24. India’s Solar Plans Blocked by US Interests, WTO

by Project Censored
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The United Nations Conference on Climate Change, held in December 2015 in Paris, featured lofty rhetoric about international cooperation to tackle climate change, including overtures by the US and other nations to include India. Anticipating the Paris summit, World Trade Organization (WTO) director-general Roberto Azevêdo wrote, “The challenge is not to stop trading but to ensure that trade is an ally in the fight against climate change.” However, in February 2016, the WTO ruled against India’s Jawaharlal Nehru National Solar Mission. In a case initiated by the US in 2013, the WTO found that India’s solar initiative, which required that 10 percent of solar cells be produced locally, violated international trade laws. As Dipti Bhatnagar and Sam Cossar-Gilbert of Friends of the Earth International reported in the Ecologist, “The WTO ruling sets a dangerous precedent for countries wanting to support homegrown renewable energy initiatives.”

Prime Minister Manmohan Singh launched India’s National Solar Mission in 2010. Ben Beachy and Ilana Solomon described how the National Solar Mission aimed to develop long-term policy, research and development, and domestic production to reduce the cost of solar power generation in India and, ultimately, to increase India’s solar capacity to 100,000 megawatts by 2022—a target that would surpass the combined current solar capacity of the world’s top five solar-producing countries. By the time of the WTO ruling, the National Solar Mission had already increased India’s solar capacity from “nearly nothing” to 5,000 megawatts, Beachy and Solomon reported.

However, US Trade Representative Michael Froman claimed that India’s subsidized solar program discriminated against American suppliers, arguing that India’s solar plan created unfair barriers to imports of US-made solar panels. Even though India had argued that the program helped it to meet its commitments under the United Nations Framework Convention on Climate Change, the WTO ruling stated that domestic policies in conflict with its rules could not be justified on the basis that they fulfill international climate commitments. As Beachy and Solomon summarized, “antiquated trade rules trump climate imperatives.”

On the WTO ruling against India, Froman described the decision as “important” for the message it sent “to other countries considering discriminatory ‘localization’ policies.” But, Beachy and Solomon noted, the US position was “perverse” because “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 into the economy.”

This was not the first time the US appealed to the WTO to challenge another nation’s domestic climate initiatives. A similar program in Canada, Ontario’s Green Energy Act, sought to boost renewable technologies and create clean-energy jobs. Spurred by the US, in 2012 the WTO ruled against the program, which had to be modified to comply with WTO rules.

In February 2016, Forbes ran an opinion piece clearly in favor of the WTO ruling (and free trade in general), while a September 2015 article in the Wall Street Journal provided coverage of India’s position, but noting opportunities for foreign companies if the WTO ruled against India’s requirement that some solar panels should be produced domestically. A Reuters report on the WTO ruling emphasized the US perspective and provided little detail about India’s solar program—accounted for by the claim that “Indian officials were not immediately available to comment,” despite basic information about its solar program having been previously available in a variety of public forums.

Ben Beachy and Ilana Solomon, “The WTO Just Ruled against India’s Booming Solar Program,” Sierra Club, February 24, 2016, http://www.sierraclub.org/compass/2016/02/wto-just-ruled-against-india-s-booming-solar-program.

Dipti Bhatnagar and Sam Cossar-Gilbert, “World Trade Organisation Smashes India’s Solar Panels Industry,” Ecologist, February 28, 2016, http://www.theecologist.org/News/news_analysis/2987286/world_trade_organisation_smashes_indias_solar_panels_industry.html.

Charles Pierson, “How the US and the WTO Crushed India’s Subsidies for Solar Energy,” CounterPunch, August 28, 2015, http://www.counterpunch.org/2015/08/28/how-the-us-and-the-wto-crushed-indias-subsidies-for-solar-energy/.

Student Researcher: Jillian Solomon (San Francisco State University)

Faculty Evaluator: Kenn Burrows (San Francisco State University)