International Trade Disputes on Renewable Energy: Testing Ground for the Mutual Supportiveness of WTO Law and Climate Change Law

AuthorKati Kulovesi
Date01 November 2014
Published date01 November 2014
International Trade Disputes on Renewable Energy:
Testing Ground for the Mutual Supportiveness of
WTO Law and Climate Change Law
Kati Kulovesi*
This article explores the relationship between renew-
able energy support policies and World Trade Organi-
zation (WTO) law on unfair trade practices. It analyzes
the Canada-Renewable Energy case at the WTO, where
an open conflict between trade rules and climate policy
was arguably avoided only through a heavily criticized
interpretation of the definition of subsidies by the WTO
dispute settlement bodies. It draws attention to broader
challenges in the relationship between renewable
energy support policies and the current WTO subsidies
law. The article also discusses the AD590-Solar Panels
trade dispute between the European Union and China,
examining the complex relationship between cheap
solar panel exports, anti-dumping duties and EU
climate policy objectives.
Renewable energy is emerging as a prominent trade
issue. Viewed in the context of the 20-year history of the
World Trade Organization (WTO), it is arguably guiding
the trade and environment debate towards those areas
of WTO law dealing with unfair trade practices. Building
on the tuna-dolphin1and shrimp-turtle2cases, the trade
and environment debate has traditionally tended to
focus on trade bans and other environmentally moti-
vated trade measures targeting processes and produc-
tion methods (PPMs). Analogous legal questions have
thus far dominated the discussion on the WTO and
climate change, where trade bans and border carbon
adjustments (BCAs) feature among the key topics.3
However, the continuing scholarly emphasis on such
politically controversial but practically non-existent
climate policies seems disproportionate in the current
climate policy context.4The idea of trade bans and BCAs
gained prominence in a particular historical situation
where the free-rider problem in global climate policy
was particularly eminent.5Notably, there are no current
examples of such climate policies; partly because trade
bans and BCAs are not considered to be the most effec-
tive means to mitigate climate change; and partly
because all major emitters have subsequently started
implementing domestic policies to reduce greenhouse
gas emissions, making finger-pointing more difficult.6
By contrast, government policies to boost renewable
energy and clean technology are emerging as the most
concrete testing ground for assessing the mutual
supportiveness of WTO rules and climate change law.7
Renewable energy plays an important role in the
climate policy portfolios of key greenhouse gas emit-
ters, including Brazil, China, the European Union (EU)
* Corresponding author: Kati Kulovesi, Centre for Climate,
Energy and Environmental Law, School of Law, University of
Eastern Finland, PO Box 111, FI-80101 Joensuu, Finland. Email:
1GATT Panel 3 September 1991, United States – Restrictions on
Imports of Tuna, DS21/R-39S/155.
2WTO AB 12 October 1998, United States – Import Prohibition of
Certain Shrimp and Shrimp Products, WT/DS58/AB/R.
3See, e.g., T. Epps and A. Green, Reconciling Trade and Climate:
How the WTO Can Help Address Climate Change (Edward Elgar,
2010), at 56 and 122; L. Tamiotti, ‘The Legal Interface between
Carbon Border Measures and Trade Rules’, 11:5 Climate Policy
(2011), 1202; S. Monjon and P. Quirion, ‘A Border Adjustment for the
EU ETS: Reconciling WTO Rules and Capacity to Tackle Carbon
Leakage’, 11:5 Climate Policy (2011), 1212; and R. Leal-Arcas, ‘Uni-
lateral Trade-related Climate Change Measures’, 13:6 Journal of
World Investment and Trade (2012), 888.
4K. Kulovesi, ‘Real or Imagined Controversies? A Climate Law Per-
spective on the Growing Links between the International Trade and
Climate Change Regimes’, 6:1 Trade Law and Development (2014,
7This is also ref‌lected in recent publications. See, e.g., A. Cosbey
and P.C. Mavroidis, ‘A Turquoise Mess: Green Subsidies, Blue Indus-
trial Policy and Renewable Energy: The Case for Redrafting the
Subsidies Agreement of the WTO’, 17:1 Journal of International Eco-
nomic Law (2014), 11; R. Pal, ‘Has the Appellate Body’s Decision in
Canada-Renewable Energy/Canada-Feed-in Tariff Program Opened
the Door for Production Subsidies?’, 17:1 Journal of International
Economic Law (2014), 125; L. Rubini, ‘Ain’t Wastin’ Time No More:
Subsidies for Renewable Energy, the SCM Agreement, Policy Space
and Law Reform’, 15:2 Journal of International Economic Law (2012),
525; R. Leal-Arcas and A. Filis, ‘Certain Legal Aspects of Multilateral
Trade System and the Promotion of Renewable Energy’, in: C.L. Lim
and B. Mercurio (eds.), International Economic Law after the Crisis: A
Schizophrenic Science (Cambridge University Press, 2014, forthcom-
ing), found at: <
_id=2380517>; L. Rubini, ‘What Does the Recent WTO Litigation on
Renewable Energy Subsidies Tell Us about Methodology in Legal
Analysis’, 48:5 Journal of World Trade (2014), 895; A. Kent, ‘The
WTO Law on Subsidies and Climate Change: Overcoming the Dis-
sonance?’, 5:2 Trade Law and Development (2013), 344.
Review of European Community & International Environmental Law
RECIEL 23 (3) 2014. ISSN 2050-0386 DOI: 10.1111/reel.12092
© 2014 John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA.

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