Falijee wrote:WTO Ruling Against India's Solar Push Threatens Climate, Clean Energy
The World Trade Organization (WTO) on Wednesday ruled against India over its national solar energy program in a case brought by the U.S. government, sparking outrage from labor and environmental advocates.
As power demands grow in India, the country's government put forth a plan to create 100,000 megawatts of energy from solar cells and modules, and included incentives to domestic manufacturers to use locally-developed equipment.
According to Indian news outlets, the WTO ruled that India had discriminated against American manufacturers by providing such incentives, which violates global trade rules, and struck down those policies—siding with the U.S. government in a case that the Sierra Club said demonstrates the environmentally and economically destructive power of pro-corporate deals like the Trans-Pacific Partnership (TPP).
The Indian government will appeal the decision to the WTO's highest court, the appellate body. It is the second time that the WTO has ruled against India in a case with the U.S., which first brought legal action against the country's food security program in 2014.
The WTO ruled on that case in June, when it decided that the Indian ban on certain foods from the U.S. was "inconsistent with the global norms."
Posting some more snippet from this article (TFS Falijee-ji)
The subsidies which provoked the ire of the United States are in the form of Domestic Content Requirements (DCRs). These mandate that a set proportion of specified materials used in the NSM must be manufactured in India. In Phase I of the NSM, the DCRs only covered solar cells and solar modules. From the US standpoint, that was bearable: US companies export few solar cells and solar modules to India. What worried the US was that India might extend the DCRs to include solar thin film technologies. US exports of thin film technologies have dominated the Indian market. US fears were realized in October 2013 when Phase II of NSM extended the DCRs to include thin film technologies.
Oddly, the trade dispute has taken place at a time when the two countries, at least on the surface, appear to be on good terms. Even stranger, the US is providing its own subsidies to assist India’s solar sector. The US has pledged to provide India with $4 billion to foster the growth of Indian solar power. On November 18, 2014, the two nations signed a Memorandum of Understanding (MoU) under which the US Export-Import Bank agreed to broker up to one billion dollars in low-interest loans for development of renewable energy sources in India. The MoU was signed two months after the WTO, acting at the behest of the US, established a dispute settlement panel to hear the US challenge to India’s subsidies for solar power.
The Ex-Im Bank is currently in limbo, but that does not affect $2 billion in loans for Indian solar energy from the US Trade and Development Agency or a $1 billion loan from the federal Overseas Private Investment Corporation. Now that the WTO has struck down India’s DCRs, all that money can go to purchasing solar equipment from US corporations. So US subsidies to India serve double duty as subsidies to US corporations.
The US attack on India’s energy subsidies represents breathtaking hypocrisy. The US itself provides subsidizes for renewables. Over the past five years, federal subsidies for renewable energy have averaged $39 billion a year. The IRS provides a 30% investment tax credit for solar power. LCRs are part of many state and federal projects in the United States. India has called attention to LCRs attached to renewable energy programs in Michigan, Texas, and California. Apart from renewables, water utilities in West Virginia, Pennsylvania, South Carolina, and parts of New England include LCRs.
India could bring a legal challenge against these subsidies. India has taken what often is the first step leading up to a WTO complaint. India has served questions on the US through the WTO asking the US to explain how its subsidies are consistent with WTO rules. But India has not gone on to file a complaint against subsidies for renewables in the US. Nor has India filed an anti-dumping complaint against the US for selling solar materials in India below cost.
And while the US sends up howls of protest that India’s DCRs constitute protectionism, the US protects its own solar sector. The US imposed tariffs against Chinese solar. China successfully challenged the US tariffs in the WTO.
Why hasn’t India dragged the US before the WTO? The answer, unsurprisingly, is money. Modi’s goal of expanding India’s reliance on renewables is achievable, but it won’t come cheap. It will take at least $100 billion in new investment. More than half of that $100 billion is going to have to come from overseas, specifically the United States. India won’t see a dime of that if it takes the US to the WTO.
So Modi had no choice but to grin for the cameras with his pal Obama at the January summit. India has been able to resist US urging that it set targets for emissions cuts, but other than that the US has gotten everything from India that it wants.
I think India should sue the US without worrying about foreign investment in solar. While it is important to develop alternative energy sources, it should be done by our industry, however painful it may be. We can generate funds internally once the economy takes off on the back of existing power sources. See what China had done.
As for existing sources (fossil):
If anything, US subsidies for renewables are too stingy. Not so, US subsidies for fossil fuels. US subsidies for fossil fuels top $15 billion per year. The International Monetary Fund projects fossil fuel subsidies of $333 billion worldwide in 2015. It makes sense when you think about it. Some organizations would not survive without subsidies, like your local ballet company or ExxonMobil or BP.
The developed countries know this. And they are concerned about how fossil fuel subsidies contribute to climate change. At its 2009 summit in Pittsburgh, the G20 counties committed to phasing out fossil fuel subsidies. Since then, fossil fuel subsidies have only increased. Looking solely at the United States, since Obama took office in 2009 federal subsidies for fossil fuel production and exploration have climbed 45%. Federal subsidies for fossil fuel production and exploration are only a portion of all US subsidies for fossil fuels.