When we think of environmental action, physical goods like solar panels or wind turbines often come to mind. But environmental services — the expertise, processes, and systems that support environmental protection — are equally critical. These services are the backbone of many green transitions, enabling countries, communities, and companies to implement environmental solutions effectively.
Yet despite their importance, environmental services are under-recognised in trade policy, hard to define, and frequently bundled into other service sectors in international classifications. This section explores what environmental services are, why they matter, and the key policy issues surrounding their trade.
What Are Environmental Services?
Environmental services generally refer to intangible activities that help prevent, reduce, or reverse environmental damage and promote sustainable use of natural resources. They are typically delivered by professionals, firms, or public institutions and can be categorised in a number of ways.
The OECD/Eurostat definition includes the following core types of services:
- Waste Management Services
- Wastewater Management
- Air Pollution Control
- Noise and Vibration Abatement
- Environmental Remediation and Cleanup
- Environmental Consulting and Auditing
- Resource Management Services
Some definitions also include supporting services such as green infrastructure design, renewable energy project development, and environmental education.
The WTO document W/120 lists Environmental Services (ES) under Sector 6. This sector includes sub-categories like:
- 6.A: Sewage Services
- 6.B: Refuse Disposal Services
- 6.C: Sanitation Services
- 6.D: Other Environmental Services (including exhaust gas cleaning, noise abatement, and nature/landscape protection)
The W/120 list serves as a reference for WTO members to list their specific commitments on services trade.
Why Environmental Services Matter
These services are essential for implementing environmental goals across sectors — from agriculture and industry to energy and urban planning. Without them:
- Infrastructure cannot meet environmental standards.
- Pollution cannot be properly measured or managed.
- Natural resources are used inefficiently or unsustainably.
In many cases, services are what make environmental goods effective. A solar panel must be installed, maintained, and integrated into an energy system. A water treatment plant is useless without skilled operators and technical advisors.
Environmental services enable:
- Compliance with national and international regulations
- Access to financing for green projects
- Knowledge transfer and capacity-building
Environmental Services in Trade Agreements
Environmental services are traded across borders, especially through:
- Mode 1 (cross-border supply)
- Mode 2 (consumption abroad)
- Mode 3 (commercial presence)
- Mode 4 (movement of natural persons)
However, they are poorly represented in current trade rules. In the WTO’s General Agreement on Trade in Services (GATS), they are often bundled into broader categories like “business services” or “construction,” making it hard to track or liberalise them specifically.
Recent trade agreements have attempted to address this through:
- Dedicated provisions for environmental services
- Mutual recognition of qualifications
- Transparency of domestic regulations
But progress remains limited, and barriers such as licensing restrictions, ownership rules, or lack of recognition of foreign certifications persist.
Data Gaps and Policy Implications
Environmental services are invisible in the data. Trade and employment statistics rarely isolate them, making it difficult to:
- Measure their economic value
- Track trade flows
- Design evidence-based policy
This invisibility contributes to underinvestment, lack of training, and limited policy attention — despite environmental services being a cornerstone of green development strategies.
Unlocking Their Potential
To better integrate environmental services into sustainable trade and development, policymakers and institutions can:
- Develop clearer classifications and definitions
- Support capacity-building and training
- Lower regulatory barriers
- Improve data collection
- Embed environmental services into climate and trade frameworks
EGSTradeHub.org explores how environmental services shape sustainability outcomes — and offers curated research and policy resources to support better trade in these vital sectors.