Financial Innovation, Climate Change and the GATS: The Case of Renewable Energy Certificates
30 Pages Posted: 23 Sep 2008
Date Written: September 23, 2008
Energy has come to the forefront of the public debate in the past decade for two main reasons: the first relates to the lack of a secure, continuous and unconditional energy supply in the demandeurs, mostly developed and transition economies, which are still dependent on non-renewable carbon-based fossil fuels. The second reason is that uncontrolled production, distribution and use of conventional energy may lead to environmental degradation and global warming. Renewable energy certificates (RECs) are instruments that allow countries to promote energy generation from renewables and can be part of domestic policies aimed at climate change mitigation and adaptation. Since RECs can be traded in secondary markets, this paper discusses issues raised by the nature of and the trade in RECs which can be of concern for the General Agreement on Trade in Services (GATS) and the multilateral regulation of trade in financial services, notably in the case where World Trade Organization (WTO) Members undertook sweeping commitments in financial services which equally apply to trade in RECs.
Keywords: climate change, renewable energy sources, green certificates, trading services, energy-related financial services, financial innovation, World Trade Organization (WTO), GATS
JEL Classification: F13, F15, F18, F21, F53, G18, G21, G24, G28, K32, K33, Q27, Q28
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