Salient Green: Business Power and Trade Policy Responses to Chinese Solar Imports

Abstract

Markets for renewable energy technologies have globalized rapidly over the past decade. At the same time, a series of bilateral and multilateral trade disputes have emerged in solar photovoltaics (PV) and wind technologies. The emergence of these disputes is puzzling. Renewable industries are increasingly dispersed globally, tying domestic firms into global value chains, reducing the economic gains from protection and undercutting industry support. Why, then, have governments in the European Union and the United States pursued trade remedies? In this paper we focus on the solar photovoltaic industry, arguing that public interest in presented an opportunity for policymakers to pursue their own interests in trade protection. The salience of solar among the public, coupled with policymaker’s own interests, led to a narrow coalition of business interests achieving their preferred policies. We examine our argument through a comparative case design centered on European Union, German, and U.S. responses to the rise in Chinese solar exports. Our findings suggest that rather than decreasing the likelihood of protection, the political salience of industries can increase the likelihood that narrow business interests achieve high rents through the pursuit of protective measures.