In the run-up to the Paris talks at the end of the year, governments are preparing their strategies to negotiate national emissions reduction targets. But elsewhere, a different battle is unfolding as firms and governments compete to try to capture the benefits of the rise of the new green economy. A wave of trade disputes in clean energy industries is one result. Since 2010, at least 11 such cases have been initiated. Trade cases in solar photovoltaics, in particular, have emerged as some of the most politically charged in recent history.
Trade disputes over subsidies and price dumping have the potential to stymie the deployment of low-carbon energy technologies by increasing their price relative to fossil fuels. And they are unnecessary; most arise out of the assumption that the clean energy race is a zero-sum game between competing national and regional economies. But that isn’t how green industries work, and government policy needs to catch up with the reality that domestic firms (and efforts to protect the environment) benefit from free trade in the clean energy industry.