WORLD TRADE  
ORGANIZATION  TN/TE/W/60 
19 September 2005 
 
 (05-4117) 
Committee on Trade and Environment 
Special Session Original:   English 
 
 
 
PROCEDURAL AND TECHNICAL ASPECTS OF THE ENVIRONMENTAL  
PROJECT APPROACH 
 
Submission by India  
 
Paragraph 31 (iii)  
 
 
 The following communication, dated 16 September 2005, is being circulated at the request of the Delegation of India
.  
 
_______________ 
 
 
I. BACKGROUND 
1. In fulfilment of the Doha Mandate and to ach ieve the sustainable development goals as 
enshrined in the WTO preamble and the Millennium  Development Goals, we have proposed an 
alternate approach to the present negotiations under Pa ragraph 31(iii).  This alternate approach, called 
"Environmental Project Approach", provides fo r tariff reductions on g oods and appropriate 
concessions on services included in specific environmenta l projects.  The objective of the approach is 
to address the environmental as well as developmen tal goals of the Doha Development Agenda 
through trade liberalization.  The approach is need-based and objective-or iented, and brings in 
positive measures like capacity building and transfer of technology.  It also addresses diversity in 
environmental standards with common and differen tiated responsibilities, giving policy space to the 
national governments.  This framework is particular ly crucial for developing countries in the present 
negotiations.   
2. The approach envisages bringing environmental gains in a focused, direct and quantifiable 
manner through appropriate market access in environm ental goods and services in a composite way.  
The project approach substantially deepens and enriches the mandate of the Doha Ministerial 
Declaration to not only include market access but also to provide scope fo r developing countries to 
develop capacities and achieve national environmental pr iorities.  It also brings in synergy between 
environmental goods and services, crucial fo r the benefit of developing economies.   
3. Two submissions have previously been made to the CTESS1 explaining the key elements of 
the project approach.  This submission, besides el ucidating on some of the positive measures of the 
project approach, seeks to addresses some technical  and procedural aspects of the approach.   
 
                                                      
1 TN/TE/W/51 and TN/TE/W/54. TN/TE/W/60 
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 II. SOME POSITIVE ELEMENTS OF THE PROJECT APPROACH 
4. One of the important elements of the project  approach, as already stated, is the synergy 
between environmental goods and services.  The pr oject approach recognizes this market trend and 
builds on it.  Environmental products and related t echnological services are frequently provided on an 
integrated basis commercially.  Firms bring toge ther "horizontally" the range of materials and 
expertise to undertake an environmental project.  They also associate "vertically" with firms 
specializing in different sectors.  In the project  approach, firms can procure goods and services from 
wherever they can access them at reasonable prices, on a comparative advantage basis;  thus ensuring 
a gain in market access for world trade.  Furthe r, since these goods and services are being procured 
for a particular environmental project, the objectiv es of environmental benefit are addressed in a 
cohesive, focused, direct and integrated manner.   
5. The project approach has been built on deve loping the mutual supportiveness of trade and 
environment.  It is not a question of being import or iented or export oriented;  rather it is impact 
oriented.  Such direct impact on environment woul d not only improve the environmental performance 
of local industries but would also increase a co untry’s attractiveness for other foreign direct 
investment, while bringing benefits to the e nvironment and health of the population.   
6. Another important aspect of the project approach  is to provide a framework for transfer of 
technology and for its adaptation by the developing countries.  Development of technological capacity 
is a determining factor for building competitiveness of firms in developing countries;  inextricably 
linked to this are the managerial or organiza tional factors and the management of technologies 
themselves.  The project approach provides a fram ework by which these tools of technology transfer 
and adaptation (which can include design and manufacture, import of technical capital goods, 
management contractors, technical service contractor s and other important methods) could be used to 
create forward and backward linkages with local  firms and thereby increase their capacities for 
present and future market access.  Such increase d local capacity to produce goods and provide 
services under this multilateral negotiation would tr anslate into increased export opportunities.   
7. Non-tariff barriers are an important issue of the paragraph 31(iii) mandate.  These are often 
intractable.  The project approach can prove an e ffective mechanism for reduction or elimination of 
such barriers in respect of identified good s and services in an approved project.   
8. In the project approach, goods  and services required for the e nvironmental project would be 
provided adequate market access.  These goods and ser vices will have direct use and can be related to 
the environmental objective for which they are being given market access.  This brings in the crucial 
aspect of transparency in the ma rket access.  Since a project will be determined to have an 
environmental benefit at the nationa l level, this approach also takes into account the diversity of 
environmental absorptive capacities of the WTO Member s.  The "list approach", in comparison, gives 
market access to a number of goods , which have dual or multiple uses.  In most cases this aspect of 
dual or multiple uses is intrinsic to these goods and ca nnot be altered.  This brings unpredictability to 
the outcome of the negotiations (whether we are able to achieve the environmental objective of 
Paragraph 31(iii) negotiations or not ) and so, the results would not be transparent.  The project 
approach, on the other hand, envisages reduction or elimination of tariffs on goods and services 
required for an approved project.  Since these goods are required for the project which is aimed at addressing an environmental objective, the question of dual or multiple use of these items is either nil or, at least, minimized.  Any subsequent appraisal can also establish the contribution of these goods in 
addressing environmental objectives, which in itself brings predictability and transparency to the 
exercise.    TN/TE/W/60 
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 III. DNA TO FACILITATE TRADE AND ENVIRONMENT  
9. The project approach envisages the creation of  a Designated National Authority in every 
Member country.  The DNA may comprise, for example, representatives from government, private sector, civil society or any other entities deemed appr opriate by national governments.  While it is for 
each country to determine the actual functioning of th e DNA, we have envisaged that the role of the 
DNA would be to appraise the proposals.  This appr aisal would be technical and would be done in a 
specified period of time.  Details that would be provided in any proposal would include the quantity 
and the tariff line of each of the goods required fo r the project.  Similar information for services can 
also be provided in the same proposal.  The role  of the DNA would be to see that the information 
provided in the proposal is appropriate for achieving the objectives of the project.  In case of 
non-approval of a project proposal, reasons for the same would be conveyed to the proposer, along 
with appropriate details, to bring greater transparency  and predictability to the exercise.  A fast-track 
approval process could be devised for SMEs.   
10. Over a period of time, the DNA could perform the function of a nodal information point for 
all aspects of trade in environmental goods and servi ces involved in environmental projects.  For the 
purpose, it could maintain a data base of the approved environmental projects with a complete list of 
goods and services included in them.  This would not only provide useful guidance to the project proposers but would also contribute to facilitating trade and building institutional memory.  An 
effective consultation mechanism could be built into the process.  The advantages of this approach in 
bringing into focus the environmental objectives would clearly outweigh any additional procedural requirements necessitated in achieving these transparen cy and predictability functions of the DNA.   
IV. ORGANIZATIONAL AND FUNCTION AL LINKAGE WITH THE WTO 
11. The Project approach envisages a definite a nd clear-cut role for the CTESS.  The CTESS 
provides the negotiating forum for agreeing on the approach to achieving the mandate of 
Paragraph 31(iii).  Common responsibilities of the Me mber countries can be in terms of the objectives 
of the WTO and the various MEAs
2, for bringing in greater cohesiveness between trade and 
environment.   
12. The issues and questions addressed above are intende d to bring more clarity to the working of 
the project approach.  We feel that the project  approach addresses the mandate more appropriately 
than the "list approach".  Member countries are invited to deliberate on both the structural and 
substantive dimensions of the project approach so  as to fulfil the mandate of Paragraph 31(iii).  We 
ourselves look forward to contributing further in this regard.  
__________ 
                                                      
 2 For examples of environmental objectives see Paragraph 14 of TN/TE/W/51.