“Reverse Permissibility” in renewable energy sector: Going beyond the US – India solar cells dispute
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Recent years have witnessed a rise in conflict between WTO members over the use of state subsidies designed to promote the renewable energy sector. Government subsidies are seen by domestic polic-ymakers as a key catalyst in attracting foreign investment, building capacity, and meeting other domestic policy goals. However, subsidies and other state incentivization programmes often carry trade-distorting effects. This paper examines the current state of WTO law and jurisprudence on subsidies extended to achieve environmental goals, in particular the Canada-Renewable Energy/Feed-in Tariff case and the more recent India-Solar Cells case which higlights the localization problem in the renewable energy sector. The case outcome shows that the WTO continues to maintain the status quo by prioritizing free trade over environmental considerations. The paper also discusses the possibility of reform in the GATT/WTO framework for promotion of renewable energy initiatives while maintaining the integrity of the system.
This document has been peer reviewed.