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Antidumping and Feed-In Tariffs as Good Buddies? Modeling the EU-China Solar Panel Dispute

Listed author(s):
  • Patrice Bougette

    (Université Côte d'Azur
    GREDEG CNRS)

  • Christophe Charlier

    (Université Côte d'Azur
    GREDEG CNRS)

The paper analyzes the interactions between trade and renewable energy policies based on the EU--China Solar Panel dispute which is the most significant antidumping (AD) complaint in Europe. We build a price competition duopoly model with differentiated products and intra-industry trade in photovoltaic equipment. We provide two relevant types of AD duties. The optimal AD which maximizes social domestic welfare always increases with the feed-in tariff (FIT) program set in the home country. The appropriate AD -- equalizing the foreign firm's price on the domestic market with the foreign market price -- decreases with the FIT program. We show that the optimal FIT increases with the AD duty. Therefore, trade and renewable energy optimal policies may complement one another. When setting AD duties in clean energy sectors, it is important not to ignore the extent to which renewable energy is subsidized.

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File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2017-17.pdf
File Function: First version, 2017
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Paper provided by Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis in its series GREDEG Working Papers with number 2017-17.

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Length: 25 pages
Date of creation: May 2017
Handle: RePEc:gre:wpaper:2017-17
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  16. Drechsler, Martin & Meyerhoff, Jürgen & Ohl, Cornelia, 2012. "The effect of feed-in tariffs on the production cost and the landscape externalities of wind power generation in West Saxony, Germany," Energy Policy, Elsevier, vol. 48(C), pages 730-736.
  17. Bernhofen, Daniel M., 1995. "Price dumping in intermediate good markets," Journal of International Economics, Elsevier, vol. 39(1-2), pages 159-173, August.
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