well as for introducing framing effects and inherent biases relating to subjects' perceptions of dollar values.

Measures of economic progress

Alternative measures of economic progress, including the Genuine Progress Indicator,

Gross National Happiness Gross National Happiness, (GNH; ) sometimes called Gross Domestic Happiness (GDH), is a philosophy that guides the government of Bhutan. It includes an index used to measure a population's collective happiness and well-being. The Gross National Ha ...

, and

Gross National Well-being Gross National Well-being (GNW), also known as Gross National Wellness, is a socioeconomic development and measurement framework. The GNW Index consists of seven dimensions: economic, environmental, physical, mental, work, social, and political. M ...

factor living environmental wellness, ecological vitality, and the effects of

resource depletion Resource depletion occurs when a natural resource is consumed faster than it can be replenished. The value of a resource depends on its availability in nature and the cost of extracting it. By the law of supply and demand, the Scarcity, scarcer ...

and long-term environmental damage into their models. These metrics aim to categorize not only the economical and monetary values of environmental goods and services, but also their effects on the emotional and psychological well-being of individuals within a society.

Trade definition

In trade documents released by the United States, "environmental good" primarily refers to goods that are used for preserving the environment, such as renewable energy technologies and pollution management systems. In 2015, the U.S. exported $238 billion of environmental goods, while trading among nations globally of environmental goods totaled around $1 trillion. The United States and the

World Trade Organization The World Trade Organization (WTO) is an intergovernmental organization headquartered in Geneva, Switzerland that regulates and facilitates international trade. Governments use the organization to establish, revise, and enforce the rules that g ...

(WTO) and aims to lower tariffs on environmental goods in hopes of increasing the United States' access to more sustainable technology.

Environmental Goods Agreement

Since 2015, delegates from 18 members of the WTO, including the

European Union The European Union (EU) is a supranational union, supranational political union, political and economic union of Member state of the European Union, member states that are Geography of the European Union, located primarily in Europe. The u ...

and its

member states A member state is a state that is a member of an international organization or of a federation or confederation. Since the World Trade Organization (WTO) and the International Monetary Fund (IMF) include some members that are not sovereign states ...

, have been negotiating the Environmental Goods Agreement in hopes of cutting tariffs on many environmental goods. Australia chairs the negotiations.

Department of Foreign Affairs and Trade The Department of Foreign Affairs and Trade (DFAT) is the department of the Australian government responsible for foreign policy and international relations, development aid (under the name Australian Aid), consular services, overseas trad ...

Environmental Goods Agreement (EGA)
accessed 9 June 2023 The negotiations aimed to increase the transfer of technologies which are cleaner for the environment and more cost competitive, including technologies in the realm of

air pollution Air pollution is the presence of substances in the Atmosphere of Earth, air that are harmful to humans, other living beings or the environment. Pollutants can be Gas, gases like Ground-level ozone, ozone or nitrogen oxides or small particles li ...

control, waste treatment,

renewable energy Renewable energy (also called green energy) is energy made from renewable resource, renewable natural resources that are replenished on a human lifetime, human timescale. The most widely used renewable energy types are solar energy, wind pow ...

, and

environmental monitoring Environmental monitoring is the processes and activities that are done to characterize and describe the state of the environment. It is used in the preparation of environmental impact assessments, and in many circumstances in which human activit ...

, and energy efficiency. The WTO hopes to provide higher-quality environmental goods at cheaper costs and to help developing countries to expedite the process of obtaining cleaner technologies. The agreement would also aim to lower costs of environmental protection, and to provide "green" jobs to people around the world. Talks collapsed in 2016,Reinsch, W. A., Benson, E. and Puga, C.
Environmental Goods Agreement: A New Frontier or an Old Stalemate?

Center for Strategic and International Studies The Center for Strategic and International Studies (CSIS) is an American think tank based in Washington, D.C. From its founding in 1962 until 1987, it was an affiliate of Georgetown University, initially named the Center for Strategic and Inte ...

, published 28 October 2021, accessed 9 June 2023 although the

Australian government The Australian Government, also known as the Commonwealth Government or simply as the federal government, is the national executive government of Australia, a federal parliamentary constitutional monarchy. The executive consists of the pr ...

notes that "a range of interested Members continue to examine issues and consider options for an eventual return to negotiations".

References

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