WTO Rules Against U.S. Clean Energy Programs

GENEVA -- Today, the World Trade Organization (WTO) sided with India in response to the country’s 2016 WTO complaint against U.S. buy-local policies in eight state-level clean energy programs. The ruling threatens the future of the policies in California, Connecticut, Delaware, Massachusetts, Michigan, Minnesota, Montana, and Washington and opens the possibility of India eventually imposing trade sanctions against the U.S. Many U.S. states have renewable energy programs that include buy-local rules that create local clean energy jobs and bring new green entrepreneurs to the economy.

India originally filed the complaint in response to a U.S. case at the WTO against India’s common-sense solar energy initiative. The WTO ultimately ruled against India’s successful solar initiative

In response, Sierra Club Living Economy Program Director Ben Beachy released the following statement:

"The World Trade Organization’s reckless ruling against U.S. clean energy manufacturing is the latest evidence that we must rewrite outdated trade rules to support, not suppress, the transition to a clean energy economy. Unfortunately, Trump’s NAFTA 2.0 deal does the opposite -- it actually reinforces the very rules that the WTO used today to attack our efforts to support U.S. clean energy jobs. We can't afford yet another status quo trade deal that undercuts the clean energy transition. 

“We call on both the U.S. and India to drop their cases and for WTO countries to agree to stop using trade rules to attack pro-climate, pro-worker clean energy policies. To avoid doubling down on these antiquated rules in our own trade deals, leading members of Congress are absolutely right to reject Trump’s pressure to vote on his pro-polluter NAFTA 2.0.”  

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Background on the cases:

• Many U.S. states have buy-local requirements for renewable energy programs, which help to create clean energy jobs and cultivate clean energy entrepreneurs. India launched its WTO case against the U.S. over such buy-local renewable energy programs in eight states, as retaliation for the U.S.’s case. Here are examples of some of the programs in the named states:

• California has a successful rebate program that includes incentives for wind energy technologies manufactured in California.

• Washington has a similar program to encourage small-scale renewable energy production, with incentives for solar and wind components made in Washington.

• Minnesota also provides financial incentives to homeowners and businesses that install solar modules that are made in-state.

• Connecticut’s Green Bank, which provides financial assistance for renewable energy projects, is required by state law to prioritize projects with components manufactured in Connecticut.

• Michigan has an incentive program in which renewable energy generated from equipment made in-state receives an additional 10 percent of renewable energy credits for the first three years of operations.

• Delaware has a similar incentive program in which renewable energy providers receive an additional 10 percent of renewable energy credits where at least half of the cost of solar or wind installations is from equipment manufactured in-state.

• These WTO complaints and cases against buy-local renewable energy programs echo a 2013 WTO ruling against the buy-local provisions in a groundbreaking clean energy program in Ontario, which had successfully reduced climate-disrupting emissions while creating thousands of clean energy jobs. Three weeks after the WTO’s ruling, Ontario eliminated its “buy-local” provisions and ended incentives for large-scale clean energy projects.