Guideline on Environmental Impact Assessment of Economic Partnership Agreements and Free Trade Agreements in Japan
Japanese Study Group on Environment and Economic Partnership Agreements /Free Trade Agreements
Foreword Striving to find a way to coexist and aiming for su stain able develo p ment whil e re spectin g the positio ns of trade and environ me n t i s a c r ucial issue to be tackle d. In 1994, the Wo rld Trade Organization (WTO) e s t a b l i s h e d t h e C o m mi t t e e o n T r a d e a n d Environ me nt (C TE), which h as been exa minin g t r a d e a n d e n v i r o n me n t a l i s s u e s . A t t he Fourth WTO Ministerial Con ference (Doh a, Qa tar) held in Novemb er 2 001, the Doh a Develop ment Agenda (DDA) was adopted. The DDA in corporates the issues that are to be negotiated until 2005 and “trad e and envi ron ment ” was identi fied as a n ew i ssue t o be negotiated. Further mo re, an action plan was adopted at the World Su mmit on Sustain able Develop me nt (Johanne sburg Su mmi t ) held i n 2002, wh ich include d the necessit y to pro mo te endeavors in environ me ntal i mp act assessme n ts with respect to trade and environ me n tal issue s. Meanwhile, looking at the situation in other coun tries, international o rganization s, including the Organisation for Econo mic Co-operation and Develop ment (OECD) and the United Nat ions Environ ment Pro gra mme (UNEP) a s well a s coun trie s, such as the Unit ed State s, Can ada and European Union (EU), a re wo rki ng to in sti tutionalize envi ron me n ta l asse ss ment s in free t ra d e agree me n ts (FTAs). As fo r the situation surrounding Japan, the Japan-Singapore Econo mi c Partnership Agreemen t (JSEPA) was conclud ed in Novemb er 2002 as Japan’s first bilateral free trad e agree ment (FTA). Currently, Japan has either begun or is prep arin g to hold negotiations o n Econo mic Partnership Agreemen t (EPAs) and FTAs with Mex ico, the Associa tion o f Southeast Asian Nations (ASEAN) a nd the Republic of Ko rea (ROK). In vie w o f these circu mstanc es, since the re i s a g reate r need to vig orousl y pro mo te effo rt s to ensu re t hat t rade a nd environ me n t a re mutually sup portive, it i s nece ssary to inco rpo ra t e environ men t-friendliness
t hemselves en v ir o n men t- f r ien d ly . Fro m FY20 00 to FY2 001, the Ministry o f the Environ ment co mmissioned th e Mitsubish i Resea rch Institute, In c. to condu ct a su rve y wo rk on th e environ mental i mpac t assess men ts in trade lib eralization. The re sults of the study that was conducted were co mp iled in the Report o f the Stud y Group on En viron mental I mpact Assess ments in Trade Liberalization (November 2002). Following this project, in the consideration s in FY2002, the Stud y Grou p on Environ ment and Econo mic Partnership Ag ree men ts/Fre e Tra d e Ag ree ments (Chai r : Pro fe s s o r M i t s u t s u n e YAM A G U C H I) wa s n e wl y e s tablished in the Mitsubishi Research Insti tute. This Stud y Group was co mposed pri ma ril y o f acad e mic expert s an d tasked with i n v e s t i g a t i n g t h e e n v ir o n me n t a l i mp a c t a s s e s s men t methods that would b e applied in th e event that Japan co ncluded an EPA/FTA. Considerations were also adv anced on the I
follo wing ma in issues: 1) concrete me thods to e n h a n ce t h e mu t u a l su p p o r t i v e n e s s o f t r a d e and enviro n ment, 2 ) a guideline on enviro n me n t a l i mp a c t a s s e s s me n t me t h o d s i n v o lvi ng EPAs/FTAs, and 3) i mplementatio n of case st udies. Th e case studies were con ducted based on a nu mb er of assu mptions. Case studies o n the environ mental i mp act a sse ss ments in the Japan-ROK EPA/ EPA as well as investigati ons on the applicabili ty o f th e g u ideline were conducted under th e hypothetical situ ation that an EPA/FTA is concluded b etween Japan and the ROK. This docu me n t wa s written un der the guidance of t h e Stud y Group on Environ me n t and Econo mic
Pa rtne rship
Ag ree me nts/Free
Ag re e ments
Environ ment, Govern me nt o f JAPAN. Contribut o rs to dra fting th e main doc u ments incl ude Ki i c h i ro H A YA S H I, No r i h i s a M I YA H AR A. Yo k o W A K E , Ju ng Woojon g and Naoko TAKE NAKA we re
contributo rs to the international input-outpu t analysis by th e EDEN
database. Juinich FUJINO suppo rted the drafting wo rk by conducting the AIM/CGE mo del analysis. The follo wi ng guideline su mma r iz es the resul ts of such c onsideratio ns. Origina l repo rt wa s written in Japanese (pp .149). Stud y Group on Environ ment and Econo mi c Partnership Agree me nts/ Free Trade Ag re e ments March 200 4
First pub lish ed in Japan in 2 00 4 by the Ministry o f th e Env iron men t, Govern ment of Japan Copy righ t© Ministry of th e En v iron men t Govern ment of Japan, 2 004 All righ ts reserv ed Ministry o f the Environment Government of Ja pan Add ress: No. 5 Godo chosh a, 1-2 -2 Kasu mig aseki, Ch iy oda-ku, To ky o 100-89 75 Telephon e: +81-3 -35 81-3351 E-mail: [email protected]
o.jp URL: http://www.env .go.jp /en/index.html
Mitsubishi Resea rch Institute Address: 3-6, Otemachi 2-chome Chiyoda-ku, Tokyo 100-8141, Japan
URL: http://www.mri.co.jp/E/ind ex.h tml Contact: Mr. Kiichiro HAYASHI(e-mail: maru [email protected]
CONTENTS List o f memb ers of th e Stud y Group on Env iro n men t and Econo mic Partnersh ip Agreemen ts/Free Tr ade Ag reements ................................................................... IV List o f me mb ers of the Ca se study Working Group .............................................. IV Execu tiv e Su mmary ........................................................................................... V Ch apter 1 Introdu ctio n .................................................................................... 1 1.1 Objectiv es and aims o f th e Gu id elin e ....................................................... 1 1.2 Issu es con cern ing trade and env iron men t ................................................. 1 1.3 Backgrou n d of env iro n men tal impact assessments in EPAs/FTAs ............... 2 Ch apter 2 Environ me ntal Imp act Assessme nt Guid elin e for EPAs/FTAs .................. 4 2.1 Basic con cept of environ mental impact assessmen ts in EPAs/FTAs ............. 4 2.2 Screening .............................................................................................. 5 2.3 Scop ing ................................................................................................ 5 2.4 Imp act assessmen ts ................................................................................ 7 2.5 Con sid eration o f prev entiv e and mitig ating measures .............................. 10 2.6 Con clu sion of assessment of impacts ..................................................... 10 2.7 Con cept of public inv olv ement .............................................................. 10 2.8 Exa min atio n of env iro n men tal impact assessments .................................. 11 2.9 Ex-po st ev alu ation an d follo w-u p .......................................................... 11 Ch apter 3 Case Study on Environmen tal Impact Assessment of an EPA/FTA (JapanRepublic o f Korea ex ample) .............................................................................. 12 3.1 Backgrou n d and process of cond ucting imp act assessments ...................... 12 3.2 Screening ............................................................................................ 13 3.3 Scop ing .............................................................................................. 22 3.4 Implementation o f impact assessments ................................................... 30 3.5 Con sid eration o f prev entiv e and mitig ating measures .............................. 49 Referen ce ........................................................................................................ 51
List of members o f the Study Group on Enviro nment and Economic Pa rtnership Ag reements/Free Trade Ag reements Fro m December 2002 to Ma rch 2004 Ch air Mitsu tsun e YAMAGUCHI Professor o f Keio Univ ersity Shujiro URATA Pro fessor of Wased a Un iversity Keiji OHGA Professo r o f Univ ersity of To ky o Min eo KATO Professo r o f Yokoh ama Nation al Univ ersity Junich FUJINO Nation al In stitute fo r Env iron men t Studies Shiny a MURASE Pro fessor of Sophia Univ ersity Kanji YOSHIOKA Professo r of Keio Un iversity Yoko WAKE Professo r o f Keio Un iv ersity Yo shih iko WADA Assistan t Pro fessor of Doshish a Un iversity Kiichiro HAYASHI Norihisa MIYAHARA
Project manager of th e Mitsubishi Research In stitute Research staff of th e Mitsub ishi Research In stitu te
List of members of the Ca se study Working Group Fro m March 2003 to Ma rch 2 0 04 Keiji OHGA Junich FUJINO Yoko WAKE Kiichiro HAYASHI
Professor of Un iv ersity of Toky o Nation al In stitu te for Environ men t Stud ies Pro fesso r o f Keio Un iversity Project man ag er of th e Mitsu bishi Research Institu te
Naoko TAKENAKA PhD Student of Keio University JUNG Woo jong PhD Student of Keio Univ ersity Norihisa MIYAHARA Research staff me mber of th e Mitsub ishi Research Institu te
Ex ecutiv e Summa ry At th e Fourth WTO Ministerial Conference (Doha, Qatar) held in Novemb er 2001, the Doha Develop ment Agenda (DDA) was adopted. The DDA in corporates the issues that are to be negotiated until 2005 and “trad e and envi ron ment ” was identi fied as a n ew i ssue t o be negotiated. And an action plan was ad opted at t he Wo rld Su mmit on Sust ain able Develop me nt (Johanne sburg Su mmi t ) held i n 2002, wh ich include d the necessit y to pro mo te endeavors in environ me ntal i mp act assessme n ts with respect to trade and environ me n tal issues. Then the Organ isation fo r Econo mic Co -operation and Develop ment (OECD) and the United Nat ions Environ ment Pro gra mme (UNEP) a s well a s coun trie s, such as the Unit ed State s, Can ada and European Union (EU), a re wo rki ng to in sti tutionalize envi ron me n ta l asse ss ment s in free t ra d e agree me n ts (FTAs). As fo r the situation surrounding Japan, the Japan-Singapore Econo mi c Partnership Agreemen t (JSEPA) was conclud ed in Novemb er 2002 as Japan’s first bilateral free trad e agree ment (FTA). Currently, Japan has either begun or is prep arin g to hold negotiations o n Econo mic Partnership Agreemen t (EPAs) and FTAs with Mex ico, the Associa tion o f Southeast Asian Nations (ASEAN) a nd the Republic of Ko rea (ROK).
Fro m FY20 00 to FY20 01, th e Ministry of th e Env iron ment co mmission ed the Mitsu b ish i Research Institute, Inc. to conduct a survey wo rk on the environ mental imp act assessments in trad e liberalization. Following th is, in the con sid eration s in FY200 2, th e Study Gro up on En viron men t and Eco no mic Partnership Agreements/Free Trad e Agreements was newly established in the Mitsubish i Research In stitu te to work out a guid eline on EPAs/FTAs with a case stu dy . This g uid elin e su mmarizes the results of su ch con sideration s. The env iro n men tal imp act assessment pro cedure o f this Guid elin e con sists o f each of the follo wing stages: screenin g, scoping , i mpact assessments, and prev entive and mitig ating measures. Public-secto r in volvement sh ould b e introdu ced as th e p ro p er pro cedures in the v arious stag es of environmental i mpact assessments. Screening is a pro cess to select EPAs/FTAs where impact assessments shou ld be app lied. Specifically, it is a process that categorizes trad e liberalization , and narrows down the areas with a great need of environmental impact assessmen ts considerin g the ex tent o f their environ men tal imp act. The ov erall situation of trad e and environ men t in Jap an and its p artner coun tries (region) will b e co mp iled. Seco nd, scop ing is a process of establishing th e scope of considerations and selectin g issu es without bein g limited to the ex amin ation of impact assessment meth ods and items. Based on the screening results, the assessment items and assessment methods in impact assessment will be n arro wed down. Third, b ased on availab le econo mi c and environ mental data, meth ods (in clu din g V
quan titativ e mod el an aly sis) that should be u sed in imp act assessments will b e con sid ered . Both qu alitative and qu antitative an aly ses will b e mad e u sing these metho ds and th e impact assessment will be condu cted. Fourth, taking in to accoun t env iron me ntfrien dlin ess in past trad e lib eralization, co nsid eration s will b e mad e of th e details o f the con cept of the prev en tive and mitigating me asures. Hy poth etical Jap an -ROK EPA/FTA was co nsid ered in th e case study . This case stud y was cond u cted subject to th is Guid elin e. In the screening stage, two ty pes of screen ing sh eet were created and the areas with a great need for environ mental impact assessments were selected. A screening sh eet, “Details of the EPA/FTA Discussed at th e Jo int Stu dy Group”, includes items that co nsider whether th ey need to b e inco rporated into the tex t of the ag reement (status). Further more, a screening sh eet, “the Relationship Between Trad e Lib eralization and Env iron men tal Imp acts”, in clud es items th at con sid er clarifying the differences in the environmental po licy situ ation in Jap an and ROK. Seco nd, u nderstanding th e b asic si tu ation is a p rocess o f qualitativ ely organ izing environmental impacts th at a bilateral EPA/FTA may cause, based on th e basi c info rmatio n on th e econo my an d en viron ment of Japan an d ROK, wh ich will contribute to th e selection of con ten t fo r wh ich there shou ld be prioritized con sid eratio ns in environmental impact assessments. Scoping sh eets on th e economic, environmental and so cial situ ation contribu ting to imp act assessments were p rep ared , an d th e items contributing to th e establishment of impact assessment methods, items and scope of con sid eration an d n arrowing d o wn the issues were extracted. Third, imp act assessmen t of econo mic, enviro n men t and so cial were con du cted by utlizing qu alitativ e and quan titativ e method s, includin g th e intern ation al inp ut-output an aly sis and the AIM/CGE model analysis. Th e AIM/CGE model takes a macro perspectiv e, namely , a clo sed mo del focu sin g on glob al equilib riu m, while input-outp ut an aly sis tak es a micro persp ectiv e , an op en mo del fo cusin g on Japan and ROK. Accord ing to th e impact assessment, the co nclu sion of a Japan-ROK EPA/FTA will con tribute to th e ex pansio n o f econo mic activity in bo th Jap an and ROK. Ho wev er, the resu lts sh o w th at the EPA/FTA will h av e a differen t imp act on exports and imp orts as well as production v olu me in each indu stry in both coun tries. Th e i mpact on th e env iron me nt is exp ected to steadily in crease as a result o f th e exp an sion of econo mic activity . Howev er, th e g ro wth rate of th e env iron me ntal p ressu re will be lower th an tha t of econo mic activity , and fro m a macro-lev el p erspective, it is presumed that the sp read of environ ment-frien dly techno logy and stru ctu ral chang es aimed at b eco ming en ergy efficient industries will be promoted. This trend became even more apparent through the intern ation al inp ut-ou tput analy sis, which showed th e relation sh ip b etween th e rate o f ch ang e in CO 2 emissions and SO 2 emissions and economic growth rate. Ho wever, if th e expansion of th e environmental pressu re is to be suppressed as mu ch as possib le wh ile main tain in g or in creasing econ o mic activ ity , it is necessary to consider measures to coun terb alan ce th e expansion of the environmen tal pressure arising fro m the expansion of econo mic activities. VI
Finally, co nsid erations were given to th ree aspects: effo rts in th e indu strial sectors, suppo rt in the policy and sy stemic asp ects, and effo rts in b ilateral n egotiations.
Objectives and aims of the Guideline
1. In o rder to solve en viron mental issues, it i s n e c e s s a ry fo r a l l c o u n t ri e s , i n c l udi ng d e v e l o p i n g c o u n t r i e s , t o t a k e e n v i r o n me n t a l p ro t e c t i o n mea s u r e s . T o a c h i e v e t h i s , i t i s effective, through trade policy and other me an s , t o i n d i r e c t l y p r o mo t e e n v i r o n me n t a l protection in other countries co unterparts and encourage these countries to strengthen environ men tal protection in conjunction with environ mental cooperation. 2. Endeavors to streng then bilate ral and multilateral econo mic partne rship s cu rrentl y underway are wide-ran ging. They are not li mited to reciprocal trad e libe r a l i z a t i o n , b u t a l s o aim to harmo nize its counterpart ’ s d o me s t i c s ys t e ms a n d r e f o r m s y s t e ms .
I t i s p re s u me d
that throug h these me ans, it wi ll be possibl e to strengthen enviro n mental me asures in other c ountries mor e ef f ectiv ely. F u r th er mo re , i t i s i mp o r t a n t t o c o n d u c t a n e n v i r o n me n t a l i mp ac t asse ss ment of the Ec ono mic Pa rtnersh ip Agree ment (EPA) / F ree Trade Ag ree ment (FTA) that will b e conclude d, whi ch would includ e not onl y the libe rali zation o f t rade and b u t also the liberalization of inv est me nt. It is a l s o n e c e s s a r y t o d ev e l o p me t h o d s b y c o n d u c t i n g trial
e n v i r o n me n t a l
i mp a c t
a s s e s s me n t s .
Fu rth ermo re
environ men tal i mpact assess ments is quite feasib l e i n o rd e r t o e n c o u rage oth e r countries to strengthen their enviro n mental me asures.
3. This repo rt ma y be utilized as a guideline on environ me n tal impact assess ment method s t o b e a p p l i e d i n t h e e v e n t J a p a n c o n c l u d e s bilatera l o r regiona l FTAs o r EPAs with ot her countries.
Issues concerning trade and environment
4. In 1991, ye llowfin tuna incident triggered the issue o f trade and en viron ment to captu re the li melig ht. Late r on, the Rio Decla ration on Enviro n ment and Develop ment and Agenda 21 were ad opted at th e E a r t h S u m mi t i n 1 9 9 2 , a n d t h e d i r e c t i o n o f p ro v i d i n g mut u a l s u p p o r t for trade p o licy and environ mental policy b ecame international co mmo n understanding. 5. In response to the env iron men tal co mmitmen ts o f t h e M e e t i n g o f O E C D E n v i r o n me n t a l Ministe rs, the Envi ro n mental Po licy Co mmittee and Trade Co mmittee o f the Organi sati on for Econo mi c Co -op eration an d Develop ment (OECD) established in 1 991 the Joint Working Party on Trade and Environ ment, which co nsiders me asures to realize mu t u al support fo r environ mental prote c t i o n a n d f r e e t r a d e . 6. Newly established in 1995, th e World Trad e Organization (WTO) sets up the Co mmittee on Trade a nd Environ me n t (CTE) which exa mi nes va rio us issues o n trade and environ me nt . At the new WTO round launched at the Fou r th Ministerial Con ference (Doha) in Nove mb er
2001 it was concluded in the Doha agenda that negotiations on trade and environ men t would take place. Ho weve r, the r e has not b een much p rogress in t he conside r ations at th e WTO be cau se negoti ati ons failed t o re ach ag ree ment at t h e WTO M iniste rial C onfe rence i n Cancun, M exico in September 20 03 due to disagreemen t between developing countries and developed countries. 7. Further mo r e, at the World Su mmi t on Sust ainable Develop ment (Johannesburg Su mmit ) held fro m August to Septe mber 2002, trade was one o f the focal issues o f d iscussions. An acco mpli sh me nt o f thi s Su mmi t i s that the Plan of Acti on that wa s adopted c onfir med t hat mu tual
enviro n ment
environ men tal impact assess ment would be pro moted o n a national-level to e lucidate th e interrelatio nship between trad e, environ ment and develo p ment. 8. Thus, in recent yea r s i ssue s c oncerning trade and environ men t have co me to b e discussed at variou s in ternational fora, and are beco ming increasing ly i mpo rtan t as a majo r concern fo r the wo rld to address.
Background of environmental impact assessments in EPAs/FTAs
9. J a p a n e s e f i r s t b i l a t e r a l F T A w a s s i g n e d w i t h S i n g a p o r e o n 1 3 J a n u a r y 2 0 0 2 . T h e n , a Japanese FTA Strateg y, released by the M inistry o f Foreign Affairs in October 200 2 , outlines th e advantages of p ro moting FTAs, i mportant points in pro moting FTAs and t h e type of FTA Japan sh ould be ai ming fo r. This stra teg y a lso de scrib es the st rat egic priorit ies for FTAs, calling fo r an immediate respon se fro m 1 ) particularly Republic of Korea (ROK) and ASEAN, wh ich are the mo st pro misin g counterp arts in neg o tiations, and 2) Mexico, where Japanese businesses have to p ay re l a t i v e l y h i g h t a ri ffs i n c o mp a ri s o n t o t h o s e p ar t i es in the Nort h A me rica n Free Tra d e Ag ree ment (NAFTA) and in the Eu rope an Union t hat have alread y concluded an FTA with M exico. With this backg rou nd, Japan is d yna mically undertakin g endeavo r s ai med at concludin g a region al EPA/FTA. On e o f the facto rs wh y FTA/EPAs have pro mp ted global attention in recen t yea rs is that n egotiations have st all ed at the WTO. Meanwhile, bilateral and region al FTAs an d EPAs are progressin g in response to the accel erating t ren d fo r globa lization .
1.3.1Environmental Impact Assessments of EPAs/FTAs in Other Countries 10.
Inte rnation al o rganiz ations incl uding the OEC D, an d the Unit ed State s (US ) , Canada and the Europ ean Union (EU) have alread y developed assessmen t methods on the environ men tal aspect s of t rade lib eraliz ation, and are i mp le me ntin g environ mental i mpa c t asse ss ment s.
Table 1.1 Development of EIA of EPAs/FTAs in other bodies Details US
Executive Order 13141 - Environmental Review of Trade Agreements, 64 Fed. Reg. 63,169 (Nov. 18, 1999) (Order) and implementing guidelines, 65 Fed. Reg. 79,442 (Dec. 19, 2000) z US-−Jordan(2000)、US−Chile(2001)、US−Singapore(2002) 1999 Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals and Framework for Conducting Environmental Assessments of Trade Negotiations
Sustainability Impact Assessment: SIA z WTO New Round Sustainability Impact Assessment Study Phase One report, Phase Two report and Phase Three report（2001-2005） z EU − Chile(2003) 、 EU-MERCOSUR(2002 − 2005) 、 EU-ACP （ African, Caribbean and Pacific States）（2002-2006）、EU-GCC（Gulf Cooperation Council(2002-2005) z Etc.
An Assessment of the Environmental, Economic and Development Benefits of Future Global Trade Liberalisation.(2000)) ASSESSING THE ENVIRONMENTAL EFFECTS OF SERVICES TRADE LIBERALISATION: A METHODOLOGY(2002）
Chapter 2 2.1
Environmental Impact Assessment Guideline for EPAs/FTAs
Basic concept of environmental impact assessments in EPAs/FTAs
11. The enviro n mental i mpact assessme nt pro ce dure of th is guideline consist s of each of the follo wing stages: sc reening, sc oping, i mp act assessme nts, as well a s preventive and mi tigating me asu res. Public-sector involveme nt should be introd uced as p ro p er p roced ures in the various stag es o f environ mental impact assessmen ts. Table 2.1 describes the step s i n environ men tal i mpact asse ss ment procedu re s i n E P As/ FT As t o g e t h e r with a su mma r y of these steps.
Table 2.1 Environmental Impact Assessment Procedures in EPAs/FTAs Procedure Screening
Details Screening is a process to select EPAs/FTAs where impact assessments should be applied. Specifically, it is a process that categorizes trade liberalization, and narrows down the areas with a great need of environmental impact assessments considering the extent of their environmental impact. The overall situation of trade and environment in Japan and its partner countries (region) will be compiled. A screening sheet will also be created and the areas with a great need of environmental impact assessments will be narrowed down taking into account the two viewpoints given below. 1) Details of the EPA/FTA as discussed in a joint study group between Japan and the partner countries 2) Relationship between trade liberalization and environmental impact Scoping is a process of establishing the scope of considerations and selecting issues without being limited to the examination of impact assessment methods and items. Based on the screening results, the assessment items and assessment methods in impact assessment will be narrowed down taking into account the three viewpoints given below. This is a process which contributes to the selection of content for which there should be prioritized considerations in environmental impact assessments by gathering basic economy- and environment-related information on Japan and its partner countries (region) and by qualitatively organizing the environmental impact of bilateral (regional) EPAs/FTAs based on this information. Furthermore, a scoping sheet on the economic, environmental and social situation will be created incorporating the three viewpoints given below. The scope of considerations will then be established and issues will be narrowed down, and items contributing to the selection of impact assessment items and methods will be extracted. 1) Scoping sheet on the economic impacts of the conclusion of a EPA/FTA 2) Scoping sheet on the environment impacts resulting from economic impacts 3) Scoping sheet on social impacts resulting from economic impacts Based on the content of the scoping sheet and taking into account the three viewpoints given below, the scope of considerations will be established and the issues will be focused and items that will contribute to the selection of impact assessment items and methods will be extracted. 1) Geographic scope of application 2) Scope of application of the impact assessment items 3) Methods for impact assessment
Implementation of impact assessments Consideration of preventive and mitigating measures
Based on available economic and environmental data, methods (including quantitative model analysis) that should be used in impact assessments will be considered. Both qualitative and quantitative analyses will be made using these methods and the impact assessment will be conducted. Taking into account environment-friendliness in past trade liberalization, considerations will be given to the details of the concept of the preventive and mitigating measures.
12. It i s essen tial that t he entit y i mple menti ng the en viron ment a l i mpact a sse ss ment s constitute t he syste mic basi s and t hat the re is cooperatio n bet ween t h e envi ronme n t -re late d bureaus an d trade-related bureau s. 13. Decision- making on trade liberalization shall advance taking into accoun t various aspect s su ch as the econo my and soci ety. In li ne wi th t h is deci sio n -making flo w, environ men tal i mpact asse ss ment s in trad e l iberaliz atio n shall pro v ide the decision -maki n g entity wit h info rma t ion that will he lp decision -making fro m the pe rspective o f the environ men t.
14. There a re various le vels o f t ra d e liberali zation that are inclu d ed in the scope o f environ men tal i mp act asse ss ment s. Fo r exa mp le, the y include: c r oss-se ctora l, mu lt ilate ra l (global sca le) t rade li beraliza tio n negotiations (WTO negotiations, etc.), cross-secto r al, bilatera l an d mu ltil ate ral (region al sc ale ) t r ade libe rali zation, and bilate ral a nd multila t eral (regional scale) trad e liberali zati on in the fi eld of natu ral re source s. 15. In the screening pro cedure, wh ich individ u a l l y d e t e r mi n e s w h e t h e r e n v i r o n me n t a l i mp a c t a s s e s s men t s w i l l b e mad e , t h e r e s h o u l d be a decision based on certain standards as to whether screening should be carried out. There should not only b e a public disclosu re o f the results of the decision, but al so an opportunity fo r the public to sub mit o p inions before decision is ma de. In this context, it is useful to cre ate a screening sheet as de mo nst rated in t h e c a s e s t u d y a n d e x a mi n e w h e t h e r a n in d i v i d u a l E P A / F T A e n v i r o n me n t a l i m p a c t asse ss ment is nece ssa ry.
16. S c o p i n g i s a p ro c e s s t h a t i s c o n d u c t e d i n t h e e a r l y s t a g e o f e n v i r o n me n t a l i mp a c t assess ment
conside rati ons fo r env iron men tal i mpact a sse ss ments in trade lib era lization. 17. With respe ct to the se lection of t h e geograp hic scope o f applicatio n, the effec ts of t rad e liberali zati on ma y a ffect a thi rd country in addition to Japan and its pa rtne r countrie s. A variet y o f stages can be assu med in the process o f conside rin g i mpact s, including the
impact on both Japan and its p a rtner countries, i mpact on neigh bouring co untries, i mpact on other countries, esp ecially dev eloping countries, and impact on the world as a whole. It is pre fe rabl e that each country pa rticipating in the agre e ment cond ucts an assess ment wi th focus on th e environ mental i mpact on its o w n co u n t r y, w h i l e t a k i n g i n t o a c c o u n t t h e e f f e c t s on a third country. However, when an FTA is signed between a developed country an d a developing country, if the developing country lack s the person nel and in for mation for conducting assessmen ts, it is realistic fo r the develo ped country to cooperate with its partner cou ntry and co nduct an assessmen t of th e effects on its partner c o u n t ri e s a s w e l l . 18. As fo r asse ss ment it e ms, it i s d e sirable that a balanc ed , integ rated assessme n t be made of the eco no my , soci ety and en viron ment . Ho weve r, because it is te chnica lly difficul t t o conduct so cial impact assess men ts, it is ap propri a t e t o fo c u s o n i mp a c t a s s e s s men t s i n t he econo my a nd environ me n t at thi s point, sin ce the y a re area s that can be anal yzed acco rding to alread y developed quantitativ e and qualitative meth ods. Esp eci ally in t rad e liberali za tion involving partner coun tries that are developing countries, it is presu med that en viron mental and soci al issue s wil l ari se toge t her in such cases as lo cal resident s facing de velop ment in their o wn residential a rea, and it will be nec essa ry to a sse ss the e nviron ment al and soci a l aspect s tog ether. Tabl e 2.2 is a l ist of the p o tential ite ms that wil l be assessed in ter ms of e cono mic, envir o n men tal an d s o cial imp a c t s .
Table 2.2 Items for assessment of economic, environmental and social impacts Items
z Impact on the domestic economy and other areas ¾ Changes in the macroeconomic GDP of Japan and its partner countries and in added value by industry (quantitative assessment) ¾ Structural changes in the economy and industry (qualitative assessment) ¾ Technological impact such as changes in the production process (qualitative assessment) ¾ Impact on employment (qualitative assessment) ¾ Fluctuations in the use of environment-related technology (qualitative assessment) z Impact on trade flow ¾ Changes in trade of principal items (quantitative assessment)
z z z
Environmental impact caused by baseline changes resulting from economic impact ¾ Changes in air quality (SOx, NOx, etc.) ¾ Impact on the global warming issue ¾ Impact on the ozone layer protection issue ¾ Impact on the waste and recycling issue ¾ Impact on the quality and volume of freshwater, rivers and seas ¾ Impact on nature conservation and environmentally sensitive areas ¾ Impact on endangered species and possibility of increase in new species ¾ Impact on the ecosystem ¾ Possibility of increased environmental issues concerning toxic substances as the environment is related to people’s health ¾ Other impacts on environmental issues considered particularly important to Japan and its partner countries Impact on poverty Impact on health and education Impact on equitability
19. As fo r the Guideline procedu res, based on a s c o p i n g s h e e t o n t h e e c o n o m i c , e n v i r o n m e n t a l a n d s o c i a l s i t u a t i o n wh ich wi ll be cre ated in the ea rl y sta g e s o f s c o p i n g , i t i s d e s i r a b le t o
narrow do wn the areas by 1) focu sing on the larg e fields and secto rs that have a substantial impact on the environ ment resulting fro m ch anges in th e econo mic and industrial structu res, 2) taking into account the ma gnitude and order o f priority of the effects fro m the perspe ctive of su stain ability, and 3) confi r mi ng wheth e r the anal yt ical tool s a nd necessa ry infor mation exist.
20. As a basi s for a sse ssme nt, a mon g the facto rs in trad e liberali zati on, it is ne cessary t o conduct an assess men t for the reduction/elimination of tariffs assu min g s e v e ra l s c e n ar i os, a nd to individu ally an d s p ecif ically co n s i d e r the i mpact on the env iron men t (e nviron ment a l regulation s ) for the reduction/e li mination of non -ta ri ff b ar rie r s. Mo reov er, f ro m t he standpoint
environ men tal
resu lts is
en viro n me n t a l to
i mp a c t
a s s e s s men t s
en viron ment a l
asse ss me nts
exa minatio n of seve ra l scena rio s if pa rticula r envi ron mental polici es a re i mpl e mented. 21. Regarding technical methods in assess ment, this is the stage fo r d eciding wh ich impact asse ss ment method should be applied to each ite m. A suit able assessment met hod (quantitativ e and quali tative a ssessment meth ods) will b e e mplo yed fo r each o f the ite ms of econo mic assess ment, environ men tal assess ment and social assess ment (Table 2.3).
Table 2.3 Technical methods in assessment Stage
Quantitative assessment using economic models
Qualitative assessment using the results of Stage 1
Quantitative assessment partly using models
assessment) Stage 3
Confirmation and assessment by persons in charge of environmental
22. In conducting environ mental i mp act assessments in trad e liberalization, it is considered appropriate to co mp re hensivel y reveal environ mental i mp acts b y 1) quantita tively showin g the ma cro econo mic environ men tal i mpact s th rough quantitati ve asse ssme nts, an d 2 ) conducting qualitative assessmen ts for mi croecono mic environ men tal i mpa cts that cann o t be quantitatively assessed or biodiversity an d o t h er e n v i r o n me n t a l f a c t o r s t h a t d e f y quantitativ e desc riptio n or a sse ssme nt.
2.4.1 Quantitative analysis methods 23. Seve ral nume r ical models fo r quantitativ e asse ss me nt method s have a lre ady bee n d e v e l o p e d t o mea s u r e t h e i mp ac t of an EPA/FTA on th e mac roeco no my and t rade. On th e other hand , quantitati ve anal ysi s model s fo r envi ron mental a spec ts a re li mi t ed. Table 2 .4 shows exa mp les o f q uantitative analysi s mo dels th a t ma y be applied in environ me ntal i mp a c t a s s e s s men t s i n p a r t i c u l a r . I n t h e c a s e study o f th e follo wing chapter, in ter-industrial analyse s were made using AIM /CGE and the EDEN database, a nd quantita tive anal ysis me thods were u sed for environ men tal impact assess ments in carbon dioxide and SO 2 . Table 2.4 Examples of qua ntita tive a nalysis mo dels Model name
Global Trade Analysis Project (GTAP)
Applied general equilibrium
Second Generation Model (SGM)
Applied general equilibrium
Pacific Northwest National Laboratory
Greenhouse gas emissions
Multiple Area Resource and Industry Allocation (MARIA)
Tokyo University of Science
Greenhouse gas emissions
Overview The GTAP model is an applied general equilibrium model that was developed by the Global Trade Analysis Project established in 1992. Led by Professor Thomas W. Hertel, this project was founded with the purpose of assessing the impact of international trade on countries around the world. The SGM is a classical applied general equilibrium model that was built based on the national income account developed by the Pacific Northwest National Laboratory (PNNL). This model integrates the activities of four economic entities: the household, corporation, government and overseas sectors. This model also enables an analysis considering the impact that rising energy prices, caused by an introduction of a carbon tax to reduce CO2, will have on each of these sectors. This model also allows for the analysis to consider the effect that tax return measures, such as the use of tax revenues, income tax credits or increased government expenditures caused by the abovementioned carbon tax, will have on the production volume of each sector and real GDP. Moreover, the National Institute for Environmental Studies (NIES) and PNNL have worked together to improve the SGM. Using this improved SGM, an analysis has been made of the global economic impacts of trade resulting from attaining the Kyoto Protocol’s reduction targets, as well as an estimate of the economic impact of CO2 emission restrictions on Japan. A nonlinear, dynamic optimization model, the MARIA model was developed with Professor Shunsuke Mori of the Tokyo University of Science playing a leading role. The model divides the world into eight regions and an analysis is conducted in ten-year intervals from 1990 to 2100. This model enables the formulation of a strategy in global environmental measures and
Goto’s Dynamic Macroecono mic Energy Equilibrium Method (GDMEEM)
University of Tokyo
Greenhouse gas emissions
International Food and Policy Simulation Model (IFPSIM)
Japan International Research Center for Agricultural Sciences (JIRCAS)
Cultivated acreage, forest acreage
Asian Pacific Integrated Model (AIM)
Integrated (general equilibrium or bottomup)
National Institute for Environment -al Studies (NIES), Kyoto University
Greenhouse gas emissions, SO2
technologies, land use and climate change, taking into account the international trade balance. However, since the economic sector is limited to one sector—macroeconomic activities— this model has some features that make it ill-suited for inter-sectoral mutual impact assessments and short-term analyses. Developed by Noriyuki Goto of the University of Tokyo, the GDEEM is a dynamic market equilibrium model for the macroeconomy and energy market. This model aims to simulate the future economy and energy demand by inputting technology and economic conditions. CO2 emissions are calculated using a submodel. The GDEEM is also a bottomup model that partially incorporates technical data from the AIM/Enduse Model. Conversely, it is possible to estimate the amount of carbon tax necessary for stabilizing CO2 emissions. As a case for reference, it is also possible to estimate the carbon tax necessary for achieving the reduction targets if combined with emission trading. Led by Professor Keiji Ohga of the University of Tokyo, the IFPSIM model was developed by the International Food Policy Research Institute (IFPRI) and Japan International Research Center for Agricultural Sciences (JIRCAS). This model is a dynamic partial equilibrium model specific to the agricultural sector that allows the simulation of the impact of policy such as tariffs and subsidies. In addition, regions and items can be freely established in the IFPSIM. Also, submodels are currently being developed since they are required for environmental impact assessments. So far, in addition to worldwide agricultural production forecasts, IFPSIM has been used to predict changes in China’s agriculture caused by its accession to the WTO, analyze deforestation in Thailand and Indonesia, and forecast the nutritional status in the Philippines. The AIM was developed through joint research by Kyoto University, various research institutes in the Asia-Pacific region and the National Institute for Environmental Studies (NIES) in Japan. The AIM is a large-scale model that assesses policy options in climate stabilization aimed at greenhouse gas reductions and easing the effects of climate change, with a particular emphasis on the Asia-Pacific region. AIM is an integrated model. Many models have been developed thus far. Among them, it is possible to assess economic impacts taking into account
International input-output analysis
Keio University, etc.
trade in Asian countries by using AIM/CGE in coordination with AIM/local and AIM/Material. Created by Keio University together with statistical institutions of Asian countries as a part of the “Environmental Protection in Asia,” a future academic promotion project of the Japan Society for the Promotion of Science, EDEN is a database used for international input-output analysis.
Consideration of preventive and mitigating measures
24. In rega rd t o the consi d eration o f preventive and mitigat ing mea sures, an investigation o f environ men tal policy me thods fo r Japan an d partner countries will be conducted with th e intention t o fu rthe r a u g ment the positive e ffects on t h e environ me n t and t o prevent an d mi tigate th e negative effect s exp ected to ari se fro m the environ me ntal i mp act assess ment in question. It is desi rabl e fo r the re sults of the se con side r ations to b e refl ected in the t ext o f the EPA/ FTA docu me n t. It is al so desi rabl e for the se result s to be re flecte d in decisi onma king th roug h th eir imp le men tatio n b y s u c h me a n s a s e c o n o mi c c o o p e ra t i o n t h rou gh EPA/FTA, dialogue with the partn er country established by the EPA/FTA, and opportunities for dialogu e on enviro n mental co operation. 25. Speci ficall y, p reventi ve and miti gating mea sure s will be organize d based on the re sul t s o f t h e a b o ve me n t i o n e d i mp a c t a s s e s s men t o n the ove rall trend s in econo mi c activit y and overall environ men tal i mpact an d individual mea su re s will be conside red therea fte r. In particula r, it is nec essary to o rga nize these me asu re s b earing in mind the wa ys in which to r espond to the in d u s tr ial s ecto r, s ys temi c a n d policy aspects, and bilateral negotiations.
Conclusion of assessment of impacts
26. C o n c l u s i o n a b o v e men t i o n e d
a s s e s s me n t
a n a l ys e s .
i mp a c t s
e c o n o mic ,
w il l
e n v iro n me n t a l
i mp a c t
individually assessed and an a s sessmen t will be co mpiled a fte r these resu lts have be en consolidated.
Concept of public involvement
27. Public pa rt icipation in the envi ro n mental i mpact assessme nt p rocess will dep end on the degree of openness o f the trade negotiation process. Public disclosure in the appropriate stage of the trade ne gotiation proce ss i s c rucial, sinc e the EPA/ FTA will have vario u s effect s on each se ctor. Envi ron mental in forma tion i s h eld by a wi de range of sou rces su c h as the Go vern men t, local govern ments, e xperts, en viron mental and develop ment nongovern mental organizations (NGOs), the pub lic a nd ind u stries. It is necessary fo r a b road spectru m o f parties to be involved. Therefo r e, the participation of the public and experts is an essent ial step in the environ me ntal i mpact asse ss ment procedu re. It is not o n ly nece ssa r y 10
to wo rk to ward tho ro ugh info r mation disclosure a n d l i s t e n t o o p i n i o n s fro m t h e p u b l i c i n the variou s stages including scoping and assess ment, but also fo r go vern men t-wide wo rkin g organizatio ns to seek the particip ation of the s e p a rt i e s a n d t o h a v e a me chanism for setti ng up for a for exchan ge of opinions with these parties concu rrent with the wo rk on environ men tal impact assess ments.
Examination of environmental impact assessments
28. To ensu re t h at envi ron me n tal i mp act a sse ss men ts a re sc i en tifica ll y a n d o b j e c t i v e l y v a l i d , it is necessary to e s tablish an exa minati on process and to have the involve ment of organizatio ns respon si ble fo r environ men tal protection as the main entitie s co nducting th e exa minatio n. Potentia l choices fo r the main entities con ducting these exa mina tions inclu de organizatio ns respon sible fo r env iron men tal protection (Ministry o f the Envi ron ment) an d review pan els co mposed of experts. It is necessary fo r the examination to be conducted b y a third pa rt y independ ent of the e ntity conducting the a s sessmen t.
Ex-post evaluation and follow-up
29. It is de si ra ble fo r E P As/ F TA s to include a pledge to have follo w-ups and fo r the resu lts of fo llow-ups to be periodically co mp iled i n t o a d o c u me n t a n d p u b l i c l y r e l e a s e d . Further mo r e, it is po ssible that follo w-ups will be conducted at fo ra fo r dialogue on environ men tal cooperation with the partner co u n t ry, o r a t e n v i ro n me n t a l c e n t e rs s e t up by the Jap an International Cooperati o n A g e n c y ( J I C A ) i f i t i n v o lv e s c o u n t r i e s i n w h i c h J I C A has set up such centers.