Draft Guideline for Environment Impact Assessment of Trade Policy in China Hu Tao Policy Research Center for Environment and Economy, SEPA, CHINA Mao Xianqiang School of Environment, Beijing Normal University Prepared for OECD WORKSHOP ON REGIONAL TRADE AGREEMENTS AND THE ENVIRONMENT June 19-20, 2007

2 Outline Necessities of EIA on Trade policy 2 Key points in the EIA guideline Capacity building needed

3 Necessities From China s practices To understand better the environmental implication of China s accession to WTO To ensure the environment is part of China s national interests of WTO Doha round negotiation To unveil the environmental problems and benefits of FTA/RTA negotiation To realize environmental problems resulted from domestic internal trading To achieve environmental goals by trade measures, together with consumption measures and production measures To adjust sector trade policies which are environmentally harmful To achieve sustainable trade by greening current trade policy In a word, trade policy EIA is the fundamental basis of any trade policy adjustment towards sustainable development

4 Necessities From international experiences OECD, RTA EU, SIA UNEP, IA Canada, SEA US, ER An EIA on trade policy (RTA, WTO, sector trade etc) is needed From legal perspective China s EIA Act We SEPA are authorized to do EIA at Project level and planning level EIA on policy is needed Trade policy is a pilot phase of policy EIA

5 Key points in the EIA guideline Mechanism of trade affecting environment Direct effects Environmental regulation effect Technology diffusion effect EGS effect Environmental bads/services effect

6 Key points in the EIA guideline Mechanism of trade affecting environment Indirect effects Scale effect Composition (structure) effect Polluting industry migration in the world Carbon intensive industries shifting from Annex I to non Annex I Efficiency effect

7 Key points in the EIA guideline Measurement of trade balance accounting from environmental perspective Trade balance measured by monetary value indicator Trade balance measured by physical indicator Trade balance measured by environmental indicator (direct and indirect trade impacts) Virtual water Virtual carbon Virtual SO2 Etc

8 Capacity building needed Technical assistance of improving the guideline of trade policy EIA is needed Training is needed for EIA researchers and practitioners Legal expertise is needed to support EIA Act Revision

9 Thank you for your attention!