Todd Tucker
Jun 28 · 4 min read

(Post adapted from Twitter thread.)

Thanks for the thoughtful and the flippant engagement. I welcome both! And thanks to you and @AntheaERoberts @LawProfPuig and @geoffreygertz for the invitation to develop these ideas earlier this year.

A few thoughts:

Simon Lester@snlester

I have two responses to @toddntucker’s critique of yesterday’s WTO panel report on US state renewable energy local content requirements:

1. A serious one: https://www.cato.org/blog/misunderstandings-wto-trade-environment …

2. A pretty flippant one: https://ielp.worldtradelaw.net/2019/06/todd-tucker-on-the-ds510-panel-ruling.html …

1

I see the climate change pathways as the following:
1. Do nothing and let the world burn.
2. A democratic decarbonization that entails political bargains of the type the US states are pursuing.
3. A libertarian decarbonization that requires considerable incumbent repression. Having the WTO rule against green energy policies — first in India, now in the US — in the name of privileging the lowest cost, most statically efficient producers…

That’s an example of 3. Because it will be so unpalatable, it probably gets us back to 1. Let me preempt an obvious criticism of my arguments. As @ErikVoeten points out, the lower panel decision is not the end of the road for this case. Trump could appeal. Given their less than enthusiastic defense of the blue states’ policies, who can say.

Erik Voeten@ErikVoeten

Important thread. US sued India (under Obama) in WTO for subsidizing solar, India sued back against US (blue) state renewable energy programs. Both India and US won (and lost). Climate/world lost both times. US could appeal. But will Trump do it? https://twitter.com/toddntucker/status/1144293184287248385 …

And as @JPTrachtman points out, the actual consequence of this going against the US may be relatively minor in practical terms. I do worry, however, that the decision (at least) gives one further rhetorical weapon against ambitious climate action.

Joel Trachtman@JPTrachtman

As @toddntucker said, this was a legal no-brainer. The argument you are making is a kind of “political necessity” argument: this (assumedly) otherwise efficient state measure could not be taken without discrimination in favor of locals. I am not sure how far that would go.

Here, if the harm to India is indeed negligible, the retaliation should also be negligible (except for note 10 SCM), and the US can just allow that retaliation to proceed: efficient breach.

In any case, an adverse WTO ruling is a statement about our values as a species.

I would privilege different values: sustainability, equity, and solidarity. (papers.ssrn.com/sol3/papers.cf…) As to your point about whether Buy Local policies lead us to “artisan, hand-crafted solar panels from the Eastern Shore of Maryland for a million dollars a pop.”

India and the US are both big enough to have perfectly efficient industrial policies.

Simon Lester@snlester

The fundamental question: Do you want artisan, hand-crafted solar panels from the Eastern Shore of Maryland for a million dollars a pop, or do you want highly efficient solar panels made by a Chinese factory in Iceland that is powered by geothermal energy?

As @jennifermharris and I argue @Politico and in a forthcoming report, every now developed country has had such policies — whether they called it that or not. (politico.com/magazine/story…) Would I prefer that industrial policy be enacted at the federal rather than the state level? Absolutely.

However, the modest incentives enacted by the 7 US states — coupled with the lack of evidence that India was actually hurt — suggest that efficiency wasn’t sacrificed here. And I could say exactly the same thing about India’s green Buy Local policies, which the Obama administration made the inexplicable decision to go after.

Yesterday’s decision was payback by India, and in a way, good for them. (renewablesnow.com/news/us-wins-w…) In your second post, you raise what I see as the crucial issue: the effective blockade of any action at the federal level due to the structure of US democracy. (ielp.worldtradelaw.net/2019/06/todd-t…)

The existence of the Senate is of course precisely why states took the action they took.

And it’s the biggest hurdle for a Green New Deal.

That’s why climate justice requires weakening the Senate. There are a number of ways to do this. (rooseveltinstitute.org/fixing-the-sen…) Climate justice also requires reclaiming the idea that government can be effective and serve the public interest.

@jmargetta and @hitchop have ideas: (greatdemocracyinitiative.org/document/unsta…)

Are these big asks?

You betcha. But so is decarbonization, as @JWMason1 @MarkVinPaul and Fremstad lay out here. (rooseveltinstitute.org/decarbonizing-…) The politics and the economics of decarbonization are not separate endeavors, and are not separable.

It’s politics all the way down. Which is why, to use a technical legal term, it’s “hella dumb” to leave pronouncements on the appropriate political economy balance to trade lawyers.

Which is what motivates my alternative proposal. Different actors, different values => better outcomes. (papers.ssrn.com/sol3/papers.cf…) And, as I said yesterday, I believe the panel👇 absolutely came to the right legal decision. It could have not gone another way, and indeed didn’t when Obama challenged India’s similar Buy Local policies.

Which is why the rules themselves must change.

Todd Tucker

Written by

I write about global economic governance: what it is, what it does, how it works or doesn’t. Fellow at the Roosevelt Institute.