Keywords
How to Cite
Abstract
Green subsidies have become an important instrument of contemporary climate, energy and industrial policy, yet the Agreement on Subsidies and Countervailing Measures (SCM Agreement) does not contain a comprehensive legal category for such measures. This article develops the concept of dual regulatory asymmetry to assess how WTO subsidy disciplines treat environmentally beneficial and harmful state support. On the one hand, legitimate green subsidies pursuing environmental objectives may remain exposed to challenge under existing rules. On the other hand, many environmentally harmful subsidies, particularly fossil fuel support measures, remain difficult to discipline through the SCM Agreement’s requirements of financial contribution, benefit and specificity. The article analyses this problem through the legal structure of the SCM Agreement, the expired non-actionable subsidy category under Article 8, WTO renewable energy disputes, the fossil fuel disciplinary gap, and partial models found in the Agreement on Agriculture and the Agreement on Fisheries Subsidies. The analysis shows that this asymmetry does not result merely from isolated gaps in the rules, but reflects a deeper structural feature of the SCM Agreement: its environmentally neutral design. The article argues for a more coherent approach to WTO subsidy disciplines, one that creates disciplined legal space for genuine green subsidies, preserves core disciplines against protectionist subsidy design, and improves the transparency and treatment of environmentally harmful fossil fuel support.
References
Marrakesh Agreement Establishing the World Trade Organization (adopted 15 April 1994, entered into force 1 January 1995) 1867 UNTS 154, preamble; Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products WT/DS58/AB/R, adopted 6 November 1998, para 129. URL: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds58_e.htm (accessed: 12.04.2026).
Agreement on Subsidies and Countervailing Measures, Annex 1A to the Marrakesh Agreement Establishing the World Trade Organization (adopted 15 April 1994, entered into force 1 January 1995) 1869 UNTS 14 (SCM Agreement). URL: https://www.wto.org/english/res_e/booksp_e/analytic_index_e/subsidies_01_e.htm (accessed: 9.03.2026).
SCM Agreement, arts 1, 2, 5–7; Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft WT/DS70/AB/R, adopted 20 August 1999, para 157. URL: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds70_e.htm (accessed: 02.04.2026).
General Agreement on Trade in Services, Annex 1B to the Marrakesh Agreement (adopted 15 April 1994, entered into force 1 January 1995) 1869 UNTS 183, art XV. URL: https://www.wto.org/english/docs_e/legal_e/26-gats.pdf (accessed: 05.04.2026).
General Agreement on Tariffs and Trade 1994, Annex 1A to the Marrakesh Agreement (adopted 15 April 1994, entered into force 1 January 1995) 1867 UNTS 187 (GATT 1994). URL: https://www.wto.org/english/docs_e/legal_e/06-gatt.pdf (accessed: 02.03.2026).
Agreement on Agriculture, Annex 1A to the Marrakesh Agreement (adopted 15 April 1994, entered into force 1 January 1995) 1867 UNTS 410. URL: https://www.wto.org/english/docs_e/legal_e/14-ag.pdf (accessed: 03.03.2026).
Agreement on Fisheries Subsidies, WTO Ministerial Conference, Twelfth Session, WT/MIN(22)/33 and WT/L/1144 (adopted 17 June 2022, entered into force 15 September 2025). URL: https://www.wto.org/english/tratop_e/rulesneg_e/fish_e/fish_e.htm (accessed: 10.04.2026).
Matsushita M, Schoenbaum TJ and Mavroidis PC. The World Trade Organization: Law, Practice, and Policy. 3rd edn. OUP, 2015, p. 435; Hoekman B, Nelson D. Rethinking International Subsidies Disciplines // Journal of World Trade. 2020. Vol. 54. Pp. 681, 687–691. URL: https://www.researchgate.net/publication/344166564_Rethinking_international_subsidy_rules (accessed: 11.03.2026).
SCM Agreement, arts 3 and 5–7; Rubini L. Ain’t Wastin’ Time No More: Subsidies for Renewable Energy, the SCM Agreement, Policy Space, and Reform // Journal of International Economic Law. 2012. Vol. 15. Pp. 525, 554–555; Bigdeli SZ. Resurrecting the Dead? The Expired Non-Actionable Subsidies and the Lingering Question of "Green Space" // Manchester Journal of International Economic Law. 2011. Vol. 8. P. 2. URL: https://www.wti.org/media/filer_public/95/fe/95fe7812-471d-46ca-b1b2-523b3dbae005/2011-32_lr.pdf (accessed: 08.04.2026).
Black S, Liu AA and Parry IWH. IMF Fossil Fuel Subsidies Data: 2023 Update. IMF Working Paper WP/23/169, August 2023. Pp. 4–6. URL: https://www.imf.org/-/media/files/publications/wp/2023/english/wpiea2023169-print-pdf.pdf (accessed: 11.04.2026).
SCM Agreement, arts 1.1 and 2.1; Hoekman B., Nelson D. Rethinking International Subsidies Disciplines // Journal of World Trade. 2020. Vol. 54. Pp. 687–691. URL: https://www.researchgate.net/publication/344166564_Rethinking_international_subsidy_rules (accessed: 15.05.2026).
WTO. Doha Ministerial Declaration WTO Doc WT/MIN(01)/DEC/1 (20 November 2001), para 6. URL: https://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_e.htm (accessed: 15.05.2026).
GATT 1994, art XX(b), (g); Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, paras 141–142.
Appellate Body Report, India – Certain Measures Relating to Solar Cells and Solar Modules WT/DS456/AB/R, adopted 14 October 2016, para 5.35; Rubini L. Ain’t Wastin’ Time No More: Subsidies for Renewable Energy, the SCM Agreement, Policy Space, and Reform. URL: https://www.researchgate.net/publication/275282848_Ain%27t_Wastin%27_Time_No_More_Subsidies_for_Renewable_Energy_The_SCM_Agreement_Policy_Space_and_Law_Reform // Journal of International Economic Law. 2012. Vol. 15. Pp. 557–560; Matsushita M., Schoenbaum T.J., Mavroidis P.C. The World Trade Organization: Law, Practice, and Policy. 3rd edn. OUP, 2015. P. 435. URL: https://www.researchgate.net/publication/227468164_The_World_Trade_Organization_Law_Practice_and_Policy (accessed: 15.03.2026).
SCM Agreement, arts 1–3 and 5–7; Bigdeli S.Z. Resurrecting the Dead? The Expired Non-Actionable Subsidies and the Lingering Question of “Green Space” // Manchester Journal of International Economic Law. 2011. Vol. 8. P. 2. URL: https://www.researchgate.net/publication/308902477_Subsidies_Issues_in_Renewable_Energy_Trade (accessed: 15.03.2026).
Agreement on Agriculture, Annex 2, paras 2(a) and 12; Agreement on Fisheries Subsidies, arts 3–5.
SCM Agreement, art 1.1(a)(1); Charnovitz S. The WTO’s Environmental Progress // Journal of International Economic Law. 2007. Vol. 10. Pp. 685, 698.
Appellate Body Report, Canada – Measures Affecting the Export of Civilian Aircraft, para 157; SCM Agreement, art 14.
SCM Agreement, art 2.1.
Rubini L. Ain’t Wastin’ Time No More: Subsidies for Renewable Energy, the SCM Agreement, Policy Space, and Reform // Journal of International Economic Law. 2012. Vol. 15. Pp. 529–536. URL: https://www.researchgate.net/publication/275282848_Ain%27t_Wastin%27_Time_No_More_Subsidies_for_Renewable_Energy_The_SCM_Agreement_Policy_Space_and_Law_Reform; Matsushita M., Schoenbaum T.J., Mavroidis P.C. The World Trade Organization: Law, Practice, and Policy. 3rd edn. OUP, 2015. P. 435. https://www.researchgate.net/publication/227468164_The_World_Trade_Organization_Law_Practice_and_Policy (accessed: 15.03.2026).
SCM Agreement, art 3.1(a)–(b); Appellate Body Report, Brazil – Export Financing Programme for Aircraft WT/DS46/AB/R, adopted 20 August 1999, para 167.
SCM Agreement, arts 5–7; Appellate Body Report, United States – Subsidies on Upland Cotton WT/DS267/AB/R, adopted 21 March 2005, para 436.
Appellate Body Reports, Canada – Certain Measures Affecting the Renewable Energy Generation Sector / Canada – Measures Relating to the Feed-in Tariff Program WT/DS412/AB/R and WT/DS426/AB/R, adopted 24 May 2013 (Canada – Renewable Energy); India – Solar Cells AB Report, para 5.35.
SCM Agreement, arts 8–9. URL: https://www.wto.org/english/docs_e/legal_e/24-scm.pdf (accessed: 03.03.2026).
SCM Agreement, art 8.2(a)–(c); Horlick G, Clarke P. A Purposive Analysis of the WTO Subsidies Agreement // World Trade Review. 2005. Vol. 5. Pp. 415, 422.
SCM Agreement, art 8.2(c); Charnovitz S. The WTO’s Environmental Progress // Journal of International Economic Law. 2007. Vol. 10. P. 700. URL: https://ssrn.com/abstract=1152157 (accessed: 12.04.2026).
SCM Agreement, art 31; Panel Report, United States – Subsidies on Upland Cotton WT/DS267/R, adopted 21 March 2005, para 7.907 n 1086.
UN Environment Programme. Towards a Green Economy: Pathways to Sustainable Development and Poverty Eradication. UNEP, 2011. P. 614. URL: https://wedocs.unep.org/rest/api/core/bitstreams/b7d87581-4f53-4e85-83e3-4bb87f49f6ad/content (accessed: 12.04.2026); Hoekman B., Nelson D. Rethinking International Subsidies Disciplines // Journal of World Trade. 2020. Vol. 54. P. 698. URL: https://www.researchgate.net/publication/344166564_Rethinking_international_subsidy_rules (accessed: 11.03.2026).
Appellate Body Reports, Canada – Renewable Energy WT/DS412/AB/R and WT/DS426/AB/R, adopted 24 May 2013. URL: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds412_e.htm (accessed: 17.05.2026).
Panel Reports, Canada – Renewable Energy WT/DS412/R and WT/DS426/R, adopted 24 May 2013, paras 7.1–7.6; Charnovitz S, Fischer C. Canada – Certain Measures Affecting the Renewable Energy Generation Sector // World Trade Review. 2015. Vol. 14. P. 189. URL: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds412_e.htm (accessed: 11.04.2026).
Canada – Renewable Energy AB Reports, paras 5.175 and 5.188.
Canada – Renewable Energy AB Reports [29], para 5.188.
SCM Agreement, art 3.1(b); GATT 1994, art III:4; Agreement on Trade-Related Investment Measures, Annex 1A to the Marrakesh Agreement (adopted 15 April 1994, entered into force 1 January 1995) 1868 UNTS 186, art 2.1. URL: https://www.wto.org/english/docs_e/legal_e/18-trims.pdf (accessed: 18.05.2026).
Panel Report, India – Certain Measures Relating to Solar Cells and Solar Modules WT/DS456/R, adopted 14 October 2016. URL: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds456_e.htm (accessed: 19.05.2026).
India – Solar Cells AB Report, paras 5.1–5.2. https://files.pca-cpa.org/pcadocs/2024-45/3.%20The%20European%20Union's%20Written%20Submission%20-%20Legal%20Authorities/Exhibit%20CLA-0059.pdf
India – Solar Cells AB Report, para 5.35 https://www.rieti.go.jp/jp/publications/pdp/17p018.pdf
GATT 1994, art XX(b) and (g); United States – Shrimp AB Report [1], paras 141–142.
SCM Agreement, art 1.1(a)(1); Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China WT/DS379/AB/R, adopted 25 March 2011, paras 317–318. URL: https://www.wto.org/ENGLISH/tratop_e/dispu_e/cases_e/ds379_e.htm (accessed: 12.04.2026).
SCM Agreement, art 2.1; Rubini L. The Definition of Subsidy and State Aid: WTO and EC Law in Comparative Perspective. OUP, 2009. P. 276. URL: https://www.researchgate.net/publication/288157261_The_definition_of_subsidy_and_state_aid_WTO_and_EC_law_in_comparative_perspective (accessed: 12.04.2026).
Pauwelyn J. US Federal Climate Policy and Competitiveness Concerns: The Limits and Options of International Trade Law. Nicholas Institute Working Paper NI WP 07-02, 2007. P. 18. URL: https://nicholasinstitute.duke.edu/sites/default/files/publications/u.s.-federal-climate-policy-and-competitiveness-concerns-the-limits-and-options-of-international-trade-law-paper.pdf (accessed: 12.04.2026).
Agreement on Agriculture, Annex 2, paras 2(a) and 12. URL: https://www.wto.org/english/docs_e/legal_e/ag_e.htm (accessed: 20.03.2026).
Agreement on Fisheries Subsidies. WTO, "Members Submitting Acceptance of Agreement on Fisheries Subsidies." URL: https://www.wto.org/english/tratop_e/rulesneg_e/fish_e/fish_acceptances_e.htm (accessed: 12.04.2026).
Agreement on Fisheries Subsidies, arts 3 (IUU fishing), 4 (overfished stocks) and 5 (unregulated high seas).
Agreement on Fisheries Subsidies, arts 7–8 (differentiated treatment) and art 9 (technical assistance).
WTO Ministerial Conference. Trade and Environmental Sustainability Structured Discussions: Ministerial Statement WTO Doc WT/MIN(21)/6/Rev.2 (12 June 2022). URL: https://www.wto.org/english/tratop_e/tessd_e/tessd_overview_fra.pdf (accessed: 20.04.2026).
WTO. Statement by the TESSD Co-convenors, Addendum 5 WTO Doc WT/MIN(24)/11/Add.5 (19 February 2024), para 3.4. URL: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/WT/MIN24/11A5.pdf (accessed: 12.04.2026).
International Institute for Sustainable Development. Trade and Climate Change: WTO Law, Options and Opportunities. IISD, 2021. Pp. 28–34. URL: https://www.researchgate.net/publication/383606686_The_WTO_climate_change_and_sustainable_development (accessed: 12.04.2026); Cosbey A. Renewable Energy Subsidies and the WTO: The Wrong Law and the Wrong Venue. IISD, 2011. Pp. 6–8. URL: https://www.iisd.org/sites/default/files/gsi/sw44_jun_11.pdf (accessed: 12.04.2026).
Marrakesh Agreement Establishing the World Trade Organization (adopted 15 April 1994, entered into force 1 January 1995) 1867 UNTS 154, art X; Agreement on Subsidies and Countervailing Measures, Annex 1A to the Marrakesh Agreement Establishing the World Trade Organization (adopted 15 April 1994, entered into force 1 January 1995) 1869 UNTS 14 (SCM Agreement), art 31.
SCM Agreement, art 8.2(c) and art 31; Agreement on Agriculture, Annex 1A to the Marrakesh Agreement Establishing the World Trade Organization (adopted 15 April 1994, entered into force 1 January 1995) 1867 UNTS 410, Annex 2 paras 2(a) and 12; WTO, Trade and Environmental Sustainability Structured Discussions: Statement by the TESSD Co-convenors, Addendum 5 WTO Doc WT/MIN(24)/11/Add.5 (19 February 2024) para 3.4. URL: https://www.tralac.org/documents/resources/external-relations/wto/mc13/5275-trade-and-environmental-sustainability-structured-discussions-tessd-statement-by-the-tessd-co-convenors-addendum-5-19-february-2024/file.html
SCM Agreement, art 25; WTO, Questionnaire Format for Subsidy Notifications under Article 25 of the SCM Agreement and Article XVI of GATT 1994 WTO Doc G/SCM/6 (9 August 1995). URL: https://docs.wto.org/dol2fe/Pages/SS/directdoc.aspx?filename=q:/G/SCM/6R1.pdf&Open=True