Canada – Renewable Energy: Implications for WTO Law on Green and Not-so-Green Subsidies

60 Pages Posted: 14 Nov 2014

See all articles by Steve Charnovitz

Steve Charnovitz

George Washington University - Law School

Carolyn Fischer

Resources for the Future

Multiple version iconThere are 2 versions of this paper

Date Written: November 13, 2014

Abstract

In the first dispute on renewable energy to come to WTO dispute settlement, the domestic content requirement of Ontario’s feed-in tariff was challenged as a discriminatory investment-related measure and as a prohibited import substitution subsidy. The panel and Appellate Body agreed that Canada was violating the GATT and the TRIMS Agreement. But the SCM Article 3 claim by Japan and the European Union remains unadjudicated, because neither tribunal made a finding that the price guaranteed for electricity from renewable sources constitutes a ‘benefit’ pursuant to the SCM Agreement. Although the Appellate Body provides useful guidance to future panels on how the existence of a benefit could be calculated, the most noteworthy aspect of the new jurisprudence is the Appellate Body’s reasoning that delineating the proper market for ‘benefit’ analysis entails respect for the policy choices made by a government. Thus, in this dispute, the proper market is electricity produced only from wind and solar energy.

Keywords: Feed-in-Tariff, Renewable Energy, Subsidies, International Trade, WTO, Green Growth, Local Content Requirement

JEL Classification: K33, Q48, Q56, Q58

Suggested Citation

Charnovitz, Steve and Fischer, Carolyn, Canada – Renewable Energy: Implications for WTO Law on Green and Not-so-Green Subsidies (November 13, 2014). FEEM Working Paper No. 94.2014. Available at SSRN: https://ssrn.com/abstract=2523814 or http://dx.doi.org/10.2139/ssrn.2523814

Steve Charnovitz

George Washington University - Law School ( email )

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Carolyn Fischer (Contact Author)

Resources for the Future ( email )

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HOME PAGE: http://www.rff.org/~fischer

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