On the heels of the recent global summit in Paris to tackle climate disruption, the World Trade Organization (WTO) has ruled against an important piece of the climate solution puzzle: India's ambitious program to create homegrown solar energy. The ruling shows that decades-old, over-reaching trade rules are out of sync with the global challenge to transition to 100 percent clean energy.
But today, the WTO released its
ruling against India's National Solar Mission, deciding that India's efforts to boost local production of solar cells violated WTO rules. Though India argued that the program helps the country to meet its climate commitments under the United Nations Framework Convention on Climate Change (UNFCCC), the WTO rejected that argument. Indeed, the ruling boldly states that domestic policies seen as violating WTO rules cannot be justified on the basis that they fulfill UNFCCC or other international climate commitments. In effect, the WTO has officially asserted that antiquated trade rules trump climate imperatives.
India also plans to use the solar program to establish "
a leadership role in low-cost, high quality solar manufacturing." In January 2015, President Obama seemed to indicate support for that goal. After a visit with Indian Prime Minister Modi, the two leaders released a
statement "emphasizing the critical importance of expanding clean energy research, development, manufacturing and deployment, which increases energy access and reduces greenhouse gas emissions." Their statement even declared, "the US intends to support India's [solar power] goal by enhancing cooperation on clean energy and climate change."
In 2014, however, the United States
launched a WTO case against India's ambitious solar program. The United States claimed that the "buy-local" rules of the first phases of the program, which say that power companies must use solar components made in India in order to benefit from the government-subsidized program, discriminate against U.S. solar exports. In its ruling, the WTO agreed that India's buy-local rules "accord less favorable treatment" to imported solar components, even while acknowledging that "imported cells and modules currently have a dominant share of the market for solar cells and modules in India." India has indicated that it may
alter its solar program to try to persuade the U.S. to drop the case. It is unclear whether the U.S. will accept the proposed changes, and what impact they may have on India's solar expansion plans.
Bringing this case is a perverse move for the United States.
Nearly half of U.S. states have renewable energy programs that, like India's solar program, include "buy-local" rules that create local, green jobs and bring new solar entrepreneurs to the economy. The U.S. government should drop this case to avoid undermining jobs and climate protections not just in India, but also at home.
Every country should have the right to set its own clean energy future. "Buy local" rules -- a standard policy tool to foster, nurture, and grow new industries -- can help push us toward the goal of 100 percent clean energy that our planet needs by cultivating domestic renewable energy firms that promote strong climate policies. "Buy local" policies can also benefit workers and bring in new constituencies to advocate for increased clean energy production. And by bringing more renewable energy goods producers like India to the global market, "buy-local" policies can encourage greater competition and innovation, reducing the cost of renewable energy over time.
Rather than reform this outdated model of trade that constrains climate progress, the
Trans-Pacific Partnership (TPP), a trade pact between the U.S. and 11 other Pacific Rim nations that could come before Congress this year, would expand the model. Indeed, the text of the controversial deal
replicates the very rules that the WTO used against India's solar program today. While many in Congress oppose the TPP, if the deal were to pass, we could see even more trade cases against clean energy initiatives.
