Abstract

This contribution illustrates some unresolved issues and tensions that characterize the way the WTO deals with renewable energy subsidies. Indeed, the indisputable urgency to address the negative impacts of climate change on the one hand, and the use of subsidies to boost and support a country’s renewable energy sector on the other, provide momentum to better define the legal framework offered by the World Trade Organization (WTO). It is fundamental to ascertain whether the current framework represents an adequate model to address renewable energy subsidies, or whether a more flexible interpretation of WTO Agreements toward sustainable development and the protection of the environment should be adopted instead. In view of that, this paper carefully investigates the evolution of the WTO subsidies disciplines, focusing in particular on the approach of the WTO towards renewable energy subsidies. This article is divided in three sections. The first one offers an overview of WTO disputes involving subsidies in the renewable energy sector, the second one focuses on the recent decisions in the Canada – Renewable Energy and Canada – Feed-in Tariff Program disputes and on some important issues they raise, while in the last one we draw our conclusions.
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Authors Paolo Farah of West Virginia University and  Elena Cima, PhD candidate at the Graduate Institute of International and  Development Studies, examine and outline the details of WTO cases within the  renewable energy sector which address the issue of what constitutes a  government subsidy subject to the WTO’s subsidies discipline under the  Agreement on Subsidies and Countervailing Measures (ASCM). A measure may be a  government subsidy if a financial contribution is provided and confers a  benefit to a recipient. These two conditions are described and examined by  the authors. Subsequently, the authors consider whether government subsidies  pertaining to the renewable energy sector should be permitted, and argue that  relevant WTO agreements do not give due consideration to the particular  issues faced by renewable energy consumers, or the importance of their cause.  It is argued that the provisions of WTO agreements should be interpreted  flexibly to optimally promote the development and protection of the environment.