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Japan throws a FIT

September 23, 2010

Via Columbia’s Climate Law Blog.

 Just when you thought things couldn’t get much less internationally cooperative on the climate front, this happens:

In what may be an ominous shot across the bow for green jobs advocates, Japan on September 13 submitted a complaint to the World Trade Organization alleging that a Canadian renewable energy law violates WTO non-discrimination rules. [1] At issue are a set of domestic content requirements built into Ontario’s landmark green energy law, [2] which are designed to guarantee that local producers – and local jobs –supply a minimum percentage of the technology used to meet the province’s ambitious goals for renewable energy generation. [3] While Japan’s “Request for Consultation” with Canada does not formally initiate a case before the WTO’s Dispute Settlement Body (DSB), it nevertheless sets the stage for a high-stakes showdown between the two countries, with potentially global repercussions for energy and industrial policy linking renewable power to high tech employment opportunities.

On the one hand, Ontario hopes to spur investment in homegrown clean energy jobs by guaranteeing favorable feed-in tariff (FIT) rates for power generators who purchase solar panels and other equipment produced locally. [4] On the other hand, Japan – already home to many of the world’s leading solar PV producers – seeks to maintain its sizable lead in renewables manufacturing.

The resolution of this dispute may have far reaching consequences for countries like the U.S., where policymakers have explicitly linked controversial clean energy mandates with more popular green jobs programs.  If the solar panels and wind turbines used to green the American grid must come from Japan and Denmark (where industries are well-developed) rather than Michigan and Ohio (where they may need government support to get off the ground), then what is already a delicate balancing act between climate action and job creation may prove even harder to pull off.

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