Wednesday, September 18, 2013

Fossil fuels, renewable energy and WTO rules

An ASIL insight into subsidies, renewable energy and fossil fuels throws open larger issues of trade, environment protection and world trade rules.

Timothy Meyer questions the dichotomy between the differential treatment between subsidies given to fossil fuels vis a vis those provided to renewable energy.
"The existence of domestic content requirements in renewable energy programs is likely a political condition for passage by governments that wish to show that they are not subsidizing foreign investors. But this political necessity has rendered government support for environmentally-helpful renewable energy programs vulnerable to challenge before the WTO in a way that environmentally-harmful fossil-fuel subsidies are not, creating tension once again between trade and climate objectives."
Who will bell the cat? 


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Jayant Raghu Ram said...

Mr. Srikar, I don't believe there is any dichotomy in treatment of subsidies given to fossil fuels and those given under renewable energy programmes. atleast not as far as the WTO SCM Agreement is concerned, since there is no element of specificity. Though it can positively be said that there is a "subsidy" being provided under the ASCM, such a subsidy will not be actionable under the ASCM in the absence of it being specific.

Would like to know your views on the same.