Environmental goods are typically non-market goods, including clean air, clean water, landscape, green transport infrastructure, public parks, urban parks, rivers, mountains, forests, and beaches. Environmental goods are a sub-category of public goods. Concerns with environmental goods focus on the effects that the exploitation of ecological systems have on the economy, the well-being of humans and other species, and on the environment. Users not having to pay an upfront cost and external factors like pollution that can damage environmental goods indefinitely are some of the challenges in protecting environmental goods.
Valuation
There have been many efforts to place an economic value on environmental goods, but no consensus yet exists on the method of valuation. The challenges in the way of obtaining these economic values include the free-rider problem, difficulties in assigning ownership, and the non-divisibility of environmental goods.
Methods
Assigning a willingness to pay to environmental goods is one method that economists use to try to assess their value. Small scale simulated markets have been used in conjunction with contingent valuation methods in order to assess the relative values of economic goods, as well as to attempt to assign them dollar values. Other studies criticize these methods for expecting an unrealistic amount of mental effort on the part of the subjects who are asked to assign values, as well as for introducing framing effects and inherent biases relating to subjects' perceptions of dollar values.
In trade documents released by the United States, "environmental good" primarily refers to goods that are used for preserving the environment, such as renewable energy technologies and pollution management systems. In 2015, the U.S. exported $238 billion of environmental goods, while trading among nations globally of environmental goods totaled around $1 trillion. The United States and the World Trade Organization and aims to lower tariffs on environmental goods in hopes of increasing the United States' access to more sustainable technology.
Environmental Goods Agreement
Delegates from 17 members of the WTO have been negotiating the Environmental Goods Agreement in hopes of cutting tariffs on many environmental goods. The negotiation aims to increase the transfer of technologies which are cleaner for the environment and more cost competitive, including technologies in the realm of air pollution control, waste treatment, renewable energy, and environmental monitoring, and energy efficiency. The WTO hopes to provide higher-quality environmental goods at cheaper costs and to help developing countries to expedite the process of obtaining cleaner technologies. This agreement also aims to lower costs of environmental protection, and to provide "green" jobs to people around the world.
