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Green Subsidies and the WTO

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  • Steve Charnovitz

Abstract

This paper provides a detailed explanation how the law of the World Trade Organization regulates environmental subsidies with a focus on renewable energy subsidies. The paper begins by discussing the economic justifications for such subsidies and the criticisms of them and then gives examples of different categories of subsidies. Next the paper provides an overview of the relevant WTO rules and caselaw, including the recent Canada -Renewable Energy case. The paper also makes specific recommendations for how WTO law can be improved, and discusses the existing literature discussing reform proposals. The study further finds that because of a lack of clarity in WTO rules, for some clean energy subsidies, a government will not know in advance whether the subsidy is WTO-legal.

Suggested Citation

  • Steve Charnovitz, 2014. "Green Subsidies and the WTO," RSCAS Working Papers 2014/93, European University Institute.
  • Handle: RePEc:rsc:rsceui:2014/93
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    References listed on IDEAS

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    1. John Zsyman & Mark Huberty & Arno Behrens & Bert Colijn & Richard Tol & Jorge Núñez Ferrer & Michel Aglietta & Jean-Charles Hourcade, 2012. "Green growth," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 47(3), pages 140-164, May.
      • J. Zsyman & M. Huberty & A. Behrens & B. Colijn & M. Aglietta & R.S.J. Tol & J.N. Ferrer & Jean Charles Hourcade, 2012. "Green growth," Post-Print hal-00716353, HAL.
    2. Matsushita, Mitsuo & Schoenbaum, Thomas J. & Mavroidis, Petros C., 2006. "The World Trade Organization: Law, Practice, and Policy," OUP Catalogue, Oxford University Press, edition 2, number 9780199284566.
    3. Bradly J. Condon, 2009. "Climate Change and Unresolved Issues in WTO Law," Journal of International Economic Law, Oxford University Press, vol. 12(4), pages 895-926, December.
    4. Heymi Bahar & Jagoda Egeland & Ronald Steenblik, 2013. "Domestic Incentive Measures for Renewable Energy With Possible Trade Implications," OECD Trade and Environment Working Papers 2013/1, OECD Publishing.
    5. Green, Andrew, 2006. "Trade rules and climate change subsidies," World Trade Review, Cambridge University Press, vol. 5(3), pages 377-414, November.
    6. Goode,Walter, 2007. "Dictionary of Trade Policy Terms," Cambridge Books, Cambridge University Press, number 9780521885065, April.
    7. Annamaria La Chimia & Sue Arrowsmith, 2009. "Addressing Tied Aid: Towards a More Development-Oriented WTO?," Journal of International Economic Law, Oxford University Press, vol. 12(3), pages 707-747, September.
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    9. Paolo D. Farah & Elena Cima, 2013. "Energy Trade and the WTO: Implications for Renewable Energy and the OPEC Cartel," Journal of International Economic Law, Oxford University Press, vol. 16(3), pages 707-740, September.
    10. Goode,Walter, 2007. "Dictionary of Trade Policy Terms," Cambridge Books, Cambridge University Press, number 9780521712064, April.
    11. Matsushita, Mitsuo & Schoenbaum, Thomas J. & Mavroidis, Petros C., 2006. "The World Trade Organization: Law, Practice, and Policy," OUP Catalogue, Oxford University Press, edition 2, number 9780199208005.
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    14. Aaditya Mattoo & Arvind Subramanian, 2013. "Four Changes to Trade Rules to Facilitate Climate Change Action," Policy Briefs PB13-10, Peterson Institute for International Economics.
    15. Gary Clyde Hufbauer & Steve Charnovitz & Jisun Kim, 2009. "Global Warming and the World Trading System," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 4280, July.
    16. Luca Rubini, 2012. "Ain't Wastin' Time No More: Subsidies for Renewable Energy, The SCM Agreement, Policy Space, and Law Reform," Journal of International Economic Law, Oxford University Press, vol. 15(2), pages 525-579, June.
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    Cited by:

    1. Fischer, Carolyn & Greaker, Mads & Rosendahl, Knut Einar, 2017. "Robust technology policy against emission leakage: The case of upstream subsidies," Journal of Environmental Economics and Management, Elsevier, vol. 84(C), pages 44-61.

    More about this item

    Keywords

    international trade; international law; environmental protection; climate; subsidies; trade law;

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