Disciplines On Renewable Energy Industry Subsidies Within The WTO Framework

As a policy response to energy security concerns and climate change, the introduction of various domestic incentive measures to promote renewable energy has become common all over the world. The renewable energy industry has its own unique characteristics, the high early investment makes it difficult to compete with traditional fossil fuels.Subsidy is necessary for the prosperity and development of the Renewable industry. When a renewable energy incentive affects the world market, it must be regulated by world trade rules. The increasing renewable energy trade also stimulates the disputes of renewable energy. Due to the WTO cases in recent years involving renewable energy surge, the world’s renewable energy industry has brought huge losses. Therefore, study of renewable energy subsidies within the WTO framework is particularly important.Starting with the definition of subsidy under Agreement on Subsidies and Countervailing Measures(SCM Agreement), we analyze the steps of the legal analysis that need to be followed to determine whether a certain form of renewable energy support does amount to an subsidy. We explore the compliance of renewable energy incentives from aspects of “financial contribution”, “benefit conferred”, “specify”.We concluded that renewable energy incentives have not been offered a safe haven,especially the GATT XX hardly apply to it.Giving that renewable energy incentive measures are likely to result in trade disputes and hence it is necessary to improve the WTO system. Setting of guidelines in the selection of out-of-country benchmarks and recalling the Non-action subsidy may be options. Scholars are calling for a new renewable energy subsidy discipline according to the EU model and The Agreement on Agriculture.China have come under immense disputes of renewable energy, As such, this thesis aims to apply the WTO’s anti-subsidy rules as they currently stand to China’s green sector governmental subsidies. We found that China’s renewable energy industry still exist lots of problems. Hence we need to reform our renewable energy incentives to try to make it consistent with WTO subsidy rules.