RESTRICTED  WORLD TRADE  
ORGANIZATION  S/C/W/320 
20 August 2010 
 (10-4409) 
Council for Trade in Services  
  
BACKGROUND NOTE ON ENVIRONMENTAL SERVICES 
 
Note by the Secretariat
1 
  1. This Note has been prepared at the request of  the Council for Trade in Services, with a view 
to stimulating discussions in the Council on the sect or of environmental services.  It provides 
background information and updates a previous Note  on Trade in Environmental Services (S/C/W/46, 
dated 6 July 1998).  This Note focuses on developments  and issues considered to be most relevant to 
the GATS.  It is not intended to prov ide a comprehensive account of the sector. 
_______________ 
 
 
I. INTRODUCTION 
2. Some environmental services are nearly as old as human societies:  evidence of organised 
sewage and waste management systems is found in ancient civilizations, such as the Indus Valley, China, Rome, Greece, Egypt, Mesopotamia, and pre-Colu mbian America, to name a few.  Despite this 
long history and their key role in society, the importance of environmental services is largely 
underestimated and, as compared to other service  sectors of comparative size, surprisingly little 
literature has been devoted to them.  Even importa nt services, such as waste management, have been 
subject to limited study.  "Rubbish may be universal , but it is little studied and poorly understood".
2  
This statement could apply to envi ronmental services in general.   
3. This Note will first discuss the general patte rns and trends of environmental services markets 
(Section II).  Section III will describe the characterist ics of the main environmental services segments, 
i.e. solid and hazardous waste services, water ser vices, sanitation services, air pollution abatement 
services, noise abatement services, remediation services, and nature & landscape protection services (Section III).  Definition and classification issues in the WTO and in other systems will be dealt with in Section IV.  Section V will address the app lication of the GATS to environmental services, 
including the relevance of the four modes of supply and the pattern of current GATS specific 
commitments.  Finally, Section VI will brie fly review environmental services commitments under 
preferential trade agreements. 
II. GENERAL PATTERNS AND TRENDS OF ENVIRONMENTAL SERVICES 
MARKETS 
4. The first challenge with environmental services is to define them.  As many services can have 
an environmental end-use, it is difficult to draw the line between "environmental services" per se  and 
other services coming into play for the protection of the environment in a broad sense.  National and international definitions and classification systems differ, and do not coincide with the Sectoral 
                                                     
 
1 This document has been prepared under the Secret ariat's own responsibility and without prejudice to 
the positions of Members and to their rights and obligations under the WTO. 
2 "Talking Rubbish – A Special Report on Waste", The Economist , 28 February 2009. S/C/W/320 
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  Classification List (MTN.GNS/W/120, 10 July 1991, hereinafter "W/120") and the CPC prov. (United 
Nations Central Product Classification, version "p rovisional", 1991, hereinafter the "CPC"), both 
instruments which are widely used for scheduling purposes unde r the GATS.  Researchers writing 
about "environmental services" and business reports of ten ascribe different contents to the concept.  
For instance, some identify environmental engineer ing and environmental analysis and testing as 
distinct environmental services, while these a ppear under, respectively, professional and other 
business services in W/120.  Also, a number of publications view water treatment and distribution as an environmental service, while W/120 does not contain a reference to these services. 
5. Environmental services can be divided into two broa d categories.  In the first – and, for a long 
time, most common – use of the term, it refers to services such as waste water treatment, refuse 
collection and disposal, or street cleaning, which ar e typically provided by public authorities to local 
communities.  The provision of these services, al so dubbed infrastructure environmental services, 
normally entails important capital costs (constructi on and maintenance of a pipe network for waste 
water treatment, for instance), which may give ri se to natural monopolies.  Services like street 
cleaning have the characteristics of public goods
3, which means that private suppliers do not have a 
sufficient incentive to provide them .  Moreover, these services entail important social, public health 
and environmental policy dimensions.  These differe nt features explain why public authorities tend to 
be the main suppliers and private companies operate  mainly through delegation of tasks or following 
divestiture of assets.  Structural reform programm es, which entail social and political dimensions, are 
not without controversy.  Liberalization of m onopolistic-type industries normally requires a strong 
regulatory framework and ongoing surveillance in orde r to ensure consumer protection and the quality 
of the service.     
6. The second category of environmental servi ces emerged in the wake of the first 
environmental policy initiatives implemented in developed countries in the 60s and 70s, and 
responded to new requirements regarding air polluti on prevention and mitigation, noise abatement and 
remediation of polluted sites, amongst others.  These services – also referred to as "non-infrastructure" 
environmental services – are supplied primarily on a business-to-business basis as the main clients are 
private firms needing to comply with environmen tal regulation.  Non-infrastructure environmental 
services do not raise the same level of concerns as infrastructure environmental services when it 
comes to liberalization and are, in fact, already provided mostly on a competitive basis.   
7. Environmental services are often supplied in conjunction with environmental goods and tend 
to represent the predominant element in th e package (about 65 per cent in value terms4), although 
there may be sectoral variations.  The precise size of the environmental services market is difficult to 
assess with precision because of the scarcity of data and lack of common definitions.5  Available 
figures tend to indicate that it is significant.  According to one author, the global revenues for the environmental goods and services industry amounted to  US$653 billion in 2005 and are expected to 
reach US$776 billion in 2010, making it comparable in size to the aerospace and pharmaceutical 
sectors (Sinclair-Desgagné, 2008).
6  According to other estimates, the global environmental goods and 
services sector is expected to amount to some US$800 billion by 2015 (Selwyn & Leverett, 2006). 
                                                      
3 A public good can be defined as an "[i]tem whose consumption is not decided by the individual 
consumer but by the society as a whole, and which is financed by taxation. A public good (or service) may be 
consumed without reducing the amount available for others, and cannot be withheld from who do not pay for it."  
See http://www.businessdictionary.com/ , consulted on 12 July 2010. 
4 OECD, 2005. 
5 Available estimates tend to be based on definitions which are broader than the classification of 
environmental services proposed in W/120. 
6 This author uses 2006 figures from Environment Business International , whose definition of 
environmental services does not entirely coincide with definitions commonly used by WTO Members.  S/C/W/320 
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  8. Solid waste management represents the most si gnificant market segment, followed by water 
treatment.  Other important sectors include hazardous  waste management, consulting and engineering, 
site remediation and engineering.  In 2006, the global market size for the main segments of the 
environmental services industry (in US$ billion) was estimated to amount to: 
Solid waste management   120.7  
Water treatment    78.6 
Consulting and engineering  31.5 
Site remediation    29.4 
Hazardous waste management  17.8 
Analyses    3.8 
 
  Source :  Sinclair-Desgagné, 2008, based on figures from Environmental Business International  
 
9. The demand for environmental goods and services is linked to income levels.7  N o t  
surprisingly, then, developed countries, which harbour the top 50 environmental companies, are the main consumers and suppliers of environmental services (OECD, 2005) .  In 2002, the United States, 
the EU and Japan accounted for about 85 per cent of the market and were the leading exporters of 
environmental services, representing together about 90 per cent of total exports (OECD, 2005).  
Developed country markets are now considered to be  mature and growth is modest (about 4 per cent 
per year), but they are expected to continue to  dominate exports of environmental services in the 
future (Dihel, 2010).   
10. The environmental sector in developing a nd transition economies represented about 14 per 
cent of the global industry in 2006
8, and these countries are net importers of environmental services;  
some of them have started to export, mainly on a regional basis, and their greatest export niches 
appear to be in environmental engineering, t esting and analysis, resear ch and development and 
consultancy (Dihel, 2010).  Environmental goods an d services markets are experiencing significant 
growth in developing countries.  A 2005 OECD co untry study of 17 markets, mostly developing 
countries, quantifies annual growth at between 8 per cent to 12 per cent for 2000-2010.9  The study 
indicates a "significant shift in the structure of countries' [environmental goods and services] 
industries, from traditional end-of-pipe activities to  the use of cleaner technologies that reduce 
pollutants at the source" (Kennett & Steenblik, 2005 ).  Evidence from this study, which focused on 
water supply and waste water treatment, solid an d hazardous waste management and air pollution 
control, further shows that, while public authoriti es remain largely responsi ble for delivering these 
services, reform programmes have created a larger role  for the private sector in these different areas, 
in particular in the field of solid and hazardous  waste management.  Moreover, demand from the 
private sector is expected to grow, especially  for services such as wastewater treatment, 
solid/hazardous waste management, and e nvironmental testing and consulting.10     
                                                      
7 "A substantial body of research has established that the demand for environmental goods and services 
is disproportionately greater in high-income countries than in middle- and low-income countries.  ... Much of the existing demand for environmental services in middle-  and low-income countries is concentrated in basic 
services such as water and wast ewater treatment" (USITC, 2004). 
8 The author is of the view that statistical repor ting problems in developing countries contribute to 
explaining this low figure. 
9 The country studies were prepared by consultants to the OECD, UNCTAD and UNDP, and included 
Brazil, Chile, China, Cuba, Czech Re public, Dominican Republic, Guatemal a, Honduras, Indonesia, Israel, 
Kenya, Korea, Mexico, Nicaragua, Panama, Pakistan, Thailand, and Viet Nam.   
10 For instance, three major factors are considered to be at the origin of the increasing industrial 
demand for environmental services in India during the 1990s, i.e. enhanced domestic environmental regulations and government initiatives, rising interest in environmental attributes in products and processes by importers 
(e.g. ISO 14001 certification) and civil society pressure as well as environmental legal activism (ICRIER, 2004). S/C/W/320 
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  11. The structure of the sector is very diverse and ranges from large multinational companies to 
specialized small firms.  Infrastructure environmen tal services, which require large-scale investment, 
tend to be dominated by a few large multinational co mpanies, most of them from developed countries, 
which provide a range of integrated products a nd services;  moreover, they often expand their 
activities to related areas (waste, water, energy and transport).  Nevertheless, small and medium-sized 
enterprises represent an important share of the envi ronmental goods and services market, especially in 
non-infrastructure environmental services (e.g., ai r and noise pollution abatement services, and 
environmental consulting).  Environmental servi ce suppliers emerging in developing countries 
typically belong to this second category, as "[t]he co mbination of skills required of an international 
player in environmental services makes it very di fficult for entities in develo ping nations to compete 
initially (Ferrier, 2003).  This same author notes, however, that "... potential does exist for developing 
nations' environmental companies to form partnershi ps with experienced inte rnational environmental 
industry competitors and then seek involvement in neighbouring countries.  Likewise, some 
opportunities will be available for small companies to execute specific pieces of projects or to work in 
smaller market niches (air quality monitoring, envi ronmental information systems, industrial water 
recycling) that are numerous in the environmen tal industry".  Along the same lines, a study on 
environmental services in Asia notes that "Asian environmental firms work together with the large 
multinational service providers in joint-ventures and al so as sub-contractors for regional projects.  ...  
Sub-contracts as well as joint-ventures help indi genous firms to upgrade operations and learn from 
larger and more experienced inte rnational firms" (Sawhney, 2007). 
12. The environmental services sector has undergone significant changes over the last 20 years.  
Industrialization, urbanization a nd demographic growth, but also consumer pressures for cleaner 
products, have contributed to increasing the dema nd for environmental goods and services.  Many 
new products have appeared, beyond the traditional infrastructure services.  Global environmental challenges, like climate change, and increasing need s in developing countries are fostering demand 
for new services.  All experts concur that envir onmental goods and services markets will continue to 
grow in the years to come.     
III. MAIN FEATURES OF ENVIRONMENTAL SERVICES MARKETS
11 
A. SOLID AND HAZARDOUS WASTE SERVICES  
13. Waste management includes the collection, tr ansport, treatment, recycling, storage and 
disposal of solid and hazardous waste.12  Solid waste  refers to non-hazardous waste, e.g. discarded 
food and packaging generated by households, as we ll as institutional, co mmercial and industrial 
establishments.  Other sources of non-hazardous waste include agriculture, construction and 
demolition, mines, quarries and energy generation plants (USITC, 2004).  Hazardous waste  refers to 
"solid, liquid, or gaseous by-product of industria l processes that possesses at least one of the four 
characteristics:  (1) corrosiveness, (2) ignitability, (3) reactivity, (4) toxicity;  and which may have to 
be handled, stored, transported, and disposed of in a controlled manner".13  The precise definition 
differs from country to country.  It generally includes waste resulting fro m certain manufacturing 
processes (e.g. petrochemical and pharmaceutical in dustries) and other establishments dealing with 
dangerous substances, such as hos pitals and clinics, and nuclear  power plants.  Procedures and 
                                                      
11 The choice and description of environmental service s ectors in this Section reflects the main trends in 
relevant academic and business publications.  It is not meant to prejudge Members' discussions on classification under the GATS. 
12 The CPC prov. does not make a distinction between so lid and hazardous waste.  The latest version of 
the CPC (Version 2, completed on 31 December 2008, hereinafter "CPC 2"), has introduced a distinction 
between various categories of waste. 
13 This definition is from http://www.businessdictionary.com/   S/C/W/320 
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  methods for collecting, treating and disposing of solid waste, on the one hand, and hazardous waste, 
on the other, are different (USITC, 2004).   
14. Solid waste is the by-product of consumption,  hence, there is a link between per capita 
income and the amount and composition of waste produced.  Developed countries produce more waste than developing countries;  moreover, organic waste tends to prevail in the latter, while the 
former generate more inorganic waste (discarded ma nufactured goods).  At the same time, developed 
countries manage a larger share of their solid wast e than developing countries;  recycling rates also 
tend to increase with waste generation rates (USITC, 2004).  It is estimated that about half of the 
urban population in develo ping countries lacks adequate waste dis posal and that less than 10 per cent 
of urban waste is treated, with only a smaller shar e meeting acceptable standards (Zarrilli, 2003).  For 
instance, more than 60 per cent of municipal waste in India, Indonesia, the Philippines and Viet Nam 
is openly dumped, and about 50 per cent in China and Malaysia (Sawhney, 2007).  There does not appear to exist the same correlation between inco me levels and generation of hazardous waste, as 
some developing countries are among the largest gene rators;  however, deve loped countries tend to 
manage a higher share of such wastes (USITC, 2004). 
15. The public sector, which is responsible for the ma nagement of municipal waste, is the main 
customer for solid waste services, and public-sector  providers still play an important role in the 
provision of such services.  Solid waste manageme nt offers various opportunities for private sector 
involvement and is less politicised than other envi ronmental service sectors.  While no country has 
fully privatised solid waste management, in sever al countries public authorities have started to 
outsource these services to private companies,  including in developing countries (Kennett & 
Steenblik, 2005;  The Economist, 2009).  Involvemen t of the private sector in waste management can 
take various contractual forms, including services,  management or lease, build-own-operate, build-
operate-transfer, or concession contracts (see A ppendix 1).  Private customers, such as commercial 
and industrial establishments, represent an important part of the solid waste services market.  In a 
number of developed and developi ng countries, private suppliers of waste management services 
collect and dispose of waste generated from commer cial establishments such as restaurants, food 
retailers and shopping centres.  Some countries, fo r example the United States, also allow private 
companies to provide services directly to households (Steenblik, Drouet, Stubbs, 2005).  Private industry, in particular chemical firms and oil re finers, is the main consumer of hazardous waste 
services. 
16. The main markets for solid and hazardous wast e services are in the United States (34 per 
cent), Europe (31 per cent) and Japan (26 per cent)  (USITC, 2004).  The demand for waste services is 
expected to increase in developed countries, and ev en more so in developing countries, as a result of 
economic development and growing urban populations.  For instance, until 2030, municipal waste is 
expected to grow by about 38 per cent in develope d countries;  during the same period, Indian cities 
will generate 130 per cent more waste and China's 200 per cent.  Some experts predict that, overall, 
worldwide waste will double by 2030.  Moreover, concer ns related to global warming are expected to 
further spur the waste industry (recovering methan e from landfills, improving recycling targets, and 
multiplying waste-to-energy projects) (The Economist, 2009). 
17. The waste sector is composed of specialized small and medium-size enterprises, coexisting 
with a few large firms (Sinclair-Desgagné, 2008).  The latter include mainly US and EU companies, such as Veolia Environmental Services (France), Sita (France), Waste Management Inc. (US) and 
Allied Waste (US) (USITC, 2004).  There are economies of scale in the sector, for instance between 
landfilling and incineration, and proba bly related to the operation of a transportation network (USITC, 
2004).  This explains why the industry has experien ced a series of mergers and acquisitions as firms 
try to diversify their activities and increase their market share.    S/C/W/320 
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  B. W
ATER SERVICES  
18. Water services include the supply of wate r for consumption and the treatment of 
wastewater.14  Water supply involves the capture of the resource, its treatment to reach a determined 
level of quality, transportation through a primary ne twork (aqueducts or mains)  and delivery to users 
through the secondary network (pipelines and taps) (Kessides, 2004).  Wastewater services entail the 
removal of sewage through pipes and drains and treatment with various techniques (chemical, 
physical or biological) with the objective of rem oving contaminants and making water available for 
reuse or release into the environment. 
19. In 2000, the Millenium Development Goals (M DG) programme called on countries to halve, 
by 2015, the proportion of people without sustainable access to safe drinking water and basic 
sanitation.  According to the latest estimates, a bout 2.6 billion people (i.e. 39 per cent of the world's 
population) do not have access to improved sanitation15, mostly in Asia and sub-Saharan Africa.  
WHO/UNICEF indicates that, at the current rate of progress, the world will miss the MDG target and, by 2015, there will be 2.7 billion people without access to basic sanitation.  Even if the MDG target 
were to be reached, there would still be 1. 7 billion people without access to these services.  
Concerning water supply, some 884 million people do not currently have access to improved sources 
of drinking water, but, at the current rate of progr ess, the world is expected to exceed the MDG target 
of halving the proportion of people without sustai nable access to drinking water.  Even so, 672 
million people will still lack access to improved drinking-water sources in 2015.  (WHO/UNICEF, 2010) 
20. Water services provided to local communities requi re important infrastructure work, most of 
it having to be laid underground.  This means that  the water sector is characterized by large fixed 
costs (up to 80 per cent of water supply costs;  Ke ssides, 2004) and that it is often uneconomical to 
duplicate networks.  Moreover, services are provide d over a small geographic area because the costs 
of transporting water or sewage are extremely high.  The scope for introducing competition being 
more limited for water than for other infrastructure sectors, water systems are generally considered to 
be natural monopolies and are operated primarily by  local public authorities, such as municipalities.  
More than 90 per cent of all water utilities are currently  run by public entities, either at the national or 
local level (UNCTAD, 2008).   
21. The tendency towards privatization in the water sector has been more limited than in other 
infrastructure sectors, with private companies repr esenting about 10 per cent of the market.  There 
may be significant regional differences, though ( UNCTAD, 2008;  UN-Habitat, 2003).  Involvement 
of the private sector can take several forms.  Full divestiture of assets is uncommon in the water 
sector.  Normally, the public sector retains ownershi p of infrastructure and involves the private sector 
through various contractual arrangements (Cossy, 2005).  Tasks entrusted to private operators can 
range from specific activities, such as collecting user  charges or carrying out determined maintenance 
functions on the facility, to complete control over  operations, maintenance and development of the 
                                                     
 
14 There are various views as to where water supply services should be classi fied.  The environmental 
services category of the CPC prov. refers only to sewage services and adds that "collection, purification and 
distribution services of water are classified in subclass 18000 (Natural water)", the latter belonging to the goods 
section of the CPC.  The latest version of the CPC (CPC 2) has included "water distribution services" under Section 8 ("Business and production serv ices").  In classification discussi ons which took place in the Committee 
on Specific Commitments, a proposal to list water collect ion, purification and distribution under environmental 
services was opposed by several Members (see Section IV).  On the other hand, relevant publications on environmental services tend to address both water su pply and wastewater services, and references to water 
supply as an environmental service are found in seve ral preferential trade agreem ents (see Section VI). 
15 An improved sanitation facility is one that hygienically separates human excreta from human 
contact.  An improved drinking water source is one that, by the nature of its construction, adequately protects 
the source from outside contamination, in par ticular with faecal matter (WHO/UNICEF, 2010).  S/C/W/320 
 Page 7 
 
 
  facility (see Appendix 1).  In this context, various forms of "public-private partnerships" (PPPs) have 
emerged as tools to finance the rehabilitation or de velopment of public facilities.  Through a bidding 
process, PPPs introduce a form of competition for  the market, for want of competition in  the market.   
22. Important social, public health a nd environmental concerns arising in a sector prone to natural 
monopolies mean that there is a strong case for tight governmental regulation and control.  This also 
means that private sector involvement in the supply of infrastructure services may change the role of 
the public sector, but cannot be equated with its w ithdrawal.  To the contrary.  As put by the UN 
Economic Commission for Europe, "PPPs demand a str ong public sector, which is able to adopt a new 
role with new abilities. ... asking private partners to  deliver government services places more, not less, 
responsibility on public officials" (UNECE, 2008). 
23. According to an OECD study, total public-pri vate partnership investments in the water and 
sewerage sector in eleven OECD and BRIC countries16 amounted to US$11.2 billion between 1990 
and 2004 (OECD, 2007).  The same study indicates that, in developing countries, the water sector represents about 5 per cent of investment made by  private companies in infrastructure utilities (as 
compared, for instance, to 44 per cent for teleco m and 28 per cent for power).  UNCTAD gives the 
following estimates for investment needed in S ub-Saharan Africa in the water supply and sewage 
sector for the period 2006-2015 (in US$ billion): 
Item Water  
(excluding investment needed 
for irrigation) Sewage 
New investment 1.8 2.7 
Operation & 
maintenance 1.4 2.1 
Total 3.2 4.8 
 
    Source :  UNCTAD, 2008 
 
24. Private investment in the water and sewerage sector remains limited as compared to other 
sectors.  For instance, the World Bank reports that 35  projects involving private participation in water 
and sewerage reached closure in 2009, with investme nt estimated at US$2 billion.  During the same 
period, private investment in energy reached US$57.4 billion for 137 new projects (World Bank, 2010). 
25. Besides local communities, private business is also  an important consumer of water services, 
in particular sewage services.  Large industrial f acilities (e.g., manufacturing industries such as paper, 
chemical, and mining processing plants) are often no t allowed to connect to public sewage networks, 
or decide not to, and have their own wastewater treatment facilities.  The nature of the pollutants 
released by industrial processes may require the use of  very specific technologies to treat the water.  
Hence, many industries choose to outsource these t asks to specialised providers.  For instance, a 
Korean producer of semi-conductors contracted out wa ter and waste water treatm ent to a subsidiary of 
the French firm Veolia Environment.  Pursuant to  the contract, the provider had to supply ultra-pure 
water necessary for the production of semi-conductors , to treat and recycle waste water coming out of 
the plant (Steenblik, Drouet, Stubbs, 2005). 
                                                     
 
16 The countries under consideration were:  C zech Republic, Hungary, Mexico, Poland, Slovak 
Republic, Turkey, Brazil, Russian Federation, India, China, Indonesia. S/C/W/320 
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  26. An UNCTAD survey indicates th at competitive advantages in the water sector are "mostly 
intangible and difficult to develop and sustain", whic h explains why "nearly all TNCs in this industry 
with significant international i nvestments ... are long-established co mpanies (some were founded in 
the nineteen century), and continue to invest considerable amounts in specialist technology and 
network expertise" (UNCTAD, 2008).  The water sect or is dominated by a few very large firms, 
mainly European:  Veolia (France), Agbar (Spa in), Suez (France), and RWE (Germany).  These 
companies are often active in the energy (gas and electricity) and/or transport sectors as well.  
Companies from developing countries are fewer and smaller;  Hyflux (Singapore) and YTL 
(Malaysia) are among the most important ones. 
C. S
ANITATION SERVICES  
27. "Sanitation", taken in a broad sense, is often assimilated to waste and/or wastewater 
management and other activities aiming at maintainin g a clean environment.  The CPC takes a more 
narrow view and defines sanitation services as "[o] ther sanitation and similar services including 
outdoor sweeping services and snow- and ice-clearing services".  The "other" must indicate that the CPC views sanitation services as residual to sewage and waste treatment;  in relevant literature, 
sanitation services is often used to refer to sewage services or waste management.  The CPC 2 
expands the definition by adding activities such as gritting and salting of roads, runway sweeping and 
snow removal services, and runway vacuuming ser vices.  Under "other sanitation services", the 
CPC 2 includes beach cleaning services and drain unblocking services.   
28. Public authorities, in particular municipaliti es, are the main providers and consumers of 
sanitation services.  However, private customers, su ch as residential communities, operators of large 
hotels and resorts, shopping centres and factory sites may also purchase sanitation services.  Sweeping 
and cleaning services that can be done with the use of small equipment is often performed by firms 
providing solid-waste management services.  Firms specialized in other road-related services supply sanitation services requiring larger, mechanised equipment (Steenblik, Drouet, Stubbs, 2005). 
D. A
IR POLLUTION CONTROL  
29. Industrial activities (stationary sources) and moto rized traffic (mobile sources) are responsible 
for the release of various pollutants into th e atmosphere, e.g., greenhouse gases, carbon monoxide, 
ozone, lead, etc.  Such emissions represent a pub lic health hazard as they cause various human 
diseases, in particular respiratory problems.  Seve ral of these pollutants have been identified as being 
also responsible for more global environmental pr oblems, including acid rain, depletion of the ozone 
layer and global warming.  Stationary sources  include electricity generato rs and other large industrial 
facilities, such as chemical and pharmaceutical indus tries, oil refining, pulp and paper manufacturing 
firms, waste incinerators and cement plants.  Pollution from mobile sources  comes mainly from 
combustion engine vehicles.  Various techniques and devices are used to sample, measure and analyse emissions from stationary and mobile sources.  Air pollution control also includes monitoring of 
outdoor and indoor air quality, i.e. detecting the presence of certain contaminants in ambient air 
(ozone, particulate matters, car bon monoxide, sulphur dioxide) or in buildings (mold, radon, 
asbestos). 
30. The relevant sector in the CPC prov. is "cleaning services of exhaust gases", which is defined 
as "emission monitoring and control services of po llutants 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 ai r, especially in urban areas".  The definition 
proposed by the OECD/Eurostat appears to be broa der in terms of sources of pollution as it includes 
"any activity that designs, manages systems or provides other services for the treatment or removal of exhaust gases and particulate matter from both sta tionary and mobile sources" (OECD/Eurostat, 
1999).    S/C/W/320 
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  31. The demand for air pollution control and abatem ent is spurred by national legislation and 
international environmental treaties, such as the UNECE Convention on Long-Range Transboundary 
Air Pollution, the Montreal Protocol on Substan ces That Deplete the Ozone Layer, and the UN 
Convention on Climate Change and the Kyoto Protocol.   
32. Air pollution abatement goods and services are often provided as a package, with the former 
accounting for the majority of the value of the sale.   Moreover, they generally require consulting, 
engineering, construction, insta llation and/or monitoring services in order to tailor the equipment to 
each customer's specific needs (USITC, 2005).  Statio nary emitters of air contaminants which need to 
comply with governmental standards are the main  private customers of air pollution abatement 
services.  Public authorities are the main purch asers of emission monitoring services from mobile 
sources, as well as monitoring of ambient air quality (Steenblik, Drouet, Stubbs, 2005).     
33. According to USITC, the air pollution sector is generally organised on a competitive basis.  It 
is composed of hundreds of small firms which are specialized in a narrow range of goods and 
services, and a few large firms, coming mainly fr om the United States, Europe and Japan, which 
supply worldwide a wide choice of equipment and technologies with related services.  The world 
market for air pollution abatement services has increased in recent years:  it registered an annual 
growth rate of about 6 per cent during the peri od 1994-2004 and reached an estimated US$2.4 billion 
in 2004 (US$49.4 billion for air pollu tion abatement goods).  The same year, total world exports of air 
pollution abatement services were estimated to ha ve reached US$430 million;  the main exporters 
were the United States followed by Japan and the EU .  The leading importers were China, the United 
States and the EU.  The largest markets of air pollution abatement goods and services are the United 
States (28 per cent), the EU (18 per cent), China (1 5 per cent), Japan (6 per cent), Canada and Korea 
(3 per cent each), and Brazil, India and Chinese Taip ei (2 per cent each).  The most rapidly growing 
markets for air pollution goods and services are in As ia, in particular China, India, Korea, and 
Chinese Taipei (USITC, 2005). 
E. NOISE ABATEMENT SERVICES  
34. There are many sources of noise in modern society which can impair people's health and 
quality of life in their private or occupational liv es.  According to the WHO, "[e]xcessive noise 
seriously harms human health and interferes with people’s daily activities at school, at work, at home 
and during leisure time. It can disturb sleep, cau se cardiovascular and psychophysiological effects, 
reduce performance and provoke annoyance res ponses and changes in social behaviour".17  T h e  
identification of noise pollution as a public health and environmental problem (noise can also impact 
negatively on fauna) is relatively recent, but awaren ess is growing and governments are expected to 
take appropriate measures to reduce noise levels (U SITC, 2005).  Motorized tra ffic (aircrafts, trucks, 
cars), construction and industrial activities are among the main sources of noise pollution which affect 
people's daily life ("community noise").  The noise created by industrial machinery and processes can 
affect people in the workplace ("occupational noise") and is addressed in labour law.   
35. The CPC prov. contains an entry for "noise abatement services" which are defined as "noise 
pollution monitoring, control and ab atement services, e.g. traffic-related noise abatement services in 
urban areas".  In the classification discussion on environmental services, some Members proposed to add vibration abatement services, presumably because vibrations are often associated with noise. 
36. Noise abatement services are difficult to describ e as a uniform sector as each source of noise 
calls for a different abatement method.  Servi ces related to noise abatement include consulting, 
construction and engineering.  In terms of more specific services,  USITC lists:  sound and vibration 
                                                     
 
17 See World Health Organization, at http://www.euro.who.int/en/what-we-do/health-
topics/environmental-health/noise . S/C/W/320 
Page 10  
 
  testing;  noise profiles, assessments, evaluations and monitoring;  modelling of noise from vehicles, 
aircraft, and stationary sources;  planning and desi gn of noise barriers and enclosures, and technical 
support for litigation, environmental impact assessments, or public policy (USITC, 2005). 
37. Noise abatement services are provided mainly by  small engineering and consulting firms.  
Public laboratories and agencies also supply servi ces such as noise monitoring and testing, research 
on noise abatement methods and technologies, as well  as education and training.  Consumers of noise 
abatement services include all entities, public or pr ivate, whose operations are responsible for noise 
emissions.  Trade data for noise abatement services appear to be even more scarce than for other 
environmental services sectors.  In its study on noise abatement services (the only one of which we 
have knowledge), USITC concludes that "[l]ittle is known regarding the market for noise pollution 
abatement services.  However, this market is likel y very small, as such pollution is often addressed 
through product standards and z oning restrictions.  ... many activities performed to abate noise 
pollution are classified outside of the noise po llution abatement sector, in industries such as 
engineering and consulting.  Likewise, trade in noi se pollution abatement services is likely very small, 
as the cross-border provision of some of these ser vices is reportedly unremunerative" (USITC, 2005). 
F. N
ATURE AND LANDSCAPE PROTECTION SERVICES  
38. According to the CPC prov., nature and landscape protection (NLP) services include 
"ecological system protection services, e.g. of lak es, coastlines, and coastal waters, dryland, etc., 
including their respective fauna, flora and habi tats.  Services consisting in studies on the 
interrelationship between environment and climate (e.g. greenhouse effect), including natural disaster 
assessment and abatement services.  Landscape prot ection services not elsewhere classified".  Note 
that this sub-sector has disappeared from the CPC 2. 
39.   NLP services include the following examples:  restoration of former mining sites after 
remediation, entailing restoration of biodiversit y and landscape, including seed and plant selection 
and propagation;  promotion of biodiversity on golf courses to, inter alia , reduce irrigation and 
fertilisers thanks to the use of native plant species;   the establishment of greenbelts, wetlands, or other 
open areas as part of a real estate development proj ect;  erosion prevention activities;  and services 
provided by private contractors to national parks, wildlife refuges or fisheries  (Steenblik, Drouet, 
Stubbs, 2005;  Geloso Grosso, 2007;  and USITC, 2004a ).  NLP services are also important in relation 
to the promotion of eco-tourism because they help to  maintain and protect natural sites of interest 
(protection of endangered species and of fragile eco-systems). 
40. NLP services are not easy to characterize as "a wide variety of laws and regulations pertain to 
the market, and there are few firms which special ize in the industry" (USITC, 2004a).  Relevant 
legislation relates to biodiversity protection (pro tection of endangered animal and plant species), 
erosion control, desertification and watershed ma nagement and restoration.  Moreover, various 
international environmental agreements may also  contribute to trigger a demand for nature and 
landscape protection services, for instance the C onvention on International Trade in Endangered 
Species (CITES), the Convention on Biological Di versity and the Convention on Wetlands of 
International Importance.  NLP services are "only occasionally marketed on a stand-alone basis", and 
are more often bundled with other environmental serv ices, such as remediation services, or real estate 
development services (USITC, 2004a). 
G. REMEDIATION SERVICES  
41. Human activities can deeply alter ecosystems a nd pollute soils and water bodies with waste 
and other dangerous substances, such as heavy meta ls, chemical compounds, gases and liquids.  These 
contaminants may cause grave public health and en vironmental problems, such as serious illnesses 
and loss of biodiversity.  Remediation refer to the cleaning up of soils, groundwater and surface water  S/C/W/320 
 Page 11 
 
 
  after they have been contaminated.  Other important segments of the industry concern the cleaning up 
of mines once exploitation has ended and of cont aminated buildings (removal of asbestos, for 
example). 
42. Remediation services are not identified as a dis tinct category in W/120 and the CPC prov., but 
some Members consider that they are covered under "nature and landscape protection services" 
(CPC 9406).  CPC 2 contains a sub-sector entitle d "remediation services", which are defined as 
"services dealing with the effects of contamination caused by operation of facilities or by accidents.  
These services aim to eliminate or contain any exis ting contamination of the soil, water or air and 
have to be performed on site" (CPC (2) 944).  This  category is divided into  various sub-categories 
which distinguish between remediation of air, surf ace water, and soil and groundwater, and buildings 
(see Appendix 2). 
43. The demand for remediation services is spurre d by environmental legislation requiring 
polluters to be liable for the environmental damage  they cause (the "polluter pays" principle).  In 
addition, land scarcity, especially in urban areas, pr ovides an incentive to turn former industrial sites 
into residential areas, and, thus, contributes to increase the need for remediation services.  
Liberalization of related sectors, such as civil engi neering or insurance services, facilitate the supply 
of remediation services in foreign markets (USITC, 2004a).  Remediation costs are financed partly by 
public authorities, for instance when it is not possible to identify the polluter.  Some State agencies, in 
particular in the military and energy fields, are im portant consumers of remediation services.  Also, in 
many countries, environmental regulation rega rding soil and water remediation obliges polluting 
companies to pay for the remediation costs.  Firms may also resort voluntarily to remediation services 
with the objective of preserving or improving their reputation. 
44. Remediation service suppliers are mainly, if not exclusively, private firms, but they do not 
form an homogenous group.  The sector is composed  of large firms performing remediation activities 
as part of a diversified portfolio including different  environmental services, and small firms which are 
specialized in very specific services.  Moreover,  some firms act only as consultants or project 
managers, but do not supply the remediation services th emselves.  USITC further notes that there is "a 
significant overlap between firms providing remediation and NLP [nature and landscape protection] activities and firms providing other environmental se rvices, such as water and wastewater treatment 
and solid and hazardous waste disposal, as well as n on-environmental services such as construction, 
civil engineering, real estate, and insurance services" (USITC, 2004a). 
45. Remediation activities started in the 1970's in the United States and in European countries as 
a result of demand triggered by the implementation of  environmental regulation.  This, in turn, has 
provided firms in these countries with an incentive to  develop relevant equipm ent and services.  These 
countries are currently the main markets and th e leading exporters of remediation services.  
Developing country markets are still limited, due mainly to lack of relevant legislation and to the fact 
that available resources are directed to more basi c environmental needs, such as sewage and waste 
treatment.  However, demand for remediation servi ces can be expected to increase as industrial 
development contributes to higher pollution levels a ffecting public health, especially in urban areas.  
(USITC, 2004a) 
46. The global market for remediation services was estimated at US$29.9 billion in 2002.  The 
main markets are the United States, the EU (US$7.9 billion in 2000) and Japan (US$4 billion in 2000).  Other important markets include Australia  (US$675 million in 2000), Canada (US$1.1 billion 
in 2001), China (US$40 million in 2000), Malays ia (US$34 million in 2001) and Mexico (US$300 
million in 2001).  The market for remediation services in developing countries (excluding the 
countries mentioned in the preceding sentence) amounted to an estimated US$3.3 billion in 2000.  
Firms exporting remediation services are mainly from  the United States and the EU.  Other countries 
export remediation services, mainly on a regional basi s;  however, specific data are not available.  S/C/W/320 
Page 12  
 
  Based on US firms' experience, it seems that the best export opportunities relate to environmental 
consulting (e.g. provision of services related to site  assessment and development of treatment plans) 
because, due to the cost and difficulty associated with shipping equipment abroad, local firms are 
more competitive when it comes to actually supplyi ng the remediation service.  (USITC, 2004a)   
IV. HOW ARE "ENVIRONMENTAL SERVICES" CLASSIFIED? 
A. E
NVIRONMENTAL AND ENVIRONMENT -RELATED SERVICES IN W/120 
1. Definition of environmental services 
47. Environmental services is the sixth sector lis ted in W/120 and is broken down in four sub-
sectors, as follows:   
A.  Sewage services CPC 9401 
B.  Refuse disposal services CPC 9402 
C.  Sanitation services CPC 9403 
D.  Other  
 
48. The "Other" category does not explicitly refer to any CPC number, but is generally assumed 
to include the remaining elements of the CPC's environmental services category, i.e. cleaning of 
exhaust gases (CPC 9404), noise abatement servic es (CPC 9405), nature and landscape protection 
services (CPC 9406) and Other environmental protection services n.e.c. (CPC 9409).18     
49. Classification of environmental services containe d in W/120 has been repeatedly criticized for 
being obsolete.  Its focus on infrastructure servi ces and end-of-pipe technologies is considered too 
narrow and many consider that it does not account for developments which have occurred in the 
environment industry over the last 20 years.  In  the Committee on Specific Commitments, various 
proposals were made to improve and update the classi fication of this sector, and, outside the WTO, 
subsequent classification systems (OECD/Eurostat, th e CPC 2, for instance) tend to propose a more 
detailed breakdown (see below under B). 
2. Environment-related services 
50. In addition to the services described in the preceding section, other services may have an 
environmental end-use.  However, as they are not exclusively environmental in nature and may have 
various other end-uses, they are classified under other generic items, in particular business and 
construction services.  Among them, some sectors may have a significant environmental component, 
and, in various instances, the CPC explic itly spells out environmental end-uses. 
(a) Under business services :  (i) advisory and pre-design architectural services 
(CPC 86711) which include preliminary studies on climatic and environmental 
concerns;  (ii) advisory and consulta tive engineering services (CPC 86721) which 
include study on the environmental impact of a project;  (iii) engineering design 
services for the construction of civil engi neering works (CPC 86724) which include 
services for the "construction of water s upply and sanitation works such as water 
distribution systems, water, sewage, industr ial and solid waste treatment plants";  
(iv) "other engineering services" which include "groundwater engineering services including groundwater resources assessme nt, contamination studies and quality 
                                                     
 
18 The complete CPC prov. definitions are reproduced in Appendix 2.  S/C/W/320 
 Page 13 
 
 
  management" (CPC 86729);  (v) integrated engineering and project management 
services for water supply and sanitation works turnkey projects (CPC 86732);  (vi) integrated engineering services for th e construction of manufacturing turnkey 
projects (CPC 86733) which include "polluti on and effluent control";  (vii) various 
research and development services (CPC 85), such as those dealing with physical 
sciences, chemistry and biology, engi neering and technology, and research and 
experimental development services on environmental sciences;  (viii) technical testing and analysis services, for instance testing and analysis of the chemical and biological properties of materials such as air, water, waste (municipal and industrial), soil, minerals, etc.;  (ix) services related to forestry (CPC 884) which include forest 
management and forest damage assessment;  and (x) services incidental to 
manufacturing which cover services related to recycling on a fee or contract basis (CPC 88493). 
(b) Under construction services
:  (i) construction of waterworks (CPC 5133);  
(ii) construction of water and sewer ma ins (CPC 5135);  (iii) water well drilling 
(CPC 5152);  (iv) water plumbing and drain laying work which includes septic tank 
installation (CPC 51620);  and (v) thermal insulation (CPC 51650).  Construction of 
waste treatment facilities is not explicitly mentioned in the CPC, but could fall under 
CPC 5123 (construction work for warehouses a nd other industrial buildings) or CPC 
5136 (construction work for mining and manufacturing) 
(c) Under distribution services :  (i) wholesale trade services of waste and scrap and 
(ii) materials for recycling (CPC 62278). 
51. Further sectors may prove relevant for the e nvironment industry, although no explicit 
environmental end-use appears in the CPC.  This is the case of, for instance, management consulting 
services (consulting regarding effective utilization of materials in the production process), banking 
services (relevant for trading and brokering emission rights), insurance services (insurance of 
environmental liabilities, such as pollution and ot her environmental risks), transport services 
(transportation of waste through various means of transport), and storage services (waste storage). 
3. Consultancy in the area of environmental services 
52. Environmental consulting (also termed "green consulting") has become an important business 
and covers a wide variety of t opics related to environmental prot ection.  Consulting firms provide 
environmental assessments and audits to private comp anies and public authorities.  While this branch 
offers niche markets for small- and medium-size en terprises, consulting services are also provided by 
bigger companies as part of integrated projects.  In 2000, US exports of environmental consulting and 
engineering services accounted for 63.4 per cent of all US environmental services exports19, making it 
the most significant environment-related cate gory among US services exports.  Environmental 
consulting also offers export potential for developi ng countries.  For instance, Indian environmental 
service providers have emerged as significant su ppliers of environmental support services like 
consulting (ICRIER, 2004). 
53. From the point of view of classification, th e question is whether consultancy services in 
relation to the environment belong to the particul ar environmental services sub-sector to which they 
relate, or whether they should be considered to fall under another "horizontal" category, such as 
certain business and professional services (for example, management consulting services, services 
related to management consultin g, architectural or engineering services).  The classification of 
                                                      
19 USITC, Recent Trends in U.S. Services Trade , 2002 Annual Report, May 2002. S/C/W/320 
Page 14  
 
  environmental consultancy was identified as deserving further consideration.  According to a group of 
Members,  
"[i]t would be logical that consultancy services in an area of environmental services 
(e.g. waste management solutions) may form part of that particular environmental 
services subsector.  If not, it would be unclear where such services would be 
classified.  However, ... a clear definition of consulting services involved might be 
required in order to include such services in certain subsectors of environmental 
services".
20   
54. In contrast, other delegations were of the view that environmental consulting, or at least part 
of it, was covered under relevant business services.21   
55. One should recall, in this regard, that several Members have limited their specific 
commitments, under environmental services, to co nsultancy/advisory services.  These commitments 
tend to be found under mode 1, where, typically, the mode is "unbound", except for the provision of 
consultancy/advisory services.  Furthermore, two Members have a sectoral headnote limiting their environmental services commitments to consultancy services.  This suggests that, for these Members, 
environmental services include related consulting and advisory services.    
56. As to the CPC 2, it contains a category specifically covering "environmental consulting 
services" (CPC 2, 83931) in Division 83 which deal s with "other professional, technical and business 
services".
22  According to the correspondences given by  the CPC 2 (via the CPC 1.1), these services 
would appear to belong to "other engineering services" in the CPC prov. (CPC 86729). 
                                                      
20 Joint Report on Informal Discu ssion on Environmental Services  in the Context of the DDA , 
Communication from Australia;  The European Communities;  Japan;  New Zealand;  The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu;  and the United States, TN/S/W/28, 11 February 2005.  Hong 
Kong, China later joined as a co-sponsor (TN/S/M/14, para. 126). 
21 Council for Trade in Services Special Session, Report of the Meeting Held on 21, 22, and 25 
February 2005, Note by the Secret ariat, TN/S/M/14, 26 April 2005 and Committ ee on Specific Commitments, 
Informal Discussion on Classification Issues of 19 July 2005 , Summary by the Chairman, 12 September 2005. 
22 The detailed explanatory note for "environmental consulting services" includes:  (i) environmental 
assessments, i.e. objective studies undertaken for any one or more of the following purposes:  identify whether 
or not environmental contamination exists at a particul ar site, and if so determined, the source, nature, and 
extent of the contamination; assess the risk to public safety and health from environmental contamination 
associated with a project that is proposed or in place; evaluate the impact on the ecology or economy of 
environmental changes resulting from human or natural ac tivities;  (ii) environmenta l audits, i.e. independent 
assessment of the current status of a party's compliance with applicable environmental requirements or of a 
party's environmental compliance policies, practices and cont rols;  (iii) site remediation planning services, i.e. 
preparation of plans for the abatem ent of environmental contamination, usually at a specific site, that 
incorporate such technical or other requirements as may be prescribed by law or regulation;  (iv) evaluation of 
environmental studies, i.e. provision of analysis that explains the strengths or weaknesses of an environmental 
study and provides the basis for alternative judgments. The evaluation of environmental studies may also include an analysis of future responses to environmental regulators;  (v) natural resource management 
consulting, i.e. provision of objective information, advice, or guidance concerning the best practices for 
ecologically sustainable development and use of: land; forests; bodies of water; gas, oil, and mineral deposits; wildlife populations and other natural resources;  (vi) wa ste management consulting, i.e. provision of objective 
information, advice, or guidance concerning the best practices for the minimization, transport, handling, 
disposal and/or recycling of waste;  (vii) environmenta l policy development consulting, i.e. advising public or 
private institutions on the design, development and implementation of environmental statutes, regulations, 
standards, or practices;  and (viii) other environmental consulting services n.e.c.  S/C/W/320 
 Page 15 
 
 
  B. ALTERNATIVE CLASSIFICATION APPROACHES    
1. OECD/Eurostat 
57. With respect to the environment industry, the Informal Working Group set up jointly by the 
OECD and the Statistical Office of the European Un ion (Eurostat) proposes the following definition:   
"The environmental goods and services indust ry consists of activities which produce 
goods and services to measure, prevent, limit, minimise or correct damage to water, 
air and soil, as well as problems related to waste, noise and eco-systems.  This includes cleaner technologies, products and services that reduce environmental risks and minimise pollution and resource use" (OECD/Eurostat, 1999). 
58. OECD/Eurostat developed a classification that breaks down environmental goods and 
services into three broad categories:  pollution management, cleaner technologies and products, and 
resource management.  This classification aims at  providing a system which is both accurate and 
flexible enough to adjust to the changes that OE CD/Eurostat forecasted for the environment industry, 
i.e. "concentration, privatization, a shift away from the production of end-of-pipe equipment to the 
invention of new, integrated and cleaner tec hnologies, and a move to totally new activities" 
(OECD/Eurostat, 1999).  The OECD/Eurostat approach  was used as a basis fo r some classification 
proposals tabled in the Committee on Specific Co mmitments and in the Special Session of the 
Council for Trade in Services (see below). 
59. The Pollution Management Group  "comprises goods and services that are clearly supplied for 
an environmental purpose only, that have a significan t impact in reducing polluting emissions and that 
are easily statistically identifiable".  This group is meant to represent "the core of the environmental 
goods and services industry" and classifies goods and services according to the following categories:  
air pollution control;  wastewater management;  so lid waste management;  remediation/clean-up of 
soil and water;  noise/vibration abatement;  and monitoring, analysis, assessment.  The list of 
environmental services identifies ten sectors which c over, though with a different breakdown, all the 
environmental services sub-sectors listed in W/120 as well as the remaining items in the CPC.   
Moreover, some of the environmental services id entified by OECD/Eurostat (environmental R&D;  
environmental contracting and engineering;  anal ytical services, data collection, analysis and 
assessment;  education training, information) can be found in other sectors of W/120, mainly business 
services.  Finally, a category on "construction and in stallation" of environmental facilities presumably 
includes various construction and engineering services.
23 
60. The other two groups do not contain separate lists for goods and services.  The Cleaner 
Technologies and Products  Group  comprises "goods and services which reduce or eliminate negative 
environmental impacts, but which are often supp lied for other than environmental purposes and for 
which statistical assessment remains disputed, diffi cult or expensive".  It lists "cleaner/resource-
efficient technologies and processes" and "cleaner/resource-efficient products".  The Resource 
Management Group  comprises "goods and services which ma y be associated with environmental 
protection, although their prime purpose is not envir onmental protection".  It lists indoor air pollution 
control, water supply, recycled materials, renewable energy plant, heat/energy saving and 
management, sustainable agriculture and fisheries, sustainable forestry, natural risk management, eco-
tourism, and a residual "other" category. 
                                                      
23 The Explanatory Notes for environmental services are reproduced in Appendix 3. S/C/W/320 
Page 16  
 
  2. CPC Version 2 
61. The latest version of the CPC has significantly revamped the Division dealing with 
environmental services, offering a more detailed breakdown and more specific definitions for each category (see Appendix 2 for a comparison betwee n CPC prov. and CPC 2).  Furthermore, new 
entries explicitly linked to the environmen t have been included under other sectors. 
62. In the CPC 2, sewage services are divided in  two categories, i.e. "sewerage and sewage 
treatment services" and "septic tank emptying and cleaning services".  The sub-sector known as "refuse disposal services" in the CPC prov., deali ng with waste collection and disposal services, is 
broken down in two sub-sectors in the CPC 2, i.e. "waste collection services" and "waste treatment and disposal services", which are in turn divided into  several categories and sub-categories:  (i) waste 
collection services distinguishes between various ca tegories of wastes, e.g. hazardous medical and 
other bio-hazardous, industrial hazardous, non-h azardous recyclable materials, general waste 
collection services;  (ii) waste treatment and disposal services are broken down into three main categories, i.e. "waste preparation, consolida tion and storage services", "hazardous waste treatment 
and disposal services" and "non-hazardous waste trea tment and disposal services".  The CPC 2 has 
also expanded the sub-sector "sanitation services" which now includes:  (i) "sweeping and snow 
removing services" (e.g. street sweeping and cleaning services, gritting and salting of roads, snow ploughing and removal, runway sw eeping and snow removal services, etc.) and (ii) "other sanitation 
services", which cover beach cleaning services and drain unblocking services. 
63. One of the most significant changes is the di sappearance of the three sub-sectors "cleaning 
services of exhaust gases", "noise abatement servi ces" and "nature and landscape protection services", 
which the CPC 2 seems to have included unde r "other environmental services n.e.c.".
24  Moreover, the 
CPC 2 has introduced a new sub-sector entitled "r emediation services", which includes services 
"dealing with the effects of contamination caused by operation of facilities or by accidents" and which 
aim to "eliminate or contain any contamination of th e soil, water or air and have to be performed on 
site".  The sector is divided into "site remedia tion and clean-up services" (of air, surface water, soil 
and groundwater), "containment, c ontrol and monitoring services and other site remediation services", 
"building remediation" and "other" remediation services.   
64. The CPC 2 explicitly spells out several servi ces related to the environment under other 
sectors.  For instance, a new category entitled "e nvironmental consulting services" (CPC 2, 83931) 
has been included under "scientific and technical cons ulting services n.e.c.":  it covers services such 
as environmental assessments and audits, site remediation planning services, evaluation of 
environmental studies, natural resource manageme nt consulting, waste management consulting and 
environmental policy development consulting (see a bove footnote 22).  In relation to engineering 
services, the CPC 2 has introduced "engineering services for waste management projects (hazardous 
and non-hazardous)" (CPC 2, 83326) and "engineering services for wa ter, sewerage and drainage 
projects" (CPC 2, 83327).  Construction services in cludes categories related to "general construction 
services of sewage and water treatment plants" (C PC 2, 54253) and "water well drilling and septic 
system installation services" (CPC 2, 5434).  Finall y, the CPC 2 covers "water distribution services 
through mains (on a fee or contract basis)" (CPC  2, 8633) and "water distribution services, except 
through mains (on a fee or contract basis)" (CPC 2, 8635), e.g. distribution of water by trucks.  These services belong to the Group dealing with "support serv ices to electricity, gas and water distribution" 
(CPC 2, 863), which is found in Sectio n 8 ("Business and production services"). 
                                                     
 
24 The CPC 2 does not provide a direct correspondence system with the CPC prov.  Correspondences 
thus need to be established via CPC 1.1.  S/C/W/320 
 Page 17 
 
 
  3. New approaches in the WTO 
(a) Proposals to restructure the classification of the environmental services sector in W/120 
65. A number of Members share the view that the classification of environmental services in 
W/120 is obsolete and should be revised so as to better reflect the environmental industry.  The 
European Union and Switzerland have  proposed restructuring this sector with the creation of seven 
categories based on the environmental media (air, water,  soil, waste, noise, etc.) in order to reflect the 
way in which services providers tend to specialize.25  The proposed breakdown would differ from the 
structure of W/120 and would introduce new headings  and sub-headings.  The EU explicitly proposed 
that the new categories would remain defined by reference to the CPC prov.   
CPC EU Proposal Swiss Proposal 
Sewage services 
CPC 9401 Water for human use & wastewater 
management 
Part of CPC 18000 & CPC 9401 Wastewater management 
Refuse disposal services 
CPC 9402 
Sanitation services 
CPC 9403  Solid/hazardous waste 
management 
CPC 9402 & 9403 Waste management 
Cleaning services of exhaust gases 
CPC 9404 Protection of ambient air and 
climate 
CPC 9404 Protection of ambient air and 
climate 
Noise abatement services 
CPC 9405 Noise and vibration abatement 
CPC 9405  Noise and vibration abatement 
Remediation and cleanup of soil & 
water 
Part of CPC 9406 Remediation and cleanup of soil 
and water Nature and landscape protection services 
CPC 9406  
Protection of biodiversity and 
landscape 
Part of CPC 9406  Protection of biodiversity and 
landscape 
Other environmental services n.e.c. CPC 9409 Other environmental and ancillary 
services 
CPC 9409  Other environmental and ancillary 
services 
 
 
66. In the ensuing discussions on the EU proposals, two main issues emerged.  First, questions 
were raised as to whether modifying the headings while retaining CPC definitions amounted to a mere 
technical change or entailed substantive modifications .  Or, in other words, would there still be full 
concordance between the envisaged new headings and CPC definitions?26  Second, the suggestion to 
include "water for human use", which the EU proposal  defined as "water collection, purification and 
distribution services through mains, except steam & hot  water" proved controversial among Members.   
                                                      
25 Proposals by the European Union in S/CSS/W/38  and by Switzerland in S/CSS/W/76.  The United 
States (S/CSS/W/25) supported proposal s that incorporated a core list of  environmental services, comprised 
primarily of the currently classified environmental serv ice sectors.  Canada (S/CSS/W/51) was in favour of 
liberalizing the activities contained in the core list of en vironmental services as they are currently defined in 
W/120.  Australia (S/CSS/W/112) was in favour of broadening the current classification and endorsed in 
principle the approach proposed by the EU.  Colombia (S/CSS/W/121) considered it would be useful to establish a model list incorporating new services not already included in W/120, including the implementation 
and auditing of environmental management systems, th e evaluation and mitigation of environmental impacts, 
and advice in the design and implem entation of clean technologies.   
26 See, for instance, Co mmittee on Specific Commitments, Info rmal Discussions of Classification 
Issues on 19 July 2005, Summary by the Chairman, 12 September 2005. S/C/W/320 
Page 18  
 
  67. Although Members have not agreed so far to formally modify the classification of 
environmental services, several of them have used these proposals, or elements of them, in their DDA 
offers on environmental services. 
68. In classification discussions, several delega tions proposed that, in addition to the 
identification of "core" environmental services, a list be established which w ould make an inventory 
of services that contributed to the provision of environmental services, for instance because they had 
environmental end-uses.
27  As explained above, a range of services, found under different sectors of 
W/120, serve environmental purposes among several other end-uses.  In some cases, the CPC explicitly mentions the environmental end-use of th e service, while, in other cases, the environmental 
component is not explicitly spelt out, but derives from the nature of the activity itself.  It was 
proposed that such environment-related services could be subject to a "cluster" or "check-list", that 
could be used as an aide-mémoire  during the negotiations.  Commitments on the services concerned 
should be scheduled in the relevant environmen tal sectors and sub-sectors, including services in 
business and professional services, constructi on, education and transport sectors.  
(b) The collective request on environmental services 
69. The collective request on environmental services calls on Members to undertake 
commitments across all sub-sectors contained in Division 94 of the CPC, i.e. CPC 9401 to 9409.  With respect to the headings, th e collective request proposes that Members "may schedule either on 
the basis of existing sub-headings for environm ental services contained in W/120 and UN CPCs or 
may use a revised classification which some Member s have felt better reflects the commercial reality 
of environmental services markets".  For instance, Members may use "wastewater management" 
instead of "sewage services", "solid/hazardous w aste management" instead of "refuse disposal 
services and sanitation services".  The alternative headi ngs proposed are largely similar to the EU and 
Swiss classification proposals.
28  The request adds that, "[i]rrespective of choice of sub-heading, CPC 
9401, 9402, 9403, 9404, 9405, 9406 and 9409 should be explicitly listed in a Member’s commitment".
29 
70. The collective request also notes that there is an "important interplay" between the 
liberalization of environmental services and the libera lization of related services,  such as construction, 
engineering, technical testing and an alysis, and management consulting. 
(c) The EU-US Proposal for a Result Under Paragraph 31(iii) of the Doha Ministerial 
Declaration  
71. Paragraph 31(iii) of the Doha Declaration calls for the "reduction or, as appropriate, 
elimination of tariff and non-tariff barriers to e nvironmental goods and services".  To fulfil this 
mandate, the European Union and the Unite d States proposed a two-tier approach.30  With respect to 
services, the proposal goes beyond environmental services as defined in sector 6 of W/120 and 
identifies other sectors that, in the view of th e proponents, are key in addressing environmental 
challenges, in particular climate mitigation. 
                                                      
27 See, in particular, proposals from the Un ited States (S/CSS/W/25), the European Union 
(S/CSS/W/38), Canada (S/CSS/W/51), Switzerland  (S/CSS/W/76) and Australia (S/CSS/W/112). 
28 The collective request on environmental services explicitly indicates that it does not address "water 
for human use", which was included in the EU classification proposal. 
29 See Review of Progress in Environmental Services , Communication from the European Union, 
JOB(07)/210, 5 December 2007, Attachment. 
30 Proposal for a Result Under Paragraph 31(iii) of the Doha Ministerial Declaration , Non-Paper by 
the European Union and the United St ates, JOB(07)/193/Rev.1, 6 December 2007.  See also Council for Trade 
in Services Special Session, Report of the Meeting Held on 15 November and 6 December 2007, TN/S/M/28, 
5 May 2008, paras. 278 to 308.  S/C/W/320 
 Page 19 
 
 
  72. Tier one calls for the liberalization of trade in  climate and clean energy goods and services.  
The proposal identifies services which would "enabl e Members to fulfil climate change objectives", 
i.e. environmental services (e.g. air pollution and climate control services);  technical testing and 
analysis (e.g. air composition and purity testing services);   energy-related services (e.g.  engineering 
and maintenance  services to optimise the environmental performance of energy facilities);  and 
services for the design and contruction of energy-effi cient buildings and facilities.  Tier two proposes 
the negotiation of an "Environmenta l Goods and Services Agreement", based on the experience of the 
Information Technology Agreement (ITA).  With resp ect to services, the negotiations should cover "a 
broad set of environmental and climate-related services", including environmental, energy, 
construction, architectural, engineering and integrated engineering services. 
V. THE APPLICATION OF THE GATS TO TRADE IN ENVIRONMENTAL 
SERVICES 
A. RELEVANCE OF THE FOUR MODES OF SUPPLY  
73. The four modes of supply are relevant in th e environmental services sector, although their 
importance varies depending on the services concerned.   
74. Cross-border supply  of environmental services was commercially insignificant at the time the 
GATS entered into force, which prompted a number of Members to schedule an "unbound*" (i.e. for lack of technical feasibility).  In the meantime, electronic transactions have  opened a range of new 
possibilities to provide environmental services cross-bor der.  In several sectors, it is now feasible to 
remotely control equipment via computers.  Exam ples of such operations include the control of 
equipment for pump-and-treat plants for site remediat ion, the monitoring of air pollution levels, or the 
monitoring of waste water treatment plants.  Envi ronmental consulting services can also be provided 
online.  Furthermore, mode 1 covers the cross- border provision of several important environment-
related services, such as engineeri ng designs, and testing and analysis. 
75. The consumption abroad  mode of supply has limited releva nce with respect to situations 
involving the movement of consumers, save perhap s for consulting services.  However, mode 2 may 
come into play if the transaction involves the movement of goods/items be longing to a service 
consumer.  For instance, country A shipping waste to  country B for treatment and disposal is a form 
of waste services consumed abroad.
31  The commercial significance of mode 2 may increase 
substantially if one considers that  it covers electronic transactions. 
76. Establishment of a commercial pre sence is the predominant mode of supply in this sector as 
many environmental services are infrastructure-de pendent and require a c ontinuous and long-term 
local presence.  Hence, it is important for foreign firm s to be able to establish affiliates abroad or to 
invest in local companies.  GATS mode 3 commitments can also give the right to invest in an existing 
monopoly.  Commercial presence is a vehicle to ensu re additional investment and transmission of 
technology and know-how.  For instance, local firms in developing-country remediation markets often 
seek partnerships with more established firms so as to acquire industry knowledge and experience 
(USITC, 2004).   
                                                      
31 The movements of waste, especially hazardous waste, is in general tightly regulated, either by 
national or international instruments, and, in practice, a li mited percentage of waste crosses borders.  There is an 
inverse relationship between importing waste and exporting services:  countries importing waste are exporters of 
waste treatment services, and vice-ve rsa.  Hence, a mode 2 GATS co mmitment on waste treatment service 
indicates the possibility for domestic firms to purchase  such services abroad, which may imply shipping the 
waste to a foreign treatment plant.  It does not, however, prevent a country from regulating the import and 
export of waste.   S/C/W/320 
Page 20  
 
  77. The various categories of mode 4 – presence of natural persons – are relevant for 
environmental services.  Intra-corporate transferees appear to be of particular significance as it is crucially important for firms to be able to send abro ad managers or technicians with specialized skills 
when they operate through affiliates.   When it is not practical or feasible to establish a commercial 
presence, it is common for a company to send engin eers abroad to direct the performance of local 
workers (USITC, 2004).  Services such as envir onmental consulting and a udits should also offer 
opportunities to independent suppliers. 
B. S
CHEDULING COMMITMENTS ON INFRASTRUCTURE SERVICES  
78. As explained above, environmental infrastruct ure services, such as waste management or 
waste water treatment, are generally in the hands of local public authorities which may provide these 
services themselves through public entities.  Alterna tively, they may decide to involve the private 
sector and delegate the responsibility to provid e the service, while retaining a regulatory and 
surveillance role.  In the latter cas e, a private firm will be granted some form of exclusive right to 
provide services to the general public in a geogra phically limited area.  In such cases, there is 
generally no competition in  the market (some of these services are close to natural monopoly 
situations) as one supplier will be given the exclusive right to operate over a certain geographical area.  
There may be competition for  the market, however, for instance through a tender procedure.   
79. Various questions may arise as to the scope of market access and national treatment 
commitments when private firms can operate only upon delegation of tasks by a public authority.  Furthermore, the involvement of private firms ca n take various contractual forms, as shown in 
Appendix 1.  Some of these contracts may fall within  Article XIII:1 of the GATS, if they amount to 
"the procurement by governmental agencies of services purchased for governmental purposes and not 
with a view to commercial resale or with a view to  use in the supply of services for commercial sale".  
Pursuant to the same provision, these transactions would fall outside the scope of specific commitments and the MFN obligation.  However, in  the range of contractual arrangements between 
public and private entities, it is not easy to dr aw the line between contracts which amount to 
government procurement within the meaning of GA TS Article XIII, and other types of transactions 
which would remain subject to GATS Articl es XVI and XVII, and the MFN obligation. 
80. Several Members indicated that they had discu ssed the issue of scheduling commitments for 
environmental infrastructure services and had focused  on three main questions, which, in their view, 
could benefit from a debate among all Members:   
"(a)  In which subsectors of environmental services are these forms of [private-public 
partnerships, PPPs] particularly relevant ? A more thorough examination of the 
subsectors that utilise PPPs and the various  types of these partnerships would be 
useful in order to gain a more thorough understanding of the envi ronmental services 
sectors.  
(b)  For those countries wishing to make commitments in services provided through 
various forms of public-private partners hips, what should such commitments look 
like?  How can Members clearly indicate th e existence of exclusive rights contracts 
while also indicating that foreign service providers can be gran ted national treatment 
for such contracts?    S/C/W/320 
 Page 21 
 
 
  (c)  Which types of activities or public-private partnerships are to be considered as 
government procurement under GATS Article XIII?"32 
C. IMPEDIMENTS ENCOUNTERED IN ENVIRONMENTAL SERVICES MARKETS  
81. The supply of environmental services does not seem to be subject to many specific barriers, 
but may nevertheless be affected by measures applying across the economy as a whole.  A number of 
these measures would fall under GATS Articles XVI a nd XVII.  Moreover, other provisions of the 
GATS may be relevant with respect to certain t ypes of measures, in particular GATS Articles III 
and VI. 
82. Several impediments reported by exporters of environmental services affect the establishment 
of a commercial presence:  limitations on the types of legal entity (such as incorporation 
requirements), restrictions on the number and locati on of subsidiaries, discrimination against foreign 
companies (e.g., high registration fees and discriminat ory taxes, equity limitations), limitations on the 
number of foreign employees and restrictions on th e ownership of specific assets (such as landfills 
and sewage systems).33  Restrictions also affect the move ment of key personnel (such as managers, 
professionals and experts).  Cross-border supply of environmental services does not seem to be 
restricted for the time being. 
83. Other problems encountered by exporters of envi ronmental services include a general lack of 
regulatory transparency (e.g., for licensing and certification procedures, and tendering processes) 
which may favour arbitrary decisions and corruptio n;  unnecessary delays in processing applications 
and informing applicants;  weak or inconsistent en forcement of environmental regulation;  lack of 
local skilled workers;  difficulties in transferring or acquiring the necessary equipment (in particular 
because of high import tariffs are levied, even when the equipment is imported for a short period);  
and obligation to use local inputs (S/CSS/W/112 and US ITC, 2004).  The lack of  adequate intellectual 
property protection is another deterre nt for foreign firms in some mark ets.  Measures affecting related 
sectors, such as architecture and engineering also a ffect the provision of environmental services, as 
does the lack of a proper insurance industry (USITC, 2004). 
84. Finally, the fact that government procurement is not subject to the MFN obligation nor to 
specific commitments opens potentially wide scope for discretion as public authorities account for a significant share of environmental services consumption. 
D. P
ATTERN OF SPECIFIC COMMITMENTS ON ENVIRONMENTAL SERVICES  
1. General 
85. Environmental services are one of the least-committed sectors under the GATS.  This may be 
explained, in part, by the fact that, during the Uruguay Round, negotiations focused on infrastructure 
services.  Also, concerns related to environmen tal protection and polluti on mitigation had then a 
lesser profile than today, both at  national and inte rnational levels. 
86. Fifty-nine Members have undertaken specific co mmitments in at least one of the seven CPC 
sub-sectors of environmental services;  in total,  318 sub-sectors have been scheduled (Appendix 4).34  
                                                      
32 Joint Report on Informal Discu ssion on Environmental Services  in the Context of the DDA , 
Communication from Australia;  The European Union;  Japan;  New Zealand;  The Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu;  and the United States, TN/S/W/28, 11 February 2005.  Hong Kong, 
China later added its name to the list of  co-sponsors (see TN/S/M14, para. 126). 
33 Some of these impediments are mentioned in the Communication from Australia, Negotiating 
Proposal for Environmental Services , S/CSS/W/112, 1 October 2001. 
34 The count is based on the EC-12 schedule which is the one in force at the time of writing this Note. S/C/W/320 
Page 22  
 
  The number of commitments is roughly equal across the seven sub-sectors and ranges from 39 to 49.  
With respect to the three sub-sectors explicitly lis ted in W/120, the range is even more narrow, 
between 48 and 49.  Moreover, as in other sectors, recently acceded Members
35 have undertaken a 
proportionally higher level of commitments (figures in parentheses below): 
• Sewage services       49  (22) 
• Refuse disposal services     48  (21) 
• Sanitation and similar services      49  (21) 
• Other 
o Cleaning services of exhaust gases    46  (23) 
o Noise abatement services     46  (23) 
o Nature and landscape protection services   41  (20) 
o Other environmental protection services n.e.c.   39  (18) 
 
2. Sectoral scope of commitments 
87. Most Members have listed their commitments according to W/120 structure and headings, 
with references to corresponding CPC definitions.  However, a few Members have used W/120, but 
have not included CPC definitions;  and, in some cases, alternative definitions have been provided.  
Some Members have opted for minimal descriptions:  (i) one Members simply refers to "CPC:  9401, 9403";  (ii) another Member has listed commitme nts on "CPC 940", without further specifications;  
(iii) one schedule contains a mere reference to "Environmental Services", and (iv) another one to 
"[s]ub-sectors A-D". 
88. In more than 20 schedules, commitments on envi ronmental services have been made subject 
to a number of modifications or clarifications, either in sectoral headnotes or at the sub-sectoral level.  These relate, inter alia , to the type of services included/excluded and the status of the provider 
(private/public).  Several Members have limited th eir commitments to consulting and/or advisory 
services in relation to environmental services, either  across the entire range of committed sectors or 
with respect to some sub-sectors only.  The exclusi on is indicated either in a sectoral headnote or at 
the level of the sub-sectors concerned.  Other Memb ers have confined this type of restriction to 
mode 1. 
89. Various schedules refer to the definitions of the CPC prov., but modify or complement the 
scope of those definitions by including additional explanation in the sectoral column.  For instance: 
(a) Commitments on cleaning services of exhaust gases (CPC 9404) and noise abatement 
services (CPC 9405) do not include "construction work services", and commitments on CPC 9406 and CPC 9409 are both limited to "environmental impact assessment services". 
(b) Exclusion of "national parks" from a co mmitment on nature and landscape protection 
services (CPC 9406).   
(c) Commitments on cleaning services of exhaust gases (CPC 9404) and noise abatement 
services (CPC 9405) are limited to "imple mentation and installation of new or 
existing cleaning systems, remedial, preventive and monitoring services;  consulting services in these fields";  and a commitment on nature and landscape protection 
services (CPC 9406) is confined to "services for conducting studies on the relation 
between the environment and climate, including services of evaluation of natural disaster and reduction of their consequences". 
                                                     
 
35 Twenty-six Members had completed their accession at the time of writing this Note.  S/C/W/320 
 Page 23 
 
 
  (d) Commitments on sewage (CPC 9401) and re fuse disposal services (CPC 9402) do 
"not includ[e] industrial activities". 
(e) One schedule specifies that commit ments on:  sewage services (CPC 9401) 
"include[es] industrial waste wa ter treatment system";  (ii) refuse disposal services  
(CPC 9402) "include[es] hazardous waste ma nagement and incinerator";  and (iii) 
cleaning services of exhaust gases "include[es] industrial emission abatement". 
(f) A footnote to refuse disposal services explains that "[i]mports of refuse is forbidden 
by law.  Treatment and disposal of hazardous waste is regulated by law". 
90. Some schedules contain sectoral headnotes or footnotes which aim at limiting the type of 
services covered under the various committed sub-sectors. 
(a) A sectoral footnote clarifies that "[t]he commitments do not apply to services related 
to the collection, transportation, storage, secondary use, recycling, restoration, use in the production of energy and materials, and disposal of dangerous waste, refuse and 
substances". 
(b) A sectoral headnote excludes "environmenta l quality monitoring and pollution source 
inspection" from the sub-sectors committed (CPC 9401-9409). 
(c) A first sectoral footnote indicates that "[i] n each of the following sub-sectors", the 
commitments are limited to certain services, i.e. "... implementation and installation of new or existing systems for environmen tal cleanup, remediation, prevention and 
monitoring;  implementation of environmen tal quality control and pollution reduction 
services;  maintenance and repair of envi ronment-related systems and facilities not 
already covered by [that Member's] comm itments on maintenance and repair of 
equipment;  on-site environmental investig ation, evaluation, monitoring;  sample 
collection services;  training on site or at the facility;  consulting related to these 
areas."  A second sectoral footnote stipulates that "[n]othing in this offer related to transportation should be construed to s upersede the existing ... commitments on 
transportation or related MFN exemptions". 
(d) A headnote states that "acces s to certain geographic areas may be restricted for 
national security reasons".  A footnote expl ains that this commitments "allows the 
maintenance or adoption of lim itations or restrictions for national security reasons 
that would be justified under Article XIV and Article XIV bis of the GATS". 
91. Some Members have limited the scope of sub-sectors, in particular sewage services and 
refuse disposal services, to services provided to industrial clients: 
(a) In two schedules, commitments on sewage ser vices and refuse disposal services apply 
only to services "contracted by private industry". 
(b) In another schedule, commitments on sew age services cover only "collection and 
treatment services of industrial waste water" and commitments on refuse disposal 
services are limited to "collection, transport and disposal services of industrial 
refuse". 
92. Several Members address in sectoral headnotes or footnotes the role of public authorities in 
relation to environmental services.     S/C/W/320 
Page 24  
 
  (a) One Member indicates that "the commitments do not include environmental services 
supplied in the exercise of governmental authority" and clarifies in a footnote that "these are regulatory, administrative and control services by government and municipal bodies related to environmental issues". 
(b) Four schedules stipulate in a sectoral footnote that "Nothing in this commitment 
should be construed to include public work  function whether owned and operated or 
contracted out" by local, regional or central government.  
(c) Another schedule indicates that "[p]ublic utility exist;  concession rights can be 
granted to the private operators establishe d" in the territory of that Member. 
93. Some Members have non-W/120 sectoral headings and combine them with CPC references:  
(a) A schedule contains commitments on "monitoring services of exhaust gases (part of 
CPC 9404)", "noise pollution monitoring services (part of CPC 9405)" and "nature protection services (part of CPC 9406)".   
(b) A Member has committed on "[e]nvironment testing and assessment services" with 
references to CPC 9406* and 9409*. 
(c) One schedule makes use of the following h eadings:  "[s]ewage services/waste water 
services", "[s]ervices to reduce exhaust gases and other emissions and improve air quality", "[t]reatment, remediation of contam inated/polluted soil and water, nature 
and landscape protection services".  Referenc es are made to, respectively, CPC 9401, 
9404 and 9406.   
94. In three cases, there seems to be a discre pancy between W/120 heading and the services 
referred to in the CPC definition:  (ii) a commitment on "Environmental Protection and 
Environmental Abatement Services" makes a reference to CPC 9401;  (ii) one Member has commitments on "sewage and refuse disposal services " with references to "CPC 9401-9405";  and (iii) 
and two Members have scheduled their commitments based on an inversion of the headings of sub-
sectors 9401 and 9403.  They may have been confused by the French version of W/120 which 
contains the same mistake.
36   
95. Forty-eight Members have commitments under sub-sector 6.D, which consists of an 
undefined "other" services in W/120.  Most of them have listed here commitments for one or several of the CPC 9404 to 9409 sub-sectors.  Five Memb ers have commitments under "D. Other", but have 
not further defined their scope (i.e. no reference to CPC 9409 and no alternative definition).  Two 
Members have committed to "part of" the CPC 9409 de finition, but without specifying which services 
are excluded/included.  One Member indicates th at its commitment under CPC 9409 "include[es] 
environmental impact assessment".  Another Memb er defines its "other" commitment as covering 
"wildlife protection services, ONG environment".   
96. In addition, a Member has undertaken, un der "other business services", commitments on 
"environmental conservation and industrial safety in connection with oil spills, pollution and fire" and 
                                                     
 
36 The 2006 Annual Report of the Committee on Specific Commitments records the action taken to 
correct the mistake contained in the Fr ench version of W/120:  "At the meeting of 10 April 2006, the Chairman 
reported that during informal discussions, Members' attention had been drawn to  an error in the French version 
of the Services Sectoral Classificati on List where parts of the headings of the sub-sectors corresponding to CPC 
9401 and CPC 9403 had been inverted.  The correct corre spondence was set out in the report of the meeting, as 
well as in a corrigendum to the Schedu ling Guidelines (S/L/92/Corr.1)."  See Annual Report of the Committee 
on Specific Commitments to the Council for Trade in Services (2006) , S/CSC/12, 21 November 2006, para. 5.    S/C/W/320 
 Page 25 
 
 
  on "environmental impact studies";  although it h as chosen to schedule such commitments under 
"other business services", these activities would argua bly coincide with environmental services, in 
particular "nature and landscape protection services" and "other environmental protection services n.e.c.". 
3. Commitments by mode  
97. The Chart below gives an estimate (%) of th e level of commitments undertaken for each 
mode of supply in the 318 environmental servi ce sub-sectors contained in current schedules. 
020406080100
m o d e  1m o d e  2m o d e  3m o d e  4Full
Partial
Unbound
 
 
98. Under mode 1 , about 47 per cent of the commitments are fully bound and 42 per cent are 
unbound.  In the latter category, some 60 per cent are unbound because, in the view of the Members 
concerned, cross-border supply is not technically feasible.  Partial commitments (about 10 per cent) 
include those where either market  access or national treatment has been left unbound, as well as those 
cases where cross-border commitments are limited to  advisory/consulting services.  One schedule has 
a commercial presence requirement under mode 1. 
99. As in other sectors, mode 2  has a high proportion of full commitments (about 91 per cent).  In 
practice, the relevance of mode 2 seems to be ra ther limited for environmental services, except if 
electronic transactions are considered to be covered. 
100. The proportion of full mode 3  commitments is striking:  over 85 per cent.  No Member has 
left mode 3 totally unbound.  Only two Member s have left national treatment unbound and the NT 
limitation listed refers to a limitation on foreign equity  participation.  Market access restrictions found 
in the 15 per cent of sub-sectors with partial commi tments include numerical quotas, joint-venture and 
incorporation requirements, foreign capital li mitations, economic needs tests, and licensing 
requirements.  Some restrictions indicate the existence of a monopoly:  (i) monopoly for certain categories of waste;  and (ii) government-owned  monopoly for control services of exhaust-gas from 
cars and trucks, with the indication that such servi ces must be offered on a non-profit basis.  Two 
Members have carved out "garbage dump" from commitments on refuse disposal services. 
101. Other mode 3 market access restrictions concer n the role of local and regional authorities with 
respect to the provision of infrastructure services: 
(a) In one schedule, commitments on sewage services, refuse disposal services and 
sanitation services are subject to the following limitation:  "These services are legally considered as municipal activities, provide d primarily by entities owned by local S/C/W/320 
Page 26  
 
  authorities.  Private operators may be a llowed to provide those services on the basis 
of a concession granted by local authorities". 
(b) A Member stipulates that "it is necessary to  apply to the municipal authorities for the 
concession or licence to provide refuse dispo sal services, with the requirement that 
the applicant be domiciled" in its territory.  This limitation applies to the four sub-
sectors in "other" environmental services. 
(c) A commitment on refuse disposal services stipulates that "refuse collection and 
transport service suppliers may conduct busin ess only within the jurisdiction of the 
respective Regional Environment Office which has granted them approval for 
operation".   
(d) Another Member "confirm[s] that services supplied in the exercise of governmental 
authority as defined in Article I:3(c) may be subject to public monopolies or exclusive rights granted to private operators ".  This entry applies to sewage services, 
refuse disposal services, cleaning services of exhaust gases and noise abatement services. 
102. Mode 4
 commitments follow the usual pattern with a vast majority of partial commitments 
defined in the horizontal part of the schedule.  Three Members have inscribed a "none" under mode 4 
and two have left it totally unbound. 
4. Horizontal limitations 
103. Several types of limitations listed in the horizontal part of schedules may concern 
international trade in environmental services.  Th ey include limitations on real estate ownership or 
lease, foreign equity limitations, economic needs test s, residency or nationality requirements for 
directors, discriminatory minimum capital requirements, technology transfer requirements and obligation to train nationals. 
104. Other horizontal restrictions affecting forei gn service suppliers concern more specifically 
public companies or sectors with a public service element:  concession requirements for investments 
in public utilities;  limited foreign capital participati on in public companies;  restricted participation in 
privatization programmes;  and total prohibition for foreign companies to invest in "public services" 
or "public utilities".  
105. A schedule contains a broad limitations concer ning public utilities, which makes an explicit 
reference to environmental services  and other services which may have  an environmental end-use.  The 
limitation, inscribed under mode 3, stipulates that "...  services considered as public utilities at a national 
or local level may be subject to public monopolies or to  exclusive rights granted to private operators".  A 
footnote explains that  
"[p]ublic utilities exist in sectors such as re lated scientific and technical consulting 
services, R&D services on social sciences a nd humanities, technical testing and 
analysis services, environmental services
, health services, transport services and 
services auxiliary to all modes of trans port.  Exclusive rights on such services are 
often granted to private operators, for instance operators with concessions from 
public authorities, subject to specific service obligations.  Given that public utilities often also exist at the sub-central level, detailed and exhaustive sector-specific scheduling is not practical" (emphasis added).    S/C/W/320 
 Page 27 
 
 
  106. Another schedule contains a similar restriction ("Services considered ... as public utilities at a 
national or local level may be subject to public mo nopolies or to granting of concessions to private 
operators, as indicated in sector specific commitments"). 
5. Additional commitments 
107.  Only one schedule contains an additional commitm ent for environmental services.  It is listed 
in relation to sewage and refuse disposal services and stipulates that "foreign companies are allowed 
to do business activities ... in the form of build-o perate-transfer (BOT) and build-transfer-operate 
(BTO)".   
6. MFN exemptions  
108. No MFN exemption has been listed specifically  in relation to environmental services.  
VI. ENVIRONMENTAL SERVICES UNDER PR EFERENTIAL TRADE AGREEMENTS 
109. Overall, preferential commitments, whethe r in positive or negative list PTAs, go beyond 
GATS commitments.  As evidenced by a recent publication, "... PTAs have made vast advances in 
comparison to GATS commitments and offers across all sectors" (Marchetti & Roy, 2008).  A preliminary survey of the more than 70 agreemen ts notified to date under GATS Article V indicates 
that the same is true for environmental services (see also Appendix 5).  Generally speaking, negative 
list agreements entail a higher level of bindings than positive list agreements.  Furthermore, the 
difference between environmental services commitmen ts in the GATS, on the one hand, and in PTAs, 
on the other hand, tends to be greater for devel oping countries due to their lower number of GATS 
commitments in this sector.  All developed c ountries, but one, have undertaken GATS specific 
commitments on environmental services. 
110. In positive list agreements , several Members have undertaken preferential commitments on 
environmental services which are without equivalent  in their GATS schedules.  This is the case for 
various developing countries, such as the Cari forum countries (Antigua and Barbuda, Barbados, 
Belize, Dominica, Dominican Republic, Grenada, Guyana, Jamaica, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadine, Suriname, Trinidad and Tobago) in their agreement with the European 
Union, but also Chile (EU-Chile, EFTA-Chile),  the Philippines (ASEAN- AUNZ, ASEAN-China, 
Japan-Philippines), Singapore (ASEAN-AUNZ, ASE AN-China, China-Singapore, EFTA-Singapore, 
India-Singapore, Japan-Singapore), Pakistan (Pakis tan-Malaysia) and Peru (Peru-China).  In the 
context of the Mercosur, the outcome of the seventh round of services negotiations includes 
commitments on environmental services for all four parties to the treaty (Argentina, Brazil, Paraguay 
and Uruguay).  The difference between GATS and pref erential commitments is more limited in the 
case of developed countries as most of them have  undertaken GATS commitments in this sector.  
Nevertheless, a few Members, such as Australia, th e European Union, Japan and Norway, go further 
than their GATS commitments in some positive list PTAs.  New Zealand, which does not have GATS 
commitments, has undertaken environmental servi ces commitments in several positive and negative 
list PTAs. 
111. In positive list PTAs, commitments on environmental services are normally based on W/120 
classification with references to the CPC prov.  However, some PTAs include commitments in sub-
sectors which are not listed under environmental servi ces as defined in W/120.  For instance, in EU–
Chile, the European Union has undertaken specifi c commitments on "water for human use" under 
environmental services:  12 EU Member States have undertaken full mode 3 commitments.  In its agreement with Singapore, Jordan  has undertaken mode 3 commitments on water treatment services, 
including "water purification, wastewater treatment, water recycling, desalination, and fluid treatment 
for processed industries";  access is limited to  "companies providing services for the use of S/C/W/320 
Page 28  
 
  Singaporean private sector investors within a specific project and should not provide services to the 
public".  In various PTAs, Singapore excludes "new environmental services", but does not define these. 
112. As in other sectors, negative list agreements  provide for an overall higher level of bindings 
than positive list PTAs with respect to environmen tal services.  No negative list PTA totally excludes 
environmental services.  Reservations most comm only listed concern environmental infrastructure 
services, most often the provision of water supply and wastewater services;  solid and hazardous 
waste management, as well as sanitation services, are also subject to some restrictions, though less 
frequently.  These reservations, which affect primar ily commercial presence, take various forms, in 
particular:  existence of a public monopoly, incorp oration or joint-venture requirements, nationality 
requirements, concession requirements, numerical quotas, or obligation to establish a commercial 
presence.  Such reservations have been listed, for instance, by Chile, Costa Rica, El Salvador, 
Guatemala, Honduras, Japan, Korea, Mexico, Nicara gua, Panama, Peru, Singapore, and Switzerland.  
Moreover, horizontal reservations c oncerning "public services" or "public utilities" are likely to affect 
infrastructure environmental services as well.  All these different reservations focus on public utilities, 
which implies that PTA disciplines arguably apply to  services supplied to private customers (such as 
industry and commercial establishments).  Mo reover, very few negative-list PTAs contain 
reservations affecting the "other" environmental services, i.e. cleaning services of exhaust gases, noise abatement services, nature and landscape protection services and other environmental protection services n.e.c.  
_______________ 
  S/C/W/320 
 Page 29 
 
 
  REFERENCES 
 
 Cossy M., Water Services at the WTO , in "Fresh Water and Interna tional Economic Law", edited by 
E. Brown Weiss, L. Boisson de Chazournes and N.  Bernasconi-Osterwalder, Oxford University Press, 
2005 (Cossy, 2005) 
 Dihel N.C., Understanding Trade in Environmental Services:  Key Issues and Prospects , in 
"International Trade in Services: New Trends a nd Opportunities for Developing Countries", edited by 
O. Cattaneo, M. Engman, S. Sáez, and R. Stern, World Bank, 2010 (Dihel, 2010) 
 
Ferrier G., The Environmental Industry and the Prospects for Building Capacity in Developing 
Nations , in "Energy and Environmental Services  – Negotiating Objectives and Development 
Priorities", UNCTAD, 2003 (Ferrier, 2003)  
ICRIER, Trade in Environmental Services:  Opportunities and Constraints , by A. Sawhney and R. 
Chanda, WTO Research Series No. 3, New Delhi, 2004 (ICRIER, 2004)  Kessides I., Reforming Infrastructure – Privatiz ation, Regulation and Competition , World 
Bank/Oxford University Press, 2004 (Kessides, 2004)  
Kennett M. and R. Steenblik, Environmental Goods and Services – A Synthesis of Country Studies , in 
"Trade That Benefits the Environmental and De velopment – Opening Markets for Environmental 
Goods and Services", OECD, 2005 (Kennett & Steenblik, 2005) 
 Marchetti J.A. & M. Roy, Services Liberalization in the WTO and in PTAs , in "Opening Markets for 
Trade in Services – Countries and Sectors in Bilateral and WTO Negotiations", CUP/WTO, 2008 
(Marchetti & Roy, 2008)  OECD, Infrastructure to 2030:  Mapping Policy for Electricity, Water and Transport , vol. 2, OECD 
2007 (OECD, 2007)  
OECD, Managing Request-Offer Negotiations Under the GATS:  The Case of Environmental 
Services , OECD Trade Policy Working Paper No. 11, by M. Geloso-Grosso, 
TD/TC/WP(2004)8/FINAL, 15 February 2005, (OECD, 2005)
37 
 OECD/Eurostat, The Environmental Goods & Services Indus try – Manual for Data Collection and 
Analysis , OECD/Eurostat, 1999 (OECD/Eurostat, 1999) 
 Prasad H.A.C. & R. Sathish, Policy for India's Services Sector , Working Paper No. 1/2010-DEA, 
Department of Economic Affairs, Ministry of Fi nance, Government of India, March 2010 (Prasad & 
Sathish, 2010)  
Sawhney A., Building Supply Capacity for Environmental S ervices in Asia – The Role of Domestic 
and Trade Policies , ICTSD Trade and Environment Series Issue Paper No. 5, International Centre for 
Trade and Sustainable Development, Geneva, 2007 (Sawhney, 2007)  Selwyn J. & B. Leverett, Emerging Markets in the Environmental Sector , UK Center for Economic 
and Environmental Development, report prepared  for the Department of Trade and Industry, 
November 2006 (Selwyn & Leverett, 2006) 
                                                     
 
37 This Note was presented to the Council for Trade in Services – Special Session in June 2005 (see 
TN/S/M/15). S/C/W/320 
Page 30  
 
   
Sinclair-Desgagné B., The Environmental Goods and Services Industry , International Review of 
Environmental and Resource Economics, 200 8, 2: 69-99 (Sinclair-Desgagné, 2008) 
 Steenblik R., D. Drouet, & G. Stubbs, Synergies between Trade in Environmental Services and Trade 
in Environmental Goods , in "Trade That Benefits the Envi ronmental and Development – Opening 
Markets for Environmental Goods and Services" , OECD, 2005 (Steenblik, Drouet, Stubbs, 2005) 
 The Economist, Talking rubbish – A special report on waste , February 2009 (The Economist, 2009) 
 
UNCTAD, World Investment Report – Transnational Cor porations and the Infrastructure Challenge , 
2008 (UNCTAD, 2008)  United Nations Economic Commission for Europe, Guidebook on Promoting Good Governance in 
Public-Private Partnerships , United Nations, 2008 (UNECE, 2008) 
 
United Nations Human Settlements Programme (UN-Habitat), Water and Sanitation in The World's 
Cities – Local Action for Global Goals , 2003 (UN-Habitat, 2003) 
 United States International Trade Commission, Air and Noise Pollution Abatement Services:  An 
Examination of U.S. and Foreign Markets , USITC Publication 3761, April 2005 (USITC, 2005) 
 
United States International Trade Commission, Solid and Hazardous Waste Services:  An 
Examination of U.S. and Foreign Markets , USITC Publication 3679, April 2004 (USITC, 2004) 
 United States International Trade Commission, Remediation and Nature and Landscape Protection 
Services:  An Examination of U.S. and Foreign Markets , USITC Publication 3727, October 2004 
(USITC, 2004a)  World Bank, Private Participation in Infrastructure Database , PPI Date Update Note 36, May 2010, 
at http://www.ppiaf.org/ppiaf/page/private- participation-infrastructure-database
, (World Bank, 2010) 
 
WHO/UNICEF, Progress on Sanitation and Drinking Water – 2010 Update , World Health 
Organization and UNICEF, 2010, (WHO/UNICEF, 2010)  Zarrilli S., International Trade in Environmental Services and The Developing Countries , in "Energy 
and Environmental Services – Negotiating Objec tives and Development Priorities", UNCTAD, 2003, 
(Zarrilli, 2003) 
  
_______________ 
  
   S/C/W/320
 Page 31APPENDIX 1 
 
Main forms of private sector invo lvement in infrastructure services  
  
Form of 
involvement Ownership 
of assets Operation Comment 
 
Service contract  
Public, partly 
private Private sector must performs specifi c tasks for which it is paid a predetermined fee.  Used to carry out 
technical tasks and tap privat e sector expertise.  Duration:  6 months to 2 years. 
Management contract Private sector is responsible for operating and managing the infrastructure, normally against the payment o f a 
fee paid by the public authority.  Duration:  3 to 5 years. 
Lease contract The government leases the assets to a privat e firm which takes the operationa l risk and recoups costs from 
end-users. 
Concession  
 
 
 
Public  
 
 
Private 
Private firm takes full responsibility for operating and ma intaining the infrastructure.  It must upgrade and 
expand the infrastructure, as needed.  It provides the se rvice to end users against the payment of a fee paid by 
the users.  Duration:  20 to 30 years. 
Build, operate, 
transfer (BOT) or build, own, operate 
and transfer (BOOT)  
Private, then 
public  
Private, then 
public Private sector builds and operates the facility at its own risks.  During the contract, the builder-operator 
provides the service.  The investor is entitled to a fee paid by the government for the work and the provision of the service.  It may also include a fee paid directly by users.  At the end of the contract, the facility reverts 
to the government.  Duration:  10 to 20 years. 
Joint ownership Public and 
private Public and private The facility is owned jointly by two or more entities, public or private.  The various entities are co-
responsible for building, maintaining, expanding the assets, and for delivering the service. 
Build, own, operate (BOO) The investor builds, owns and operates the facility.  The government guarantees a minimum revenue. 
Divestiture of assets  
Private  
Private 
Ownership of assets are transferred to a private investor, which is then in charge of operating, maintaining 
and expanding it.  Private sector becomes fully accountable. 
 
Based on:  UNCTAD, 2008;  UNECE, 2008;  Geloso Grosso, 2007;  Kessides, 2004. 
 This Table is an attempt to categorize the main forms of private sector involvement in the supply of infrastructure services.  There are, however, a number of other variants, e.g. 
Buy-Build-Operate (BBO), Build-Lease-Operate-Transfer (BLOT), Desi gn-Build-Finance-Operate (DBFO), etc.  The main difference be tween these various contracts lies in the 
allocation of risks and responsibilities between the public and the pr ivate operator.  There is no agreed categorization of the se contractual arrangements, and their content can 
differ in practice.  For instance, some consider that concessions do not form a separate type of contract, but are a generic te rm covering the different kinds of PPPs.  Also, the 
concept of public-private partnership may be used as a generic term for any agreement between a public entity and a private ope rator, or is restricted to  some specific contractual 
forms.  Moreover, these forms are not mu tually exclusive and can be combined. 
 
From a GATS point of view, an important question is whether some of these contractual arrangements would fall under the definit ion of government procurement (Article XIII) 
and, thus, would not be covered by specific commitments and the MFN obligation. 
 
_______________  
 S/C/W/320 
Page 32  
 
  APPENDIX 2 
 
Comparison between CPC prov. and CPC version 2
 
  
CPC prov. CPC version 2 
94/940 Sewage and refuse disposal, sanitation 
and other environmental protection 
services 
 94  Sewage and waste collection, treatment and disposal 
and other environmental protection 
services 
9401 Sewage services 941 Sewerage, sewage treatment and septic tank 
cleaning services 
Sewage removal, treatment and disposal services.  
Equipment used are waste pipes, sewers or drains, 
cesspools or septic tanks 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). 9411 Sewerage and sewage treatment services 
94110 Sewerage and sewage treatment services 
This subclass includes: 
- sewage removal services usually provided using 
equipment such as waste pipes, sewers or 
drains, - sewage treatment services using dilution, screening and 
filtering, sedimentation, chemical 
precipitation, etc. This subclass does not include: 
- collection or purification of water, cf. 18000 
- construction, repair and alteration of sewers and sewer pipelines, cf. 54241, 54251, 
- distribution of water through mains on own account, cf. 
69210, 
- distribution of water through mains on a fee or contract 
basis, cf. 86330. 
9412 Septic tank emptying and cleaning services 
94120 Septic tank emptyin g and cleaning services 
This subclass includes: 
- emptying and cleaning of cesspools and septic tanks, 
- servicing of chemical toilets. 
 
9402 Refuse disposal services 942 Waste collection services 
Refuse collection and disposal services.  Collection services of garbage, trash, rubbish and 
waste, whether from households or from industrial 
and commercial establishm ents, 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 ar e classified in division 
85. 
 Regulatory administrative services by the 
government related to environmental issues are 
classified in subclass 91123 (Administrative 9421 Collection services  of hazardous waste 
94211 Collection services of hazardous medical and 
other biohazardous waste 
This subclass includes: 
- waste collection specifically designed for the collection 
of: 
• pathological wastes such as anatomical wastes, non-anatomical wastes, sh arp wastes, such as 
syringes and scalpels, 
• other biological-infectious wastes from hospitals, medical practices, dental pract ices, medical laboratories, 
• other biohazardous wastes from non-residential 
locations. 
94212 Collection services of  industrial hazardous waste 
(except medical and other biohazardous waste) 
This subclass includes: 
- waste collection from indust rial locations specifically 
designed for the collection of: • hazardous wastes (excep t medical and biological) 
including materials that may be  hazardous to human health 
or the environment and that  require special handling  S/C/W/320 
 Page 33 
 
 
  CPC prov. CPC version 2 
housing and community amenity services), 91131 
(Administrative agriculture, forestry, fishing and 
hunting related services) and 91132 
(Administrative fuel and energy related services). techniques specified by legislation or regulation. 
94219 Collection services of other hazardous waste 
This subclass includes: 
- waste collection from non-industrial locations specifically designed for the collection of: 
• hazardous waste including materials that may be 
hazardous to human health or the environment that require special handling techniques 
specified by legislation or regulation. 
9422 Collection services of  non-hazardous recyclable 
materials 
94221 Collection services of  non-hazardous recyclable 
materials, residential 
This subclass includes: 
- waste collection specifically designed for the collection 
of non-hazardous recycl able materials: 
• whether presorted or commingled waste, such as 
cardboard, paper, plastic, glass, aluminium, 
steel and organic yard waste from residential locations, 
including curbside collection, back 
door collection or automated collection on a flexible or regular schedule. 
94229 Collection services of  non-hazardous recyclable 
materials, other 
This subclass includes: 
- waste collection specifically designed for the collection 
of non-hazardous recycl able materials: 
• whether presorted or commingled, such as cardboard, 
paper, plastic, glass, aluminium, steel, 
and other recyclable materials from non-residential locations, on a regular or flexible schedule. 
9423 General waste collection services 
94231 General waste collection services, residential 
This subclass includes: 
- general collection of waste, garbage, rubbish, refuse, 
trash, and commingled materials from residential locations, including curbside collection, back 
door collection, or automated collection on a flexible or 
regular schedule 
94239 General waste coll ection services, other 
This subclass includes: 
- general collection of waste, garbage, rubbish, refuse, 
trash, and commingled materials from non-residential 
locations, on a regular or flexible schedule.  
[Part of 9402] 943 Waste treatment and disposal services 
 9431 Waste preparation, consolidation and storage 
services 
94311 Hazardous waste preparation, consolidation and storage services 
This subclass includes: 
- consolidation, temporary storage, and preparation of hazardous waste 
- consolidation and preparation of hazardous waste for 
transportation to an appropriate facility that processes waste 
 S/C/W/320 
Page 34  
 
  CPC prov. CPC version 2 
- services of drop-off cent res, transfer stations and 
container stations 
94312 Ship-breaking  and other dismantling of wrecks 
services 
This subclass includes: 
- ship-breaking, 
- dismantling of wrecks, such as cars, computers etc., in order to obtain and separate recoverable 
materials. 
This subclass does not include: - dismantling of wrecks, such as cars etc., to obtain items 
for sale, cf. corresponding subclass in division 61 or 62 
94313 Non-hazardous recyclable materials 
preparation, consolidatio n and storage services 
This subclass includes: 
- consolidation, temporary storage and preparation of non-hazardous recyclable materials 
- transfer facility services of non-hazardous  recyclable 
materials 
- recovery and preparation of  non-hazardou s recyclable 
materials, such as bailing, cleaning, sorting, volume reduction and similar preparation and 
consolidation of recycl able materials, for 
transportation to an appropriate facility that processes recyclable materials. 
94319 Other non-hazardou s waste preparation, 
consolidation and storage services 
This subclass includes: 
- consolidation, temporary storage and preparation of non-
hazardous waste, - transfer facility services  for non-hazardous waste, 
- consolidation and preparatio n of non-hazardous waste for 
transportation to an appropriate facility that processes waste. 
9432 Hazardous waste treat ment and disposal services 
94321 Hazardous waste treatment services 
This subclass includes: 
- treatment to reduce, elimin ate, or transf orm hazardous 
waste. Processes include bi ological, chemical, and/or 
physical procedures or incineration. These procedures may 
lead to a disposable residual or result in the recovery of a 
recyclable material. 
94322 Hazardous waste disposal services 
This subclass includes: 
- disposal services for hazar dous waste at a facility that 
meets legal standards for the disposal of hazardous waste, 
such as at approved controlled containment facilities or landfills 
9433 Non-hazardous waste treatment and disposal 
services 94331 Sanitary landfill serv ices, non-hazardous waste 
This subclass includes: 
- disposal of non-hazardous waste on or in a sanitary 
landfill which meets the sanitary landfill 
criteria specified by legislation or regulation, i.e. designed 
to prevent leaking etc.   S/C/W/320 
 Page 35 
 
 
  CPC prov. CPC version 2 
94332 Other landfill servic es, non-hazardous waste 
This subclass includes: 
- disposal of non-h azardous waste on or in landfills other 
than a sanitary one. 
94333 Incineration of non-hazardous waste 
This subclass includes: 
- incineration of non-hazardous waste in a facility that meets legal standard and requirements for 
incineration of non-hazardous waste. 
94339 Other non-hazardous waste treatment and 
disposal services 
This subclass includes: 
- other non-hazardous waste disposal services, such as: • services of chemical or biological reduction of 
agricultural waste and similar treatment 
services.  
9403 Sanitation and similar services 945 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).  9451 Sweeping and snow removal services 
94510 Sweeping and snow removal services 
This subclass includes: 
- street sweeping an d cleaning services 
- gritting and salting of roads - snow ploughing and removal 
- runway sweeping and snow removal services 
- runway vacuuming services 
9459 Other sanitation services 
94590 Other sanitation services 
This subclass includes: 
- beach cleaning services 
- drain unblocking services. 
This subclass does not include: - disinfection and extermination services for buildings and 
other non-agricultural structures, cf. 85310 
- pest control services in connection with agriculture, cf. 86119 
 
9404 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. 
 [Correspondence proposed via CPC 1.1 indicates CPC 2 
944 (Remediation services) and 949 (Other environmental 
services)] 
9405 Noise abatement services  
Noise pollution monitoring, control and abatement 
services, e.g. traffic- related noise abatement 
services in urban areas. 
 [Correspondence proposed via CPC 1.1 indicates CPC 2 
944 (Remediation services) and 949 (Other environmental 
services)] S/C/W/320 
Page 36  
 
  CPC prov. CPC version 2 
9406 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 cl assified in group 881 
(Services incidental to agriculture, hunting and forestry). 
 [Correspondence proposed via CPC 1.1 indicates CPC 2 
944 (Remediation services) and 949 (Other environmental 
services)] 
 944 Remediation services 
[CPC 9404, 9406 and 9409 would seem to be covered, at least partly, under CPC 2 944 
(remediation services).] This group includes remediation services, i.e. services 
dealing with the effects of contamination 
caused by operation of fac ilities or by accidents. These 
services aim to eliminate or contain any existing contamination of the soil, water or air and have to 
be performed on site. 
9441 Site remediation and clean-up services 
94411 Site remediation a nd clean-up services, air 
This subclass includes: 
- services involved in implem enting approved plans for the 
remediation of air on a contaminated 
site, that meet requirements specified by legislation or 
regulation. 
94412 Site remediation and clean-up services, surface 
water 
This subclass includes: 
- services involved in implem enting approved plans for the 
remediation of surface water on a 
contaminated site, that meet  requirements specified by 
legislation or regulation. 
94413 Site remediation and clean-up services, soil and 
groundwater 
This subclass includes: 
- services involved in implem enting approved plans for the 
remediation of soil and groundwater 
on a contaminated site, that meet requirements specified 
by legislation or regulation. 
9442 Containment, control and monitoring services 
and other site remediation services n.e.c. 
94420 Containment, control and monitoring services 
and other site remediation services n.e.c. 
This subclass includes: 
- services involved in preventing additional or wider contamination on the site, 
- preventing the movement of uncontrolled contaminates 
from the site, - monitoring the site to determine the effectiveness of 
remediation activities 
- controlling access to the contaminated site - other site remediation services, n.e.c.  S/C/W/320 
 Page 37 
 
 
  CPC prov. CPC version 2 
9443 Building remediation services 
94430 Building remediation services 
This subclass includes: 
- development and implementation of a remediation plan that removes, destroys, contains or otherwise reduces 
contaminants in buildings, su ch as asbestos, lead, radon 
etc. 
9449 Other remediation services n.e.c. 
94490 Other remediation  services n.e.c. 
This subclass includes: 
- environmental emergency response services, 
- other remediation services, n.e.c. 
 
9409 Other environmental protection 
services n.e.c . 949 Other environmental prot ection services n.e.c. 
Other environmental protection services not 
elsewhere classified, e. g. acidifying deposition 
("acid rain") monitoring, controlling and damage 
assessment services. 9490 Other environ mental protection services n.e.c. 
94900 Other environmental pr otection services n.e.c. 
This subclass includes: 
- acidifying deposition (i.e., acid rain) monitoring, 
controlling and damage assessment services, - other environmental protection services not elsewhere 
classified. 
 
  
 
_______________ 
 
 S/C/W/320 
Page 38  
 
  APPENDIX 3 
 
OEC/Eurostat
 
 
The Environmental Goods and Services Industr y – Manual for Data Collection and Analysis  
 
Explanatory Notes on the Classification of th e Environmental Goods and Services Industry 
 
 A.  The "POLLUTION MANAGEMENT" Group 
 
Environmental equipment and specific materials  
 
[...]  Environmental services  Air pollution control 
This class includes any activity that designs, mana ges systems or provides other services for the 
treatment and/or removal of exhaust gases and par ticulate matter from both stationary and mobile 
sources. 
 
Wastewater management 
This class includes any activity that designs, opera tes systems or provides other services for the 
collection, treatment and transport of wastewater and cooling water. It includes design, management or other services for sewage treatment systems, wastewater reuse systems, and water handling 
systems. 
 
Solid waste management 
This class includes any activity that designs, opera tes systems or provides other services for the 
collection, treatment, management, transport, st orage and recovery of hazardous and non-hazardous 
solid waste. It includes design, management or othe r services for waste handling (collection, transport, 
separation, sorting and disposal), operation of sit es, recycling (including collection of waste and 
scrap), operation of recycling plants. It includes ser vices for outdoor sweeping and watering of streets, 
paths, parking lots, etc. Services for the treatment of low-level nuclear waste are included. It excludes 
services for the treatment of high-level nuclear w aste. It excludes services for the manufacture of new 
materials or products from waste or scrap and th e subsequent use of these materials or products. 
 
Remediation and clean-up of soil, surface water and groundwater 
This class includes any activity that designs, manage s systems or provides other services to reduce the 
quantity of polluting materials in soil and water, including surface water, groundwater and seawater. It 
includes cleaning-up systems either in situ or in appropriate installa tions, emergency response and 
spills clean-up systems. Treatment of water and dredging residues are included. 
 
Noise and vibration abatement 
This class includes any activity that designs, manage s systems or provides other services to reduce or 
eliminate the emission of noise and vibration, bot h at source and dispersed. It includes design, 
management or other services for acoustic and soundproof screens and street covering. 
 
Environmental R&D 
This class includes any systematic and creative activ ity concerned with the generation, advancement, 
dissemination and application of scientific and t echnological knowledge to reduce or eliminate 
emissions in all environmental media and to  improve environmenta l quality. It includes non- S/C/W/320 
 Page 39 
 
 
  technological research to improve knowledge on ecos ystems and the impact of human activities on 
the environment.  
Environmental contracting and engineering 
This class includes any activity that investigat es feasibility, designs and manages environmental 
projects not included elsewhere. It includes multidisciplinary environmental contracting and 
engineering. Environmental management consu lting, other environmental consulting services and 
environmental audit services are included.  
Analytical services, data collection, analysis and assessment 
This class includes any activity that designs, mana ges systems or provides other services to sample, 
measure and record various characteristics of envi ronmental media. It includes monitoring sites, 
operating both singly and in networ ks, and covering one or more environmental medium. Health, 
safety, toxicology studies and analytical labor atory services are included. Weather stations are 
excluded. 
 
Education, training, information 
This class includes any activity that provides envi ronmental education or training or disseminates 
environmental information and which is executed by  specialised institutions or other specialised 
suppliers. It includes education, training and in formation management for the general public, and 
specific environmental workplace education and trai ning. The activities of the general educational 
system are excluded. 
 
Other 
This class includes any activity that provides serv ices to measure, prevent, limit or correct 
environmental damage to air, water and soil, as well as problems related to waste, noise and eco-
systems, not included in any other class ( e.g. general public administration, if it provides specific 
environmental services not elsewhere classified). These activities should be separately specified and 
listed.  
Construction and installation 
This class includes any activity for the construction and installation of fac ilities for: air pollution 
control; wastewater management; solid waste mana gement; remediation and clean-up of soil, surface 
water and groundwater; noise and vibration abatem ent; environmental monitoring, analysis and 
assessment; other environmental facilities.   
Source :  OECD/Eurostat, 1999 
 
 
_______________ 
  S/C/W/320 
Page 40  
 
  APPENDIX 4 
 
Overview of specific commitments  
 
 
Other Members Sewage 
services 
 Refuse 
disposal 
services 
 Sanitation 
& similar 
services Cleaning 
services 
of 
exhaust 
gases Noise 
abatement 
services Nature & 
landscape 
protection 
services Other env. 
protection 
services 
n.e.c. 
Albania X X X X X   
Armenia X X X X X X  
Australia X X X     
Austria X X X X X X X 
Bulgaria X X X X X X  
Cambodia X X X X X X X 
Canada X X X X X X X 
Cape Verde X X X X X X X 
Central 
African Rep.        
X 
China X X X X X X X 
Colombia       X 
Croatia X X X X X X X 
Czech Rep. X X X     
Ecuador X X X X X X X 
El Salvador    X X X X 
Estonia X   X X X X 
EC-12 X X X X  X X 
Finland  X  X X X X 
FYR 
Macedonia X X X  
X  
X  
X  
Gambia X  X     
Georgia X X X X X X X 
Guinea X  X     
Hungary  X X     
Iceland X X X X X X X 
Israel X X X X X   
Japan X X X X X X X 
Jordan   X X X  X 
Korea RP X X  X X X X 
Kuwait X X X     
Kyrgyz Rep. X X X X X X X 
Latvia X X X X X X X 
Lesotho X X X X X X  
Liechtenstein X X X X X X X 
Lithuania X X X X X X X 
Moldova X X X X X X X 
Morocco X X X X X X X 
Nepal X X X     
Norway X X X X X X X 
Oman X X X X X X X 
Panama    X X X  
Poland    X X   
Qatar X X X X X X X 
Romania    X X X X  S/C/W/320 
 Page 41 
 
 
  Other Members Sewage 
services 
 Refuse 
disposal 
services 
 Sanitation 
& similar 
services Cleaning 
services 
of 
exhaust 
gases Noise 
abatement 
services Nature & 
landscape 
protection 
services Other env. 
protection 
services 
n.e.c. 
Rwanda   X     
Saudi Arabia X X X X X X X 
Sierra Leone X X X X X X X 
Slovak Rep. X X X     
Slovenia X X X  X   
South Africa X X X X X X  
Sweden X X X X X X X 
Switzerland X X X X X X X 
Chinese Taipei X X X X X X X 
Thailand X X X X X X X 
Tonga X X X X X X X 
Turkey X X X     
Ukraine X X X X X X X 
United Arab 
Emirates X X X  
X  
X  
X  
X 
USA X X X X X X X 
Viet Nam X X  X X  X 
        
Total 49 48 49 46 46 41 39 
 
 
_______________ 
 
 S/C/W/320 
Page 42  
 
  APPENDIX 5 
 
Environmental services – Selected Members
 
 
Comparison between GATS and "best" RTA commitments   
 
 
 MEMBER GATS "BEST" RTA 
Argentina  0 62.5 
Australia  50 100 
Bahrain  50 100 
Brazil  0 31.25 
Chile  0 25 
China  50 53.125 
Colombia  0 50 
Costa Rica  0 100 
Dominican Republic  0 75 
El Salvador  6.25 100 
European Union  71.875 73.4375 
Guatemala  12.5 100 
Honduras  0 50 
Iceland  25 25 
India  37.5 37.5 
Indonesia  0 0 
Japan  50 75 
Jordan  37.5 43.75 
Korea  50 62.5 
Liechtenstein  43.75 43.75 
Malaysia  0 0 
Mexico  12.5 100 
Morocco  50 75 
New Zealand  50 100 
Nicaragua  0 25 
Norway  81.25 87.5 
Oman  75 100 
Panama  62.5 87.5 
Paraguay  0 25 
Peru  12.5 100 
Philippines  6.25 6.25 
Singapore  25 75 
Switzerland  50 50 
Chinese Taipei  75 75 
Thailand  31.25 31.25 
United States  100 100 
Uruguay  0 31.25 
 
Source :  Marchetti and Roy, 2008.  Dataset of services commitments in regional trade agreements (RTAs) available 
at http://www.wto.org/english/tratop_e /serv_e/dataset_e/dataset_e.htm . 
 
Note :  The index score is brought within a scale of 0 to 100 for each sector, w ith 100 representing full commitments 
(i.e., without limita tions) across all relevant sub-sectors.  " GATS" reflects the index value for both GATS 
commitments and services o ffers in the ongoing Doha Development Age nda.  "RTA" reflects the index value for a 
Member's "highest" RTA commitments across all RTAs concluded, for each sub-sector.  The index value is for both 
mode 1 (cross-border trade) and mode 3 (commercial pres ence).  The score for EU commitments is the one for the 
EU-15.  For more information on the index and its interpretation, see Marchetti and Roy, 2008. 
 
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