Profit over the planet: WTO's lawsuit ruling could be a giant blow to the renewable energy movement

WTO tribunal ruled in a lawsuit initiated by the U.S. that India's national solar energy program violates trade law

Published February 24, 2016 10:30PM (EST)

  (Reuters/Rick Wilking)
(Reuters/Rick Wilking)

A new ruling by the World Trade Organization could be a big blow to the growing renewable energy movement around the world.

A WTO tribunal ruled Wednesday that India's national solar energy program violates trade law, in a lawsuit initiated by the U.S.

Almost half of states in the U.S. have programs that are similar to India's, which subsidize the renewable energy industry and create local, environmentally friendly jobs.

Environmental groups say the deal shows that the WTO and U.S. care more about free trade policies and profit than they do about moving toward renewable energy sources.

Bill Waren, senior trade analyst at Friends of the Earth, said the organization "is dismayed that climate policy is being made by an international trade tribunal."

"The government of India reasonably provided some preferences for local producers of solar energy in order to convert from a carbon economy to a green economy," Waren explained, calling the WTO decision "an outrage."

Environmental groups also warned that the WTO ruling could undermine the international agreement reached after two weeks of deliberation at the 2015 United Nations Climate Change Conference in Paris.

The Sierra Club called India's subsidy program "a common-sense solar energy initiative in India that is a core component of the country's contribution to the Paris agreement to tackle climate disruption."

"Trade law trumps the Paris climate accord," Friends of the Earth said.

India's program fueled a huge solar energy boom. Ben Beachy, senior policy advisor for the Sierra Club's Responsible Trade Program, explained that, in "just five years, thanks to India's National Solar Mission, India has gone from having virtually no solar capacity to boasting one of the world's fastest-growing solar industries."

The country's original goal was to create 100,000 megawatts of solar power capacity by 2022 — which, the Sierra Club notes, is "more than the current solar capacity of the world's top five solar producers combined."

Approximately 300 million Indians, or one-fourth of the country's enormous population, don't have access to electricity. India's solar energy program hoped to help millions of Indians gain more access to electricity, while limiting pollution and reliance on fossil fuels.

Washington, on the other hand, insists the ruling will do the opposite, and will actually accelerate the spread of solar energy and create clean-energy jobs, Reuters reported.

The Office of the U.S. Trade Representative disagrees with the country's leading environmental groups, arguing "the Obama Administration sees this as being beneficial to the fight against global warming."

"As President Obama has repeatedly made clear, the United States strongly supports the rapid deployment of solar energy around the world, as does India," Press Secretary Andrew Bates told Salon via email. "But these policies that discriminate against American solar exports have in fact had the opposite of their intended effect and undermined our shared efforts to promote clean energy. This is because the specific measures that the Obama administration challenged require the use of more expensive and less efficient equipment — thereby raising the cost of generating clean energy in India."

"So this is not just a trade enforcement win for American jobs, it's also a trade enforcement win for the environment and for the global effort to fight climate change," Bates added. "The United States has and will continue to collaborate with India in the renewable energy sector to help India both meet its growing energy demands and uphold its commitments to mitigate climate change."

President Obama has made similar claims about the international trade agreement the Trans-Pacific Partnership. His administration claims the deal will be good for the environment and American workers, whereas environmental and labor groups warn the TPP will be catastrophic for the planet and the local economy. Former President Bill Clinton made very similar promises about NAFTA, but the opposite of what he promised came true.

The U.S. sued India in the WTO tribunal because India's subsidized solar energy program required that particular parts be made in the country. Washington claims that, because of this program, its solar exports to India have fallen by 90 percent since 2011, when the program started. As the Sierra Club's Ben Beachy noted, however, India had almost no solar capacity at this time.

In September 2015, the WTO made a similar ruling in regard to India's solar program.

"The WTO ruling is a step in the wrong direction, away from the climate progress that the global community committed to achieve in December's Paris climate agreement," stressed Ilana Solomon, director of the Sierra Club's Responsible Trade Program, in a statement.

"The U.S. should drop this case to avoid undermining climate protections abroad and at home," she continued. Solomon warned this ruling could be a sign of what is to come with the TPP.

Fossil fuel company TransCanada is already suing the U.S. government, after the Obama administration rejected its proposed Keystone XL Pipeline on environmental grounds. Former NASA environmental scientist and now Columbia University professor James Hansen emphasized that, if the pipeline were built and the vast oil reserves in Alberta, Canada's tar sands were used, it would mean "game over for the climate," yet the corporation is demanding $15 billion in compensation from American taxpayers.

By Ben Norton

Ben Norton is a politics reporter and staff writer at AlterNet. You can find him on Twitter at @BenjaminNorton.

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Friends Of The Earth India Renewable Energy Solar Energy Transcanada Wto