Energy Systems and Technologies for the Coming Century ...

Source: adapted from REN21, 2010It needs to be pointed out that subsidies for renewable energy often lead to higherelectricity costs bear by the consumers or tax payers. For example, it is expected thatthe 7 billion Canadian dollar contract offered by the Ontario provincial government toSamsung, which is identified some expert as the direct cause of Japan’s complaint tothe WTO. Samsung will receive 437 million in incentives payments over the 25-yearduration of the contract if it realises the obligations of creating 16,000 jobs. Thisincentive will lead to a 1.60 Canadian dollar per year increase in consumers'electricity bills (United Press International, 22 Jan 2010).Therefore, when persuading public support for subsidy to renewable energy,politicians often point out the benefits of new job creation through local manufacturing,the building up of future competitiveness in renewable technologies, as well asimproved energy security, reduced air pollution, as well as greenhouse gases.The first two benefits are especially emphasized in the aftermath of the recenteconomic crisis, when countries face the difficult task of having to reducinggovernment spending, while the unemployment remains high. The contributes ofrenewable energy use to global warming, is more considered as co 12For example, the US Congress has been blocking the legislation about accepting anybinding commitment for the US. But President Obama signed the American Recoveryand Reinvestment Act, which includes more than $80 billion in clean energy,including the generation of renewable energy sources, expanding manufacturingcapacity for clean energy technology, advancing vehicle and fuel technologies, andbuilding a bigger, better, smarter electricity grids and the strong justification is that allthese efforts can new, sustainable jobs. 13 During his speech at ZBB EnergyCorporation, he clearly announced his commitment to create 800,000 clean energyjobs by 2012 that will not only “create work in the short-term, but lay the foundationfor lasting economic growth.”To secure that the subsidies for renewable energy development leads to local jobcreation and the building up of local competitiveness in renewable energytechnologies, countries try to limit the subsidy recipients to local companies, insteadof foreign producers. In addition to creating jobs, building up local manufacturing andtechnology capacity could also serve the purpose of import substitution in the shortterm, and in some cases, this may reduce the overall costs of relevant renewableenergy equipment and services, hence reducing the amount of public subsidyneeded. In the long term, countries may hope their suppliers of equipment,renewable-energy related technologi and service could build up internationalcompetitiveness and become exporters of such equipment, technologies, andservices. This is also known as the needs for protecting ‘infant industry’, which worksin some cases, while fails in other cases. The next section will examine the relevantWTO rules for the various policies and measures used by countries in support ofrenewable energy development. As indicated in the two WTO trade dispute cases onrenewable energy explained in the previous part of this article, local contentrequirements in the subsidy schemes are the key reason of the complaints by othermember countries.12 http://www.whitehouse.gov/issues/energy-and-environment13 The White House Blog, New Battery Technology and New Jobs in Wisconsin, Posted by KatelynSabochik on August 16, 2010 at 05:27 PM EDTRisø International Energy Conference 2011 Proceedings Page 101