A Turquoise Mess: Green Subsidies, Blue Industrial Policy and Renewable Energy: The Case for Redrafting the Subsidies Agreement of the WTO

40 Pages Posted: 18 Feb 2014 Last revised: 28 Apr 2014

See all articles by Aaron Cosbey

Aaron Cosbey

International Institute for Sustainable Development (IISD)

Petros C. Mavroidis

Columbia University - Law School; European University Institute - Department of Law (LAW); European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS)

Date Written: February 1, 2014

Abstract

Canada-Renewable Energy presented the WTO Panel and Appellate Body (AB) with a novel issue: at the heart of the dispute was a measure adopted by the province of Ontario whereby producers of renewable energy would be paid a premium relative to conventional power producers. Some WTO Members complained that the measure was a prohibited subsidy because payments were conditional upon using Canadian equipment for the production of renewable energy. The AB gave them right only in part: it found that a local content requirement had indeed been imposed, but also found that it lacked evidence to determine whether a subsidy had been bestowed. The report is, for the reasons explained below, incoherent and could hardly serve as precedent for resolution of similar conflicts in the future. The facts of the case though, do raise legitimate questions both with respect to the specifics of the case, as well as of more general nature regarding the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), and the role of the judge when facing legislative failure. In this paper, we provide some responses to these questions in light of the theory and evidence regarding industrial policy in the name of environmental protection.

Keywords: WTO; subsidies; renewable energy

JEL Classification: F18, K32

Suggested Citation

Cosbey, Aaron and Mavroidis, Petros C., A Turquoise Mess: Green Subsidies, Blue Industrial Policy and Renewable Energy: The Case for Redrafting the Subsidies Agreement of the WTO (February 1, 2014). Robert Schuman Centre for Advanced Studies Research Paper No. 2014/17; Columbia Law and Economics Working Paper No. 473. Available at SSRN: https://ssrn.com/abstract=2397134 or http://dx.doi.org/10.2139/ssrn.2397134

Aaron Cosbey (Contact Author)

International Institute for Sustainable Development (IISD) ( email )

161 Portage Avenue East, 6th Floor
Winnipeg
Manitoba, R3B 0Y4, Manitoba
Canada

Petros C. Mavroidis

Columbia University - Law School ( email )

435 West 116th Street
New York, NY 10025
United States

European University Institute - Department of Law (LAW) ( email )

Via Bolognese 156 (Villa Salviati)
50-139 Firenze
ITALY

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

Villa La Fonte, via delle Fontanelle 18
50016 San Domenico di Fiesole
Florence, Florence 50014
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
249
Abstract Views
2,040
rank
127,784
PlumX Metrics