Clash of Rationalities: Revisiting the trade and environment debate in light of WTO disputes over green industrial policy

Abstract

Climate Change has found its way into the World Trade Organization through the backdoor of the profitable and contentious trade in solar and wind energy technologies. In addition to the Ontario FIT dispute critically examined in this article, there are at least five other active disputes in Geneva over aspects of trade in wind and solar technologies, with more on the horizon.

Solar panels constitute a significant part of China’s total export sales in the EU and for more than two years its trade has overheated EU-China relations. The anti-dumping and anti-subsidy investigations that resulted have now culminated in a tentative settlement to bring Chinese solar panel prices to a “sustainable” level. Winds have been blowing more strongly on the other side of the Atlantic, though in a similar direction, where the US imposed record high rates of anti-dumping and countervailing duties on Chinese (and Vietnamese) wind towers, as well as silicon solar panels. The political economy unfolding in both cases has been quite similar: on one side - claiming unfair trade allegedly committed by the Chinese exporters - are the import-competing manufacturers of Renewable Energy (`RE’) technology, and on the other side, the rest of the RE industry, particularly generators in whose interest it is to have access to the best and cheapest equipment, regardless of origin.