WTO Recommends Lower Tariffs on Wind, Solar, EVs

The World Trade Organization Secretariat, at the UN Summit on Climate Change, recommended that countries lower their import tariffs to increase the uptake of low-carbon technologies, reform environmentally harmful subsidies, facilitate trade to reduce greenhouse gas emissions for idling vehicles at the border, and improve coordination of carbon pricing "to reduce policy fragmentation and compliance costs."

Released at the summit, the report, Trade Policy Tools for Climate Action, acknowledged that trade remedies have been applied more and more often to imported solar panels, wind turbines and biodiesel, and added: "All WTO members have the right to use trade remedies, and whether and how (within the constraints of the WTO rules) any individual member does so is the result of its own policy decisions. In taking such decisions, members consider a host of factors and elements, which may in some cases include climate change impacts."

The paper also said some countries impose higher tariffs on electric vehicles than they do on vehicles powered by internal combustion engines.

Crude oil is only tariffed at .08% on average, the authors noted. WTO members cannot hike a tariff unilaterally to make up for lowering in another area unless that hike is below the bound tariff rate.

On carbon taxes, the WTO wrote: "to address potential carbon leakage and competitiveness concerns arising from variations in the level of carbon prices, economies are increasingly considering the introduction of border measures, such as border carbon adjustments. Unless effectively managed and coordinated, the situation could escalate into trade tensions, which could adversely affect overall well-being and undermine the beneficial role of trade in fighting climate change through a range of channels, such as the diffusion of green technologies."