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Ain't Wastin' Time No More: Subsidies for Renewable Energy, The SCM Agreement, Policy Space, and Law Reform

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  • Luca Rubini

Abstract

Assuming that certain subsidies to support renewable energy may be 'good', the central question of this article is whether World Trade Organization (WTO) subsidy disciplines recognize this and offer appropriate policy space to Members. The analysis reveals that the situation is one of diffuse legal uncertainty, if not outright conflict between policy prescriptions and trade law requirements. The argument of the article is that the uncertainty of the legal assessment in itself produces a constraint on policy space. Some issues may be clarified through litigation but this is not the optimal approach since disputes are subject to many vagaries and may offer, at best, piece-meal and partial solutions. The pressure put on the judiciary should also not be underestimated. The analysis of the credible but controversial possibility of resorting to GATT Article XX to justify certain subsidies is the best example in point. The unsatisfactory nature of the legal framework is not merely hypothetical since subsidies for renewable energy are increasingly subject to disputes at both WTO and national levels. Against this scenario of inadequate legal framework and increasing litigiousness, law reform emerges as the first-best alternative. It is claimed that what is needed is a legal shelter that, in a clear and positive way, defines what types of subsidies supporting renewable energy are legitimate and permitted. The Author 2012. Published by Oxford University Press. All rights reserved., Oxford University Press.

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  • 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.
    • Handle: RePEc:oup:jieclw:v:15:y:2012:i:2:p:525-579
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    File URL: http://hdl.handle.net/10.1093/jiel/jgs020
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    Citations

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    Cited by:

    1. Bougette, Patrice & Charlier, Christophe, 2015. "Renewable energy, subsidies, and the WTO: Where has the ‘green’ gone?," Energy Economics, Elsevier, vol. 51(C), pages 407-416.
    2. Carolyn Fischer, 2017. "Environmental Protection for Sale: Strategic Green Industrial Policy and Climate Finance," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(3), pages 553-575, March.
    3. Steve Charnovitz, 2014. "Green Subsidies and the WTO," RSCAS Working Papers 2014/93, European University Institute.
    4. Ornelas, Emanuel & Puccio, Laura, 2020. "Reopening Pandora's Box in Search of a WTO-Compatible Industrial Policy? The Brazil–Taxation Dispute," World Trade Review, Cambridge University Press, vol. 19(2), pages 249-266, April.
    5. Fischer, Carolyn, 2016. "Strategic Subsidies for Green Goods," RFF Working Paper Series dp-16-12, Resources for the Future.
    6. Ornelas, Emanuel & Puccio, Laura, 2019. "Reopening Pandora’s Box in Search of a WTO-Compatible Industrial Policy? The Brazil -Taxation Dispute," CEPR Discussion Papers 14042, C.E.P.R. Discussion Papers.
    7. Thijs Van de Graaf & Harro van Asselt, 2017. "Introduction to the special issue: energy subsidies at the intersection of climate, energy, and trade governance," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(3), pages 313-326, June.
    8. Charnovitz, Steve, 2014. "Green subsidies and the WTO," Policy Research Working Paper Series 7060, The World Bank.
    9. Dirk Bièvre & Ilaria Espa & Arlo Poletti, 2017. "No iceberg in sight: on the absence of WTO disputes challenging fossil fuel subsidies," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(3), pages 411-425, June.
    10. Agnieszka Hajdukiewicz & Bożena Pera, 2020. "International Trade Disputes over Renewable Energy—the Case of the Solar Photovoltaic Sector," Energies, MDPI, vol. 13(2), pages 1-23, January.

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