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).
"Today, we have more evidence of how free trade rules threaten the clean energy economy and undermine action to tackle the climate crisis," Ilana Solomon, director of the Sierra Club's Responsible Trade Program, said on Thursday. "The U.S. should be applauding India’s efforts to scale up solar energy—not turning to the WTO to strike the program down."
According to Indian media outlet Livemint, the U.S. government
has resorted to similar measures, specifying local content requirements and offering a range of subsidies for promoting its renewable energy sector at the federal, state, regional and local levels.
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India spoke repeatedly against the US at WTO’s committee on subsidies and countervailing measures, stating that American subsidy schemes relating to local or domestic content requirements for its solar companies are inconsistent with its global trade obligations.
In addition, Livemint reports, the ruling "goes against the spirit of an agreement signed early this year.... [in which] the two sides agreed to promote clean energy and expand solar energy initiatives."
Regardless, Solomon said, the WTO "needs to get out of the business of hampering climate action in countries around the globe. The outdated trade rules on the books now and under negotiation in trade pacts including the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership encourage trade in fossil fuels and discourage countries from developing local clean energy capacity."
"These rules simply do not reflect the urgency of solving the climate crisis and stand in the way of clean energy growth," Solomon said.
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."