The present paper seeks to examine the ways in which current trade policies and frameworks enable or hold back the pressing need for further development of clean energy. Based on this analysis, it identifies a set of policy options for the global trade system to support the scale-up of CETs. A first set of options is related to addressing systemic issues with a view to enhancing trade governance for renewable energy and climate policies in the context of the WTO framework. These proposals include: 1- an amendment of GATT rules; 2- temporary waivers; 3- an interpretive understanding to clarify existing obligations; 4- a plurilateral agreement; 5- a moratorium on dispute settlement in the area of clean energy.
A second set of options addresses reform of existing rules and the formulation of new rules aimed at strengthening markets for CETs as well as responding to the need for any additional policy space that may be required to pursue mitigation and other sustainable development goals through the scale-up of clean energies. The options on strengthening markets consider: 1- scenarios for tariff liberalisation in CETs; 2- removing barriers to clean energy services; 3- addressing regulatory issues such as non-tariff barriers and clean energy access to networks. Whereas the options on policy space focus on three areas that could benefit from greater clarity, predictability, and flexibility: 1- subsidies; 2- local content requirements; 3- trade remedies.
Many of the options explored in the paper are motivated by the wish to refrain from unnecessarily relying on the WTO’s dispute settlement mechanism to define the limits on how climate action is allowed to interfere with trade. These options range from ambitious proposals for comprehensive reform of the trade system to more gradualist, short-term approaches to support the deployment of clean energy globally.