The politics of renewable energy trade: The US-China solar dispute

Abstract

The Chinese and US governments played significant roles in the development of renewable energy industries, seeing them as key growth sectors and crucial to addressing climate change. While the US and China cooperated in renewable energy development, since 2011 the countries have engaged in a protracted and major trade dispute in the solar photovoltaics industry. We propose that the US government's decision to impose, and then expand, tariffs on a number of Chinese solar producers can be explained though a model of coalitional politics, drawing on Actor-Centered Institutionalism and the Advocacy Coalition Framework. We show that a coalition of domestic manufacturers and congressional interests formed a protectionist coalition that utilized US trade law to their advantage. In doing so they sidelined a free trade coalition representing the majority of US solar photovoltaic firms. The institutional design of US trade law also facilitated the successful application of trade remedies. Our analysis suggests that the domestic politics of renewable energy trade make trade conflicts a likely outcome, leaving limited scope for policy to carefully manage the trade-off between protecting parts of manufacturing through tariffs and lowering the cost of renewable energy technologies to mitigate climate change.