The Impact of Environmental Standards and Regulations Set in Foreign Markets on India’s Exports

  • Vasantha Bharucha


The compatibility between trade and environment policies will be an important international issue during the 1990s. For instance, while trade policy analysts fear that environmental standards may become obstacles to international trade, environmental groups are worried that trade liberalisation will lead to a downwards harmonisation of environmental standards. From another perspective, there are those who believe that products which conform to high environmental standards may accrue a competitive advantage.


Environmental Standard Montreal Protocol Material Safety Data Sheet Overseas Market OECD Member Country 
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Notes and references

  1. 3.
    It is worth noting that the task force estimates of these economic costs are significantly higher than estimates made by the World Bank (King and Munasinghe, study published by the World Bank and quoted in Development Alternatives Newsletter, 1991), whose estimates were only $320 million for an early phase-out and $482 million for a late phase-out, and the Ministry of Environment and Forest’s consultants, Touche Ross, whose estimates were $307 million for an early phase-out and $703 million for a late phase-out. See K. Chatterjee ‘After the Copenhagen Conference, a fresh look at the Montreal Protocol’, in Development Alternatives Newsletter, vol. 3, no. 1 (1993). There is, of course, a range of options for adjustment between the two extremes of early or late phase-out. An early phase-out would mean replacement of all CFCs as soon as possible, rather than using existing CFC capacity until the capital investment in the plants is defrayed. A late phase-out, on the other hand, would mean unconstrained growth of CFC production and consumption until the final phase-out date, which is at present 2010. The decision whether to follow an early or a late phase-out strategy affects the distribution of costs between producers and consumers of CFCs. With an early phase-out strategy the costs would be mainly carried by producers because their investment outlays in CFC technologies would not be fully recovered. With a late strategy, Indian producers would be better off, but the bulk of the adjustment costs would fall on consumers, who would face difficulties from for example, not being able to have their CFC refrigerators recharged after 2010. All studies reveal that when adding up the costs for all the three groups, a late phase-out strategy would be much more costly for India than an early phase-out strategy.Google Scholar

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© UNCTAD 1997

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  • Vasantha Bharucha

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