New Features of Green Industrial Policy and the Limits of WTO Rules: What Options for the Twenty-first Century?

Abstract

This article dissects the distinctive features of twenty-first century green industrial policy and discusses its implications for the World Trade Organization (WTO) system. Focusing on the renewable energy (RE) sector, it submits that both RE subsidies and trade remedies targeting RE technologies have been used as green industrial policy instruments albeit the latter have largely escaped WTO scrutiny so far. After critically assessing the interplay between the ‘green’ and the ‘industrial’ components of both types of measures, this article gives an explanation for the actual trends in WTO RE-related disputes and concludes that, contrary to conventional wisdom, the rise of green industry policy does not as much confront the WTO system with the problem of reserving more policy space that it is currently available for good (‘green’) RE subsidies, but rather with the problem of eroding the larger than optimal policy space that currently exists for bad (‘industrial’) trade remedies targeting RE technologies. Building on this, this article critically assesses the existing calls for reform of WTO rules from a trade and climate change standpoint and advocates for solutions à géometrie variable that could allow for addressing the main shortcomings of both the WTO Agreement on Subsidies and Countervailing Measures and the WTO Anti-dumping Agreement.