Energy Subsidies & Trade

Can the international trade system be a catalyst for reforming fossil fuel subsidies (FFSs) to help relieve the burden on the public purse, reduce local and global air pollution, improve energy security and tackle climate change?

For decades, the trajectories of fossil fuel subsidies and world trade have been closely interwoven.

Geneva, Switzerland—29 April 2013—The World Trade Organization (WTO) and the Energy Charter organized a workshop to discuss how WTO regulation and the Energy Charter Treaty (ECT) apply to trade and investment in energy.

Japan recently announced that consultations had failed to resolve its dispute with Canada over the Province of Ontario’s feed-in-tariffs for renewable energy, and that in mid-June it will be asking the WTO to establish a dispute settlement panel. This is awful news for the multilateral trade system, for which the dispute will be corrosive, seemingly pitting trade against the environment.

In the past two months, the U.S. Congress has decided to continue paying Brazilian cotton farmers US$ 147 million a year; speculation intensifies as the United States enters into consultations with China over subsidies for wind energy; and the American Soybean Association makes noises about the potential trade impacts of the European Union’s Renewable Energy Directive.

In the past two months, Japan has accused Canadian province Ontario of breaking WTO rules in its support for renewable energy; and the United States has launched an investigation into Chinese support for green industries more generally. Find out why in the WTO Subsidy Dispute Round-up.

This September, the International Food and Agriculture Trade Policy Council (IPC) released a report about biofuel subsidies and international trade, Biofuel and Biomass Subsidies in the U.S., EU and Brazil: Towards a Transparent System of Notification.