How Can Trade Policy Maximize Benefits From Clean Energy Investment?

This research paper examines how trade policy instruments, such as import tariffs and local content requirements, can be used to maximize local economic benefits from renewable energy investments without increasing project costs or delaying the energy transition.

• National governments are increasingly using trade policy measures, including import tariffs and local content requirements, to incentivize domestic production and maximize local economic benefits from the increase in renewable energy projects.
• In low-income and lower-middle-income countries, import tariffs are generally lower for components sourced globally, such as solar modules or wind turbines, compared to components that can be more easily sourced domestically.
• The impact of tariffs on renewable energy deployment depends on the nature of the component: tariffs on items suited for local production (such as bulky wind towers where low transport costs provide an advantage) may stimulate productive capacity, whereas tariffs on components produced in only a few countries tend to hinder deployment.
• International efforts to liberalize environmental goods and services should be paired with incentives for competitive local production to strengthen the economic and political justification for transitioning to renewable energy.

APA

Bridle,, R. (2021). How Can Trade Policy Maximize Benefits From Clean Energy Investment? International Institute for Sustainable Development. https://www.iisd.org/publications/trade-clean-energy-investment

Chicago

Bridle,, Richard. How Can Trade Policy Maximize Benefits From Clean Energy Investment? International Institute for Sustainable Development, 2021. https://www.iisd.org/publications/trade-clean-energy-investment.

Wikipedia

{{cite report |last1=Bridle, |first1=Richard |title=How Can Trade Policy Maximize Benefits From Clean Energy Investment? |publisher=International Institute for Sustainable Development |date=21 July 2021 |url=https://www.iisd.org/publications/trade-clean-energy-investment |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bridle2021how, author = {Bridle,, Richard}, title = {{How Can Trade Policy Maximize Benefits From Clean Energy Investment?}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jul, url = {https://www.iisd.org/publications/trade-clean-energy-investment}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }