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Trends, Challenges and Opportunities panels and biofuels. Concerning export restrictions, the WTO case on rare earths provides an example of how some countries are using export restrictions for public policy reasons, as illustrated in Box 4. Box 4. WTO consultations on rare earth exports The shift to an increasing share of renewable energy supply products will have a significant impact on trade in rare earths minerals or metals. Rare earths are important inputs for the manufacture of several renewable energy supply products such as wind turbines and energy efficient lighting. Global demands for rare earth elements have been increasing, with demand (134,000 tonnes per year) largely exceeding global production (124,000 tonnes per year). Global demand is projected to exceed 200,000 tonnes per year by 2014 (UNEP 2012a). This has given rise to international consultations. On 23 July 2012, at the request of the United States, the European Union (EU) and Japan, the Dispute Settlement Body of the WTO established a Panel to consider China’s export restrictions on rare earths as well as tungsten and molybdenum. Complainants argue that China has placed export restrictions, through e.g. licences and minimum export price requirements, on the products at issue in breach of certain WTO provisions as well as China’s WTO Accession Protocol (WTO website). In response, in its White Paper Situation and Policies of China’s Rare Earth Industry, China claims that its policies concerning the products at issue are aimed at protecting natural resources and achieving sustainable economic development, and that an annual export quota is needed (MIIT 2012). This case disputes the right of WTO members to limit exports of natural resources for various policy objectives, including environmental protection. This right is safeguarded by WTO rules, but the accession protocols of some members may include so-called “WTO plus” requirements limiting the policy space of such members. As a result, WTO members enjoy different degrees of freedom for regulating exports of natural resources and the relevant rules, including those contained in accession protocols, may need significant improvement (Quin 2012). As well as the WTO, the Energy Charter Treaty (ECT) plays a role in energy trade governance. In fact, the ECT is the only international treaty setting legal norms specific to energy trade and investment. Comprising over 50 member states, it includes in its membership countries across Eurasia from the EU to former Soviet Union republics to Japan. The ECT incorporates the major rules of the WTO with respect to trade in goods in the energy sector. Moreover, the ECT’s trade regime applies WTO rules by reference to trade between its members that have not yet acceded to the WTO. The ECT also deals specifically with issues of transit of energy materials and products via fixed infrastructure (ECT 2001). Trade also has a key role to play in technology transfer of environmentally sound technologies, as is discussed in section 6.3.5. 6.3 Green economy measures There are a variety of green economy measures that can lead to enhanced trade in renewable energy or its equipment. Potential measures include fiscal reform of the energy sector, including phasing out subsidies for fossil fuels and providing fiscal incentives for renewable energy, investments in renewable energy and infrastructure, regulations on renewable energy, and the transfer of technology. The following subsections illustrate examples of green economy measures that present the potential to create or consolidate sustainable trade opportunities in the renewable energy sector. 225 Renewable EnergyPDF Image | Renewable Energy
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