International Systemic Barriers to Green Development - Green Industrial Policy and Non-tariff Barrier
Embargo until
2022-05-01
Date
2018-04-27
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Johns Hopkins University
Abstract
As pollution and intense competition for resources increase, multifaceted challenges have arisen at the intersection of national industrial policies, international trade systems, and international environmental regimes. Countries that emphasize environmentally sustainable development are more likely to adopt policies that promote the growth of green industries. However, these policies that are intended to reduce carbon intensity or promote energy security can also be used for protectionist purposes, so when countries adopt policy tools that favor specific industries, they are more likely to be targets of non-tariff barriers (NTBs) on the grounds of the World Trade Organization (WTO)-inconsistent trade protectionism.
The findings of this dissertation ultimately support innovation offset theory and causes the ecological dumping theory to be rejected. This dissertation argues that over the last 20 years, the more that countries have put effort and resources into promoting green industries, the more often they have faced import protection through NTBs in energy and environment-related industries. Previous studies have discussed environmental issues as a new source of conflict in international trade. However, research on the structural obstacles to environmentally sustainable development that countries face is still incipient and has not been substantially empirical. This dissertation overcomes the limitations of the existing literature by conducting both empirical study and a case study of the U.S. - China trade disputes based on in-depth interviews.
The findings of this dissertation support my argument that, when countries pursue greener growth, they are more likely to be targets of NTBs in related industries. Empirical studies showed that the increases of renewable energy share in electricity generation and the number of environmental patents filed are significantly associated with the increase of NTB investigations conducted against those countries. This dissertation extends this analysis to twenty developing countries and eight developed countries separately and finds that, differently from developing countries, the increase of environmental patents of developed countries are weakly associated with NTB investigations conducted against them. The findings of the case study on the U.S.- China trade disputes regarding solar and wind energies are in line with the statistical findings, giving underlying causal mechanisms which are not provided through statistical analysis. These results have significant implications for international trade regimes and environmental agreements and provide a framework for dealing with clean energy and environmental products trade disputes under the WTO rules.
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Keywords
renewable energy, industrial policy, non-tariff barrier, environmentally sustainable development, international trade