Environmental Impact of Trade


Issues related to environmental consequences of intensifying international trade have gained significant importance in European Union (EU) and worldwide policies in the past few years. This is emphasised, for example, in the revised EU Sustainable Development Strategy , the Thematic Strategy on the Sustainable Use of Natural Resources and in the upcoming EU Action Plan on Sustainable Consumption and Production .

Products are increasingly produced in one part of the world, taken into another country and then redistributed to their final country of consumption. In order to promote and understand sustainable consumption and production, there is a need to capture the whole life cycle costs of products and services (in terms of emissions, water use, material flows, etc) in order to be able to fully quantify the environmental impacts of consumption and trade. However, there is an absence of an accepted approach towards quantifying and assessing the trans-national impacts of consumption. Many existing methodologies such as life-cycle assessment (LCA), resource flow and material flow analysis rely on average data and do not easily allow for local impacts of production and consumption, or infrastructure associated with production, use and disposal. This is especially important when assessing products and services whose production-consumption chain spans across several national boundaries.

In 2008, the SKEP network set out to identify a suitable methodology to assess such trans-national environmental impacts and funded the EIPOT Project (environmental impacts of trade). The project aimed to bring together existing knowledge and ongoing research for the assessment of global environmental impacts of traded goods and services. It reviewed past and current accounting methodologies and identified and specified a suitable integrated approach, which can be applied by SKEP member states and other countries.

The SKEP ERA-NET (Scientific Knowledge for Environmental Protection) is a partnership of 17 government ministries and agencies, from 13 European countries, responsible for funding environmental research. The SKEP network aims to facilitate the improvement of science into policy processes and to support evidence-led modern regulation.


The aims of the EIPOTproject were to:

• review and evaluate existing environmental accounting techniques that can be used to illustrate transnational impacts of traded goods and services;
• specify the (theoretical) framework and criteria for environmental accounting methodologies to assess the environmental impacts of imported and exported goods and services;
• identify the most suitable methodology and expand it into an accounting approach which can be used by all SKEP member states;
• identify data requirements and possible data sources for the recommended method;
• elaborate the roles of different regulatory authorities in providing the required data and advice on the practical implementation of the methodology.

The project aims to provide a comprehensive comparative assessment and evaluation of different methods and tools which are currently applied to assess the environmental implications of international trade.

The project will identify and specify an accounting approach which is suited to the specific requirements of the SKEP member states. During the course of the project, the specific policy issues of SKEP member states relating to environmental pressures from traded products will be identified and the development of a suitable model will take these requirements into account from the beginning.

A project steering group has been established to provide guidance and support including members of the SKEP Call Steering Committee and relevant policy and technical experts.

Consortium members
• Stockholm Environment Institute at the University of York – SEI/UoY; UK – www.sei.se
• Sustainable Europe Research Institute – SERI; Austria – www.seri.at
• Netherlands Environmental Assessment Agency –PBL; Netherlands – www.pbl.nl
• Statistics Sweden, Environmental Accounting Unit – SCB; Sweden – www.scb.se

External experts
• Prof Dr Manfred Lenzen, Centre for Integrated Sustainability Analysis (ISA), University of Sydney, Australia
• Dr Jesper Munksgaard, Econ Pöyry, Copenhagen, Denmark
• Dr Glen Peters, Center for International Climate and Environmental Research (CICERO), Oslo, Norway

Key dates
Project inception meeting: April 2008
Interim report: August 2008
Interim workshop: September 2008
Draft final report: February 2009
Final report: August 2009

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