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Renewable Energy and WTO Conflicts: Outcomes Uncertain

April 19, 2011

At this blog we have had a somewhat academic (and amateur) interest in the interplay between national environmental policy for the promotion of low-emissions systems, and international trade law.  This interest is rapidly becoming less academic, as promotion of cleantech is becoming financially and politically more salient.

Promotion of renewable energy by Governments typically covers the spread of R&D, commercialisation, and deployment.  Now, Government support in several of these areas has been formally contested at the WTO.

The Spring 2011 review issued by the International Centre for Trade and Sustainable Development (ICTSD) in Switzerland ‘A New Dawn? Renewable Energy at the WTO’  assesses the direction of developments in this space, and provides abridged reviews of some cases of specific interest with implications for renewable energy policy framework and program design the world over.

The cases cited include the objection by Japan to Ontario’s solar Feed-in-Tariff, and the objection by the US Steel Workers Union to a wind technology manufacturing government support program in China. 

For the first case, Marie Wilke at ICTSD explores interesting issues associated with: the nature of Government agencies; the normal practice of Government; the legal treatment of electricity (apparently a ‘good’); whether the program constitutes procurement or subsidy; and the treatment of local content rules.

Governments are increasingly inclined to provision of support for low-emissions projects and technologies through market mechanisms and tariff structures with delegated and distributed responsibilities.  Whether and what aspects of these mechanisms constitute Government procurement or subsidies is of critical interest.

For the second case the author considers in particular the applicability of Article XX of GATT to the Subsidies and Countervailing Measures Agreement.

ICTSD is exercising some thinking on global legal governance of renewable energy in preparation for the Rio +20 Conference in 2012.  As so much of the WTO agreements are left open to interpretation and negotiation, the first rulings (although not expected for some time) will be most instructive for further renewable energy support policies for Governments around the world.

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