Tackling Fossil Fuel Subsidies through Trade Agreements

The briefing examines why fossil fuel subsidies have historically avoided challenges at the WTO, noting that WTO law often "undercaptures" these measures compared to renewable energy supports. Through a preliminary analysis of five G20 support measures, the authors find that consumption subsidies are particularly difficult to litigate due to a lack of specificity and difficulty in demonstrating adverse trade effects. To overcome these legal hurdles, the document proposes five reform avenues: technical assistance, improved transparency, political declarations, voluntary pledges with reporting, and the expansion of the ASCM's category of prohibited subsidies.

• Despite the WTO's capacity for disciplining trade-distorting measures, no fossil fuel subsidies have been disputed at the organization to date, whereas renewable energy support measures have faced numerous challenges over the last ten years.
• Fossil fuel subsidies often evade WTO challenges because WTO law tends to "undercapture" these measures relative to renewable energy supports, and long-standing subsidies are already integrated into investor decisions.
• A preliminary analysis of five G20 fossil fuel support measures indicates that litigating consumption subsidies through the ASCM is particularly difficult, often because they lack the specificity required to fall within the Agreement's scope.
• The document identifies five policy avenues to address fossil fuel subsidies beyond litigation: technical assistance and capacity building, improved transparency via notification and Trade Policy Reviews, political declarations on the WTO's role, pledges to reduce subsidies linked to review processes, and expanding the ASCM's category of prohibited subsidies.

APA

Verkuijl, C., van Asselt, H., Moerenhout, T., Casier, L., & Wooders, P. (2017). Tackling Fossil Fuel Subsidies through Trade Agreements. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2017/11/CS_WP3-Brief_FINAL-1.pdf

Chicago

Verkuijl, Cleo, Harro van Asselt, Tom Moerenhout, Liesbeth Casier, and Peter Wooders. Tackling Fossil Fuel Subsidies through Trade Agreements. Climate Strategies, 2017. https://climatestrategies.org/wp-content/uploads/2017/11/CS_WP3-Brief_FINAL-1.pdf.

Wikipedia

{{cite report |last1=Verkuijl |first1=Cleo |last2=van Asselt |first2=Harro |last3=Moerenhout |first3=Tom |last4=Casier |first4=Liesbeth |last5=Wooders |first5=Peter |title=Tackling Fossil Fuel Subsidies through Trade Agreements |publisher=Climate Strategies |date=October 2017 |url=https://climatestrategies.org/wp-content/uploads/2017/11/CS_WP3-Brief_FINAL-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{verkuijl2017tackling, author = {Verkuijl, Cleo and van Asselt, Harro and Moerenhout, Tom and Casier, Liesbeth and Wooders, Peter}, title = {{Tackling Fossil Fuel Subsidies through Trade Agreements}}, institution = {Climate Strategies}, year = {2017}, month = oct, url = {https://climatestrategies.org/wp-content/uploads/2017/11/CS_WP3-Brief_FINAL-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }