WTO Members, Not the Appellate Body, Need to Clarify Boundaries in Renewable Energy Support

What constitutes appropriate state measures for incentivizing renewable energy development and deployment?

This key question has been posed, not only by the sustainable development community, but even more so by governments and investors around the world. On May 6, 2013, all eyes were focused on the Appellate Body (AB) of the World Trade Organization (WTO), which gave its first ruling on measures affecting the renewable energy generation sector as part of a dispute brought by Japan and the European Union against Canada (Ontario). However, the AB ruling failed to provide legal clarification and interpretation of WTO rules related to sustainable energy. At the same time, parts of its analysis may have created a broad and potentially problematic carve-out of the subsidy agreement. This commentary analyzes what this ruling meant for the legal status of feed-in tariffs, and argues that WTO members, and not the AB, should clarify boundaries in renewable energy support.