Trade vs. Climate

Any international treaty is going to consist of tradeoffs and choosing priorities. This is what foreign policy is made of. For the Obama administration, when its free trade agenda comes into conflict with its climate agenda, which wins? At least in this case with India, it seems that free trade comes out on top.

Over the last few years, India’s government has rolled out increasingly aggressive goals for ramping up the country’s use of solar energy — an objective that the Obama administration might be expected to support. “For President Obama and me, clean and renewable energy is a personal and national priority,” Indian Prime Minister Narendra Modi said during Obama’s visit to Delhi in January. Problem is, India originally proposed to meet its goals by relying heavily on its own domestically manufactured solar panels, which threatened the U.S. solar industry’s business in India. So, last year, the Obama administration filed a dispute with the World Trade Organization, and last month, the WTO ruled in favor of the U.S. — India’s requirement that a set percentage of its solar panels be made in India violated international trade law and would have to go.

This has outraged environmental groups in both countries, and has become a key point of discussion in a larger conversation about how climate change should affect international trade policies. Activists question why the U.S. government would bother to meddle with India’s renewable energy plans when faced with the sweeping threat of climate change.

Twice while the case was being decided, American environmental groups urged U.S. Trade Representative Michael Froman to let the issue drop. “While it is critical to support and build a U.S. solar industry, the development of our solar industry should not come at the expense of India’s ability to develop its solar industry,” 15 U.S. environmental groups wrote in a letter.

This is awful unfortunate. But it’s not surprising. The Obama administration, as we’ve seen in the Trans-Pacific Partnership, has placed its trade agenda above basically everything else, often alienating its own allies. The U.S. should actually be responding to this by mandating a percentage of its own solar panels are made in our own country so that we can build a green economy rather than outsourcing it all to China. A green economy is one where working class people who will never receive a college education can have a good job and live a middle-class lifestyle while building a more sustainable future. That doesn’t mean that all of our solar panels need to be built here. But some should. And we shouldn’t be going after nations like India that are thinking this way themselves. Using the WTO to attack clean energy policies is exactly the opposite of what the Obama administration should be doing. Alas, as we see through the TPP, the administration is more than happy to do corporations’ bidding on this issue, even when it undermines other parts of the president’s legacy. Disappointing position from Obama’s economic team.