University of San Diego

San Diego Journal of Climate & Energy Law


This Article draws attention to the different outcomes that may result when WTO law is applied to resolve climate related national energy policy disputes, signals this might send for national energy policies, and how a subtle effect of indirect state liability may arise. Several pending or unresolved complaints currently at the WTO are used to demonstrate these effects. The complaints include the greenhouse gas controversy, the wind energy subsidies complaint, and the feed-in tariffs complaint. The next section, Section II, presents the basic WTO obligations of the four countries involved in these complaints (Japan, Canada, USA, China), and ways that state liability can theoretically arise. Section III explains, with some example cases, how the consistency of national environmental policies with WTO laws has previously been decided. Section IV explains the main energy-related obligations of the countries under the international climate change regime. Section V discusses those unresolved complaints in light of the countries’ WTO and climate regime obligations. Finally, the article concludes by demonstrating that the WTO not only has the power to change the direction of countries’ energy policies, but its decisions may also lead to indirect state liability.

It should be noted that this paper is not about the compatibility of national energy policies with WTO law per se. Therefore there is no exhaustive discussion of all analogous environmental compatibility cases. Select cases are discussed only as indicators of WTO’s potential to change national (energy) policies as well as to lead to a subtle and indirect effect on state liability.