Corporate trade policies could threaten the green energy transition.

THE ANSWER IS A CLIMATE PEACE CLAUSE.

WHAT IS A CLIMATE PEACE CLAUSE?

Legal challenges through the World Trade Organization and other trade and investment agreements have already forced countries to roll back policies designed to help build green energy systems and weakened critical environmental protections.

These WTO rules threatened renewable energy & green jobs programs across the U.S. and throughout the world. Today, threats of a trade challenge are eroding key elements of the hard-fought Inflation Reduction Act.

When such challenges prove successful – like those that gutted solar and wind energy programs in China, Canada, and India before them – they strike a major blow to the future of green energy – and life on Earth.

That's why we are calling on the United States and governments worldwide to make a binding commitment to not use trade and investment rules to attack each other’s climate policies.​

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OPEN-LETTER:

WORLD LEADERS: NATIONS MUST SIGN A CLIMATE PEACE CLAUSE BEFORE IT'S TOO LATE!

Humanity has less than a decade to make substantial progress towards eliminating greenhouse gas emissions.

Doing so requires substantial legislation that mandates and finances a green transition – but international trade rules pose a serious threat to making such necessary steps a reality.

Legal challenges through the World Trade Organizations and other trade and investment agreements have prevented countries from building green energy systems and weakened critical environmental protections.

This must end now. We call upon countries worldwide to make a binding commitment to not use trade and investment rules to attack each other’s climate policies.

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WORLD LEADERS:
SIGN A CLIMATE PEACE CLAUSE BEFORE IT'S TOO LATE!

Humanity has less than a decade to make substantial progress towards eliminating greenhouse gas emissions.

Doing so requires substantial legislation that mandates and finances a green transition – but international trade rules pose a serious threat to making such necessary steps a reality.

Legal challenges through the World Trade Organizations and other trade and investment agreements have prevented countries from building green energy systems and weakened critical environmental protections.

This must end now. 

We call upon countries worldwide to make a binding commitment to not use trade and investment rules to attack each other’s climate policies.
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    2022

    EU, South Korea threaten U.S. EV Tax Credits

    The European Union and South Korea are threatening to launch a WTO case that could gut the Inflation Reduction Act of its Made in North America electric vehicle subsidies – a cornerstone of what allowed the legislation to pass the Senate.

    The Inflation Reduction Act, which brings climate and green jobs demands together, is the U.S.’s single largest investment ever in climate action.

    The EU, South Korea, Japan and China have all threatened to launch WTO cases citing the law’s Local Content Requirements (LCRs) tied to consumer tax credits for the purchase of electric vehicles, as well as similar requirements for other green energy products.

    The program will make electric vehicles more affordable in the U.S. while also kickstarting a domestic green energy industry.

    Such subsidies for green jobs in North America are one of the reasons the law made it through the Senate The EU, a supposed climate champion, threatened a WTO case before the IRA bill had even passed, potentially giving reluctant members of Congress an excuse to vote “no” and costing us the razor-thin majority that eventually passed the IRA.

    The case could be a defining moment in the push for the kinds of green industrial policies the world needs to combat climate change.

    2022

    European Union VS. The United Kingdom

    The European Union launched a WTO case challenging UK policies designed to assist businesses in transitioning to low-carbon energy production.

    The United Kingdom has increased their zero-carbon energy production from less than 20% in 2010 to nearly 50% in 2021, in part through legislation that incentivizes and lowers the cost of low carbon energy generation projects such as offshore wind production.

    The UK promotes low carbon energy generation projects via Contracts for Difference, CfDs, which are aimed to incentivize investment in renewable energy by providing developers of projects with high upfront costs and long lifetimes with direct protection from volatile wholesale prices, thus protecting consumers from paying increased support costs if electricity prices are higher.

    The EU claims that, by incentivizing commitments to implement percentages of UK content within the allocation of CfD, they accord less favorable treatment to imported goods than to like domestic goods.

    This gets to a core issue with our outdated trade rules: that governments cannot discriminate against “like” goods. So energy made from solar panels or wind turbines domestically cannot be promoted at the expense of energy from dirty sources in trade partner countries.

    2019

    India VS. The United States

    Programs offering tax incentives for locally produced solar technology in eight U.S. states found in violation of WTO rules after challenge by India.

    States across the U.S. have implemented or are in the process of implementing programs that make the purchase, installation, and use of renewable energy systems and products accessible and affordable to people and businesses.

    In retaliation for the U.S. attacking its solar program, India launched its own WTO case against the U.S., citing eight states with local content requirements for solar energy tax incentives.

    A WTO tribunal ruled that the incentives for local production of these renewable energy systems are a violation of trade obligations.

    Update: In June 2023, the U.S. and India agreed to withdraw their cases challenging green energy programs in both countries. This is a significant step toward ensuring climate policies are no longer stifled by outdated trade rules.

    Had this case gone forward, it could have required roll-backs of important policies, stunting state and country efforts to combat climate change and make the use of renewable energy a reality for the average person.

    2016

    The United States VS. India

    After a U.S.-led challenge at the WTO, India canceled a major subsidy program designed to make solar energy more affordable for its population.

    In order to capitalize on the massive potential for solar energy, India put several projects motion that relied on domestically produced solar cells and modules in order to lower costs and promote India’s domestic solar industry. 

    The U.S. challenged these subsidies at the WTO, claiming American solar products were unfairly discriminated against in Indian markets. 

    Despite U.S.-made solar products being largely unaffordable in countries like India, the WTO ruled against the subsidy program, and India canceled it, destroying a promising step forward for Indian solar energy production.

    Update: In June 2023, the U.S. and India agreed to withdraw their cases challenging green energy programs in both countries. This is a significant step toward ensuring climate policies are no longer stifled by outdated trade rules.

     

    2013

    European Union & Japan VS. Canada

    Canadian policies that lowered the cost of green energy production for small-scale producers dismantled after the EU sued at the WTO.

    Over a ten year period, Canada implemented several bold programs designed to jump-start renewable energy usage by easing costs of generating green energy for small-scale producers. 

    These programs were then shut down after the EU complained at the WTO, saying they negatively impacted the exporting of European goods. 

    The case helped sink Ontario’s entire Green Energy Act, halting promising efforts to normalize green energy production at the household scale and setting a negative precedent regarding small-scale renewable energy usage.