Renewable Energy Programmes in the European Union, Japan and the United States - Compatibility with WTO Law

Abstract

RE support programmes are implemented in various forms and with varying strategies across the world. RE, be it wind, solar or other forms of energy, owes a substantial part of its growth worldwide to support from governments. Active involvement of governments in pursuing a conducive policy and regulatory framework, along with direct and indirect support for RE, has led to the growth of the sector across the world. It is in this context that the relevance of the study of the compatibility of RE support programmes with international trade rules becomes crucial. With countries exercising domestic policy space in implementing a wide variety of programmes to encourage RE in their respective jurisdictions, tensions between trading partners are increasing and issues of violation of the rules of international trade contained in various WTO Agreements often become the cause of trade friction. This study comes to the conclusion that several provisions of these programmes are arguably incompatible with provisions of the GATT and the ASCM. The countries implementing the support programmes are in breach of their WTO obligations in varying degrees. While the principles of NT and MFN are violated in many cases, the use of local content requirements is evidently in breach of a country’s obligations in case of others. It is also noticed that many of the support programmes constitute various types of subsidies that can be construed as either prohibited or actionable, in the context of the ASCM.