US blocks India’s solar power plan

Sun-tracking discs at a vast solar thermal power plant in Rajasthan, India.
Image: Brahma Kumaris via Flickr

World trade regulations have been invoked by the US to challenge India’s ambitious programme to expand massively its renewable energy capacity and provide local jobs.

LONDON, 27 February, 2016 – India has been told that it cannot go ahead as planned with its ambitious plan for a huge expansion of its renewable energy sector, because it seeks to provide work for Indian people. The case against India was brought by the US.

The ruling, by the World Trade Organisation (WTO), says India’s National Solar Mission − which would create local jobs, while bringing electricity to millions of people − must be changed because it includes a domestic content clause requiring part of the solar cells to be produced nationally.

What a difference two months make. On 12 December last year, US President Barack Obama praised the Paris Agreement on tackling climate change, just hours after it was finally concluded. “We’ve shown what’s possible when the world stands as one,” he said, adding that the agreement “represents the best chance we have to save the one planet that we’ve got”.

Clear-cut victory

The WTO says that its dispute settlement panel “handed the US a clear-cut victory . . . when it found that local content requirements India imposed on private solar power producers in a massive solar project violated trade rules, although the two sides are still discussing a potential settlement to the dispute”.

One official of India’s Ministry of New and Renewable Energy told India Climate Dialogue that the ruling might make the country’s solar plan more expensive, and would definitely hit domestic manufacturing and, consequently, the possibility of creating jobs in the sector.

“The ink is barely dry on the UN Paris Agreement, but clearly
trade still trumps real action on climate change”

The government-funded programme aims to generate 100 gigawatts of solar energy annually by 2022. One gigawatt is enough, for example, to supply the needs of 750,000 typical US homes.

Sam Cossar-Gilbert, economic justice and resisting neoliberalism programme co-ordinator at Friends of the Earth International, says the ruling “shows how arcane trade rules can be used to undermine governments that support clean energy and local jobs. The ink is barely dry on the UN Paris Agreement, but clearly trade still trumps real action on climate change.

Stumbling blocks

“Trade agreements are often stumbling blocks for action on climate change. Current trade rules limit governments’ capacity to support local renewable energy, undermine clean technology transfer, and empower fossil fuel companies to attack climate protection in secret courts. Trade policies are preventing a sustainable future.

“In the last three months alone, Ecuador was ordered to pay $1billion for cancelling a petrol contract under a Bilateral Investment Treaty . . . Governments must be free to implement sound climate policy.

“This ruling shows the dangers posed by more wide-ranging trade agreements such as the Trans-Pacific Partnership (TPP), Trade in Services Agreement (TiSA) and Transatlantic Trade and Investment Partnership (TTIP), which will liberalise trade in dirty fossil fuels and restrict government options even further.” – Climate News Network

5 thoughts on “US blocks India’s solar power plan”

  1. Malcolm MacLeod, MD

    This just goes to show how evil, unfair, and grasping such “trade” contracts can be. The only people in
    favor of those are the plutocrats. The WTO is a bureaucraticly political organization, which in this instance,
    is abusing its purpose.

  2. Sunny Morgan

    Sometimes counties must take action that is in the best interests of its own people. This may mean that India may have to put national strategic interests over that of WTO objections. How it does that is uncertain but it can be done with boldness, it did so with the pharma sector when it went ahead with generics over patent protection.

  3. Ophelia L.MacDonald MD FRCP(c)

    Free trade is not free when it stops a country from employing its own people , protecting its environment and quality of life.
    And if D. Trump gets elected he plans to put up a wall and to bring home jobs to USA !!! Is free trade only so the more wealthy can take advantage of the poor ?

  4. Robert Dinse

    We’ve had our plans to do things blocked because of our own requirement for local sourcing. Personally I think that’s something that never should have been included in the treaty.

  5. chris

    Very simple solution to it. Offer local assembled and or manufactured equipment slightly better PPA rates and or foreign slightly lesser PPA’s. Same happens in other countries.
    Good luck to India!!

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