International Trade Law Challenges by Subsidies for Renewable Energy

Abstract

Although it is widely acknowledged that the replacement of conventional ‘grey’ energy with renewable ‘green’ energy is an important pillar of climate change mitigation, the question of how governments can support this development remains highly contested. In Canada – Renewable Energy, a domestic support measure for renewable energy generation has been subject of dispute settlement proceedings before the World Trade Organization (WTO) for the first time. In this ruling, the concept of ‘relevant market’ which forms part of the subsidy analysis proved to be highly controversial. By looking at the delineation of the relevant market and the conditions justifying subsidies, this article takes up this debate and examines the degree of policy space that is conferred to WTO Members in supporting their renewable energy sector. It discusses possible solutions to overcome the legal insecurity emanating from the blurry concept of ‘relevant market’ by arguing that a comparison between the WTO law and antitrust law can yield valuable insights to establish a more consistent approach for assessing the relevant market.