Tackling fossil fuel subsidies through international trade agreements

The document examines why the World Trade Organization (WTO) has seen limited legal action against fossil fuel subsidies despite their distorting effects on trade and investment. It analyzes five G20 support measures against the 1994 Agreement on Subsidies and Countervailing Measures (ASCM), noting the specific difficulty of litigating consumption subsidies and the lack of transparency in subsidy notifications. To address these gaps, the paper proposes five reform avenues: technical assistance, enhanced transparency, credible reform pledges, a political declaration, and expanding the category of prohibited subsidies.

• Fossil fuel subsidies, estimated at several hundred billion dollars annually, hinder Sustainable Development Goals and climate objectives by diverting investment from health, education, and renewable energy, while locking in carbon-intensive energy systems.
• Despite the WTO's role in disciplining trade-distorting subsidies, there is a discrepancy where renewable energy support measures are frequently disputed, but no legal proceedings have been initiated by Members against subsidies for coal, gas, or oil.
• Litigating fossil fuel consumption subsidies is particularly difficult, a problem compounded by the fact that notification rates for these subsidies within the WTO system are disappointingly low.

APA

Climate Strategies (2017). Tackling fossil fuel subsidies through international trade agreements. https://climatestrategies.org/publication/tackling-fossil-fuel-subsidies-through-international-trade-agreements/

Chicago

Climate Strategies. Tackling fossil fuel subsidies through international trade agreements. 2017. https://climatestrategies.org/publication/tackling-fossil-fuel-subsidies-through-international-trade-agreements/.

Wikipedia

{{cite report |author=Climate Strategies |title=Tackling fossil fuel subsidies through international trade agreements |date=16 November 2017 |url=https://climatestrategies.org/publication/tackling-fossil-fuel-subsidies-through-international-trade-agreements/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatestrategies2017tackling, author = {{Climate Strategies}}, title = {{Tackling fossil fuel subsidies through international trade agreements}}, institution = {Climate Strategies}, year = {2017}, month = nov, url = {https://climatestrategies.org/publication/tackling-fossil-fuel-subsidies-through-international-trade-agreements/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }