Research On The Legal Issues Of Renewable Energy Subsidies

Sufficient and sustainable energy supply is the premise and guarantee of sustainable development of social economy.With the development of global economy,social progress and the improvement of energy consumption,the imbalance between energy demand and production is becoming more and more serious.There are many different sources of energy.At present,the world’s energy use largely depends on fossil fuels.The use and combustion of a large number of fossil fuels will bring serious environmental pollution and damage such as acid rain and haze,and the large amount of carbon dioxide produced will cause global "Greenhouse Effect".The climate change brought by "Greenhouse Effect" is the biggest threat to human beings,which endangers the ecological security of the earth and the survival and development of human beings.It has attracted the attention of the international community.The large-scale use of fossil fuels not only causes serious environmental and climate problems,but also faces the problem of energy depletion caused by non-renewable.The large-scale use of fossil fuels not only causes serious environmental and climate problems,but also faces the problem of energy depletion caused by non-renewable.The oil crisis in the 1970 s not only brought about the emergence of energy crisis,energy security and other issues in the international community,and also made many countries more aware of the sustainability of energy supply and the importance of developing new energy.The frequent nuclear accidents around the world,especially the leakage of Fukushima nuclear power plant in Japan,have led to human distrust of nuclear energy safety.Some countries have announced the "Abandonment of Nuclear Power" and made efforts to realize the transformation from nuclear power to renewable energy.Therefore,looking for alternative energy has become the only way for sustainable economic and social development of all countries.The advantages of low-carbon,clean and sustainable renewable energy have won the favor of all countries in the world.The development of renewable energy has gradually expanded from individual countries and some regions in the past to the concerted action of all countries in the world.All countries attach great importance to the development of renewable energy.Through the development of renewable energy industry,we can reduce the dependence of energy import,ensure the energy security of our country,promote energy transformation,protect the environment and ecology,realize sustainable development,form new economic growth points,and improve the quality of economic development.The renewable energy industry is characterized by high initial investment cost,great influence of technological innovation and progress,and long-term cost reduction space.Therefore,the economic benefits of renewable energy need long-term development and accumulation.The huge investment and R & D cost bring great economic pressure to the renewable energy industry in the initial stage,which makes it difficult to compete with the traditional energy in the market economy.Considering the characteristics of renewable energy industry,as well as the environmental,ecological and economic value brought by the development of renewable energy industry,various countries have introduced various laws and policies to support the development and expansion of renewable energy industry.The development and use of renewable energy,as one of the contents of the fourth industrial revolution in the future,reflects the requirements of sustainable development.It can be said that whoever takes the lead in the field of development and use of renewable energy will gain an advantageous position in the scientific and technological revolution characterized by green,intelligent and sustainable.All countries in the world are not only the interest community of climate sustainable development,but also the interest individuals of economic and social competition.In the era of anti-globalization,there are competition relations between countries in the field of developing renewable energy and its industry,as well as in the field of competing for the international market of renewable energy products and equipment.As a common government incentive measure,subsidy has become a common means for countries to promote the development of renewable energy and its industry.With the continuous development of renewable energy and its related technologies,the renewable energy industry in various countries has developed to different degrees.Whether the subsidy measures can still be used and how to use them have become the concern of scholars in academic area.In the field of international trade,the emergence of renewable energy subsidies disputes raises questions about the compliance of renewable energy subsidies in various countries.Under the background that all countries generally give subsidies to renewable energy and its industry,compared with fossil energy subsidies with more negative environmental effects,why are renewable energy subsidies frequently sued in international disputes is the starting point of this paper to study the international renewable energy subsidies.From GATT to WTO,the world’s largest multilateral trade organization has experienced more than 70 years of development.WTO has established an order in the field of international trade and contributed to the development of world economy and the maintenance of world peace.Its detailed system and extensive practice of dispute settlement mechanism have become the "Model International Law" observed by members in the era of globalization.However,with the development of practice,the ossification of the existing WTO system,and the difficulty of reaching new rules make the members have doubts about "where the WTO is going".It is difficult for the dispute settlement body to complete the recognition of renewable energy subsidies and carry out compliance demonstration,which is the confirmation and miniature of the existing system of WTO.In comparison to the difficulty to reach the corresponding multilateral economic and trade rules,the development of regional trade agreements is in full swing.The United States,the European Union and Japan led or participated in TPP,CPTPP,USMCA and EPA negotiations,and reached a series of high standard regional trade agreements.When it comes to the field of renewable energy subsidies,the above-mentioned regional trade agreements have in fact changed the subsidy system under the framework of WTO through the design of rules such as "Non-Commercial Assistance Rules","Environmental Clauses" and "General Exception Clauses",reflecting the strategic intention of advanced developed countries to seize the discourse power of international economic and trade rules in the 21 st century.Although at present,the relative principles of these RTAs have not been applied in dispute practice,it may be only a matter of time before the relevant provisions of RTAs are extended considering the formation process of multilateral economic and trade rules.Advanced developed countries,while promoting the development of economic and trade rules at the multilateral and bilateral levels,have also been developing the renewable energy subsidy system at the domestic level.By comprehensively using laws and policies,they have designed a renewable energy subsidy system covering R & D,investment,production and sales,which not only guarantees the development of domestic renewable energy and its industry,but export their system design of " Feedin Tariff " and " Renewable Portfolio Standard " to the world.This has been leading the way in domestic legal system design.Nowadays,after long-term development and subsidy support,advanced developed countries have mastered more core technologies of renewable energy,and some types of renewable energy industries have the strength to participate in free market competition.Therefore,it is not difficult to find the overall design map of advanced developed countries in the field of renewable energy subsidy Law: firstly,gradually incorporate market factors into the original renewable energy subsidy system at the level of domestic legal system,so as to achieve survival of the fittest,and enhance the competitiveness of mature renewable energy industry;secondly,grasp the existing multilateral economic and trade rules,and launch renewable energy measures for other countries;thirdly,formulate high standard provisions that are conducive to the development of renewable energy industry and seize the "Legislative Power" of international economic and trade rules in the 21 st century through the practice of regional trade agreements.China is a developing country with a large population.The rapid development of economy has brought huge energy consumption.China has become the largest energy consumer in the world.Huge energy consumption has brought a lot of pollutants and greenhouse gas emissions.The problems of environment and resources have become the bottleneck restricting China’s sustainable development.Energy security is the first issue to be considered in the national energy development.In the case of nuclear energy security being questioned,the development of renewable resources industry has become the only way to protect environmental resources and realize the coordinated development of economic and social environment.China is now the largest renewable energy producer in the world.In recent years,China has also become the largest investor in the field of renewable energy development,and the renewable energy industry in China has developed rapidly.However,in recent years,with the rise of trade protectionism from time to time,China’s renewable energy products and equipment have been subject to anti subsidy lawsuits repeatedly in the world.The ultimate goal of studying international legal system is to connect with international economic and trade rules,develop and improve China’s renewable energy subsidy system,and help the development of China’s renewable energy and its industry.The legal system of subsidy and countervailing is "Imported" to China,and the regulations of the people’s Republic of China on Countervailing has not been updated since 2004.China’s renewable energy subsidy system is lack of systematization.Renewable energy subsidy system is scattered in laws and policies,and mostly appears in the form of policies.Compared with the advanced developed countries,the degree of legalization is obviously insufficient,and the compliance of some systems needs to be demonstrated.The limitation of the system will inevitably affect the effect of practice.The phenomenon of "Abandoning Wind and Light" in practice is not only the overall system design issue of power consumption,but also the practice questioning the rationality of the existing renewable energy subsidy system.How to connect with international economic and trade rules,develop and improve the renewable energy subsidy system in China,has become the starting point of this paper’s research on renewable energy subsidy at the domestic level.Therefore,this paper will find the institutional basis for renewable energy subsidies in the framework of the existing multilateral trading system.Considering the practice of renewable energy subsidies disputes,it will analyze the demonstration path and institutional issues of renewable energy subsidies compliance and summarize the development trend of regional trade agreements and the domestic laws of typical developed countries,so as to promote multilateral renewable energy subsidies and push forward the development and perfection of subsidy system of renewable energy in China,which is the scientific system guarantee for the development of renewable energy and its industry in China.From the perspective of law,this paper focuses on the legal issues of renewable energy subsidies.It discusses the value of renewable energy and its subsidies,the relationship between the implementation of renewable energy subsidies and trade liberalization,analyzes the relevant systems of renewable energy subsidies under the framework of WTO,and sums up the compliance theory of renewable energy subsidies under the framework of WTO taking into consideration the practice of renewable energy subsidies and WTO system.In this paper,the relevant systems of renewable energy subsidies in regional trade agreements is studied and reference for multilateral system innovation from various sides and bilateral levels is provided.It is also discussed that the specific nature of renewable energy subsidies,the relationship between non-actionable subsidies and renewable energy subsidies,and the relationship between renewable energy subsidies and Article 20 of GATT 1994,based on which the suggestions are put forward for the development of renewable energy subsidy compliance demonstration.The compliance of China’s renewable energy subsidy legal system and policy measures is examined against the existing rules system and case practice of WTO,and the systematicness and scientificity of China’s renewable energy legal system is examined based on the legislation and practice of other countries,so as to provide proposal on the improvement and renew of China’s renewable energy subsidy system,the resolution of energy subsidy issues and the development of renewable energy industry.When it comes to the detail,this paper consists of the following five chapters.The first chapter clarifies the topic to be addressed in this research.Starting from a clear definition of renewable energy and renewable energy subsidies,it builds a solid theoretical foundation for further study.With the analysis of the necessity of developing renewable energy,it can be found that the increasingly prominent problems of environment,climate and resources and the borderless characteristics of environmental problems have become the consensus of the international community to seek for the development of alternative energy and vigorously develop possible renewable energy.Considering the two economic theories of "Infant Industry Theory" and "Externality Theory",the government adopts corresponding protection measures to rationalize the final cost of energy products through "Tangible Hand" so as to create a good environment for the development of renewable energy industry,which conforms to the fair value and rational spirit of natural law,and embodies the core demands of natural law.With the support of comprehensive policies,the competitiveness of renewable energy industry gets improvement space and has also the possibility to be realized,and the recognition of the international community is also becoming high.As a common government intervention and regulation measure,the necessity of renewable energy subsidies has also been realized in practice.However,there are frequent disputes on renewable energy subsidies,trade remedy measures and trade disputes.Renewable energy subsidies are "deeply involved" in international legal disputes.The compliance of renewable energy subsidies is questioned,which makes it the motivation for further research on renewable energy subsidies legal issues.The second chapter focuses on the application of renewable energy subsidy system under the framework of WTO.In the first section,it analyzes the rules related to renewable energy subsidy in SCM Agreement,GATT 1994,GATS and Agricultural Agreement under the framework of WTO and the applicability of renewable energy subsidy.It is found that except SCM Agreement,the subsidy rules in other agreements can not provide sufficient support for the recognition of renewable energy subsidy.In addition to the "Green Box" domestic support measures in the “Agricultural Agreement”,there are no subsidy rules that affirm the environmental value and positive externality of renewable energy subsidies in other covered agreements.In view of the specificity of the application objects of the Agricultural Agreement,there are no special subsidy rules applicable to renewable energy subsidies under the current WTO framework.From the institutional perspective,it can be further improved.The determination and demonstration of the subsidies for renewable energy follow the general rules of the determination and demonstration of subsidies.In the second section,combined with the practice of WTO dispute settlement,taking "Canada renewable energy case" as an example,this paper analyzes in detail the demonstration rules of renewable energy subsidy compliance determined in the practice of WTO dispute settlement,and combines the positive and negative evaluation of DSB ruling to determine the value of both the demonstration rules of compliance,and points out the problems therein;and in combination with WTO,it is found that the subsidy disputes of renewable energy are characterized by "non-subsidy" treatment and high frequency embedded in "Domestic Content Requirement".Now,the development of the compliance demonstration path of renewable energy subsidies under the WTO framework presents a "stagnant" state.Combined with the practice and development of the reflection system itself,it is found that there are limitations in the recognition of subsidy and subsidy classification system under the WTO framework,which is not conducive to the compliance demonstration of renewable energy subsidies,and there is no way to provide exemption opportunities for renewable energy subsidies within the existing subsidy system framework.The demonstration method of renewable energy subsidy compliance formed in DSB practice is the most helpless but positive choice made according to the subsidy system under the current WTO framework.Although this demonstration method temporarily constructs a temporary green safety net for nonprohibited renewable energy subsidies,it is still not the fundamental way to solve the problem and ensure long-term development.The third chapter focuses on the development of renewable energy subsidy system from the perspective of "plurilateral,bilateral" regional trade agreements and "unilateral" domestic laws,systematically combing the characteristics and development trend of renewable energy subsidy system in key regional trade agreements and typical developed countries.In the "plurilateral,bilateral" dimension,the system innovation of regional trade agreements,in fact,has expanded the subsidy system under the WTO framework,integrated environmental factors into the subsidy system from the entity level,changed the way of subsidy identification of state-owned enterprises through the design of non-commercial assistance system,and highlighted the importance of transparency principle from the procedural level.To be sure,many countries(regions)have realized that the subsidy system under the existing WTO framework can not meet the needs of renewable energy subsidy recognition,and have made positive institutional development attempts in regional trade agreements,which provides development ideas for trying institutional innovation at the multilateral level.As it should be,the design of many innovative rules in RTAs is not perfect.Compared with the subsidy system under the framework of WTO,they are relatively more principled.There are no dispute cases to apply these innovative rules in practice,so how to use and interpret the rules remains to be practiced.In the "unilateral" dimension,the illustrated countries have given various forms of subsidies to renewable energy and have a self-contained renewable energy subsidy system.For example,the illustrated countries have a high degree of legalization of existing renewable energy subsidies,and the laws and policies of renewable energy subsidies have jointly built a system.The illustrated countries learn from each other in their systems.The same subsidy system is not a universal golden rule,which needs to be applied by specific countries according to the actual situation of their energy market.Nowadays,market factors are gradually and fully integrated into the national renewable energy subsidy system of the illustrated countries.According to the logic of Infant Industry Theory,it can be predicted that with the development of renewable energy industry,the scale and quantity of subsidies are decreasing no matter what the specific renewable energy subsidy system is implemented in a country,and the renewable energy industry is finally facing the free market where competitiveness determines survival.To grasp the content and development trend of renewable energy system in the illustrated countries is of great reference value to the multilateral level’s institutional innovation and China’s relevant institutional development.According to the development dilemma and system application of renewable energy subsidy,referring to the development practice of relevant systems in non-multilateral perspective,and based on the WTO legal system,in the fourth Chapter it makes clear the direction of the development of renewable energy subsidy system in multilateral perspective from two aspects: renewable energy subsidy system innovation and general exception clause system innovation.The first section focuses on the innovation of renewable energy subsidy system.Through the restoration and revision of nonactionable subsidy system,green space has been built for renewable energy subsidies with environmental protection and scientific research value;special treatment has been achieved for renewable energy products through the negotiation perspective of “Environmental Goods Agreement”;special rules have been designed for renewable energy subsidies by referring to the classification mode of “Agricultural Agreement” to provide development ideas for the innovation of renewable energy subsidy system.Considering the current situation that "renewable energy subsidies with ’Domestic Content Requirement’ cannot be remedied within the scope of subsidy system",in section 2 it attempts to find the institutional basis for the demonstration of renewable energy subsidies with "Domestic Content Requirement" outside the subsidy system according to the characteristics of renewable energy subsidy disputes under the framework of WTO.Following the EPA’s practice of absorbing general exceptions,the application relationship between Article 20 of GATT 1994 and SCM Agreement under the framework of WTO is analyzed.And by summing up the practical application effect of Article 20 of GATT 1994,it establishes the development path of renewable energy subsidy invoking Article 20 of GATT 1994 from two "Mutatis Mutandis" modes of application method change and article modification.Although there are many obstacles in the innovation of renewable energy subsidy system,we should have the vision and courage of system innovation to provide development ideas and direction guidance for the legitimacy demonstration of renewable energy subsidy.Considering the tide of Deglobalization development,the reform of multilateral system has a long way to go and it is not possible to accomplish it overnight.It should be the combined practice of multilateral,plurilateral,bilateral and domestic laws with the revision of principle orientation as the starting point to clarify the basic direction of system reform,so as to realize the development process from principle formation to principle acceptance,then to rule formation to rule acceptance,with strategies and methods to achieve the goal of gradual reform of multilateral economic and trade rules.Based on the system design in Chapter 4,this paper concludes that the compliance demonstration of renewable energy subsidies can be summarized as the following: first,the disputes of renewable energy subsidies need the innovation of multilateral rules,and the existing system and practice of WTO will become an important reference no matter whether they are finally solved in the WTO platform;second,within the framework of the existing multilateral subsidy system,the most urgent thing is to pay attention to the establishment of non-actionable subsidy system creates green space for renewable energy subsidies on the basis of principle revision;third,renewable energy subsidies with "Domestic Content Requirement" can be applied on the basis of "Mutatis Mutandis" to Article 20 of GATT 1994,so as to provide another opportunity for exemption of such measures at the system level.The development of China’s renewable energy subsidy system started late.The existing system includes two aspects of laws and policies and is mainly policy-based.Based on the systematic review of China’s renewable energy subsidy laws and policies,combined with the development of Feed-in tariff and specific types of renewable energy subsidy system,the fifth chapter summarizes three development trends of China’s renewable energy subsidy system: the transformation of renewable energy subsidy system to the direction of "government oriented and market-oriented simultaneously";active complying with the country international economic and trade rules;integration of "low carbon environmental protection" and "energy conservation and emission reduction".China’s existing renewable energy subsidy system has two obvious deficiencies: the low degree of legalization and the scientific content of the system to be improved.Based on the value of renewable energy,China’s demand for renewable energy and its industrial development,and the emergence of international trade disputes in renewable energy subsidies areas,the second section of this chapter puts forward suggestions for the development and improvement of China’s renewable energy subsidy system.First,we need to promote the gradual reform of China’s renewable energy subsidy system.Under the guidance of the basic ideas of "abiding by the obligations of international law","learning from other countries’ beneficial practices" and "adhering to the idea of adjusting measures to local conditions",we should focus on improving the legal level of China’s renewable energy subsidy system and the scientific content of China’s renewable energy subsidy system in view of the system problems raised in section One and pay special attention to the content of renewable energy subsidy system suspected of "Domestic Content Requirement".Second,we should help the development and innovation of the international renewable energy subsidy system,actively pay attention to and participate in the development and innovation of the multilateral and regional renewable energy subsidy system under the guidance of "firm multilateral position" and "adhere to the basic idea of international cooperation",and give advice to the "Non-Commercial Assistance Rules" and "renewable energy market benchmark" in the development process of multilateral and regional trade agreements.Special attention has been paid to the development prospects of China EU energy cooperation platform under the background of "the ’Belt and Road’ Initiative" energy international cooperation.China is an important member of the WTO,as well as the actual beneficiary and firm supporter of the multilateral trading system.The design of China’s program around the reform of the WTO renewable energy subsidy system is not only an important measure to fulfill the responsibility of the major countries and to speak on behalf of the developing countries,but also an important measure to strive for the right to speak of the new rules of international trade and economic cooperation in the 21 st century.No matter where the WTO will eventually go,multilateral economic and trade organizations and multilateral economic and trade rules are indispensable.In the present and future of the reconstruction of multilateral economic and trade rules,maintaining attention,continuous participation and active voice are all positive actions to avoid becoming "passive recipients" of the new multilateral economic and trade rules.In the innovation of international renewable energy subsidy system,submitting China’s scheme design is not only a beneficial attempt to contribute China’s wisdom,but also a practical action to strengthen the position of multilateral economic and trade negotiations.China should pay close attention to the latest achievements and development trend of negotiations among CPTPP,USMCA and EPA,understand the institutional innovation and development trend of RTAs in the field of renewable energy subsidies,and take precautions.Furthermore,China should integrate energy cooperation and renewable energy system in its own RECP negotiations and "the ’Belt and Road’ Initiative",and actively try to develop the regional renewable energy subsidy system.In the future,human civilization will inevitably enter a new energy era,but the road to this new energy is not an overnight thing.Today’s new energy,after the development of science and technology,may be included in the category of renewable energy,and will bring new content to the existing renewable energy subsidy system.Even at present,fossil energy is still the main consumption energy in the world,and the development and expansion of renewable energy still depend on scientific and technological innovation and policy support.Therefore,firstly,we need to take overall consideration and follow the energy development law,pay attention to the construction of traditional energy legal system,and fully play the role of "bridge" of traditional energy in entering the new energy era;secondly,we need to provide sufficient system development space for the development and industrialization of renewable energy along with the development of science and technology,pay attention to the legislative needs in the field of new energy,show the foresight of the system,and help the construction and development of the national energy legal system in many ways;thirdly,we need to pay full attention to the construction and development of the legal system in the aspects of efficient utilization,energy saving and ecological tax,so as to build a more comprehensive system for the construction of legal system for renewable energy.