Environmental Goods and Services (EGS) are central to addressing the world’s most pressing sustainability and climate challenges. Yet despite their importance, there is no single, agreed definition of what EGS actually are. Different organisations, countries, and institutions use varying classifications, making trade and policy coordination complex.
Broadly speaking, environmental goods refer to physical products that are used to measure, prevent, limit, minimise, or correct environmental damage. These include items such as solar panels, air filters, wastewater treatment equipment, or energy-efficient appliances. Environmental services, meanwhile, refer to professional, technical, or operational services that support environmental protection and the sustainable use of natural resources — such as waste management, environmental consultancy, renewable energy engineering, and ecosystem restoration services.
EGS are often categorised under two main groups:
- Environmental Protection — goods and services that directly address environmental damage (e.g. pollution control equipment, water purification systems, environmental audits).
- Resource Management — those that help manage natural resources sustainably (e.g. forest management consulting, renewable energy deployment, irrigation efficiency tools).
Some definitions also include goods and services that enable climate change mitigation and adaptation, including technologies that support energy transitions, resilient infrastructure, or emissions monitoring.
Why Definitions Vary — and Why It Matters
One of the biggest challenges with EGS lies in how they are defined and classified. For example:
- The OECD and Eurostat use production- and purpose-based criteria, defining EGS as those created with the primary aim of serving environmental objectives.
- APEC (Asia-Pacific Economic Cooperation) created a specific list of 54 environmental goods to support tariff reduction — a political compromise rather than a scientific classification.
- In the WTO context, EGS discussions often rely on these external lists or national submissions, as no formal multilateral definition exists.
This definitional inconsistency affects everything from trade negotiations and tariff schedules, to development assistance and investment policy. If countries can't agree on what counts as an EGS, it's difficult to liberalise trade in them or to measure progress.
EGS at the Intersection of Trade and Sustainability
The trade in environmental goods and services plays a critical role in the global green transition. Access to EGS supports cleaner production, waste reduction, and sustainable resource use. It can also enable developing countries to leapfrog more polluting phases of industrialisation by adopting green technologies sooner.
EGS are linked to multiple international goals and frameworks, including:
- The UN Sustainable Development Goals (SDGs) — particularly SDG 7 (Affordable and Clean Energy), SDG 12 (Responsible Consumption and Production), and SDG 13 (Climate Action).
- Multilateral Environmental Agreements (MEAs), such as the Paris Agreement, which depend on the deployment of green goods and services to meet emissions targets.
- Trade and climate initiatives, like the ACCTS (Agreement on Climate Change, Trade and Sustainability), which aim to reduce trade barriers for EGS as part of global climate cooperation.
A Tool for Climate Action and Economic Development
Despite the definitional and political complexities, the core idea is simple: EGS help countries, businesses, and communities become more environmentally sustainable. Facilitating their production, trade, and use is vital for climate action, pollution control, and green growth.
But to do this effectively, stakeholders need better information, clearer policy frameworks, and stronger international cooperation — all of which EGSTradeHub.org seeks to support.
EGSTradeHub.org offers curated research, policy updates, and resources to help clarify what EGS are, how they’re traded, and why they matter.