Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-14T07:12:45.882Z Has data issue: false hasContentIssue false
  • English
  • Français

‘Fossil Fueling the Apocalypse’: Australian Coal Subsidies and the Agreement on Subsidies and Countervailing Measures

Published online by Cambridge University Press:  12 March 2018

CHRISTIAN HARRIS SLATTERY
CHRISTIAN HARRIS SLATTERY*
Affiliation:
The University of Melbourne
*
*Email: christian.slattery@gmail.com
Get access Rights & Permissions [Opens in a new window]

Abstract

Global fossil fuel subsidies are substantial and contribute to climate change. They also undermine the ambitions of the Paris Agreement. However, under the WTO, the international community's foremost economic institution, it is renewable energy subsidies, not fossil fuel subsidies, that have been subjected to litigation. To date, no fossil fuel subsidy has ever been brought before the WTO's Dispute Settlement Body (DSB). This paper makes a unique contribution to the literature on energy subsidies by applying the WTO covered Agreement on Subsidies and Countervailing Measures (1994) (SCM Agreement) to a specific government measure designed to support the coal export industry in Australia: namely, the proposed concessional loan for the construction of a rail line between the Carmichael coal mine and Abbot Point coal port by the Northern Australia Infrastructure Facility (NAIF). In finding that this measure is in breach of the SCM Agreement, this paper foreshadows future litigation and provides guidance to non-government organizations (NGOs) seeking to identify other unlawful fossil fuel subsidies.

Type
Review Article
Information
World Trade Review , Volume 18 , Issue 1 , January 2019 , pp. 109 - 132
Copyright
Copyright © Christian Harris Slattery 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I extend my gratitude to Associate Professor Margaret Young for her assistance in shaping the direction of this paper and for facilitating stellar subjects on the World Trade Organization and climate change law.

References

ABC News (2017), ‘Donald Trump Announces US Withdrawing from Paris Climate Deal’, 2 June 2017, www.abc.net.au/news/2017-06-02/donald-trump-announces-us-withdrawing-from-paris-climate-deal/8580980.Google Scholar
Alberici, Sacha et al. (2014), Subsidies and Costs of EU Energy, European Commission, https://ec.europa.eu/energy/sites/ener/files/documents/ECOFYS%202014%20Subsidies%20and%20costs%20of%20EU%20energy_11_Nov.pdf.Google Scholar
Aston, H. (2015), ‘Moral Imperative in Australia's Biggest Coal Mine, Says Resources Minister Josh Frydenberg’, The Sydney Morning Herald, 18 October 2015, www.smh.com.au/federal-politics/political-news/moral-imperative-in-australias-biggest-coal-mine-says-resources-minister-josh-frydenberg-20151017-gkbu0s.html.Google Scholar
Bennett, J. (2017), ‘Adani: Prime Minister Malcolm Turnbull meets with Chairman, Reiterates Support for Mine’, ABC News, 11 April 2017, www.abc.net.au/news/2017-04-11/turnbull-meets-with-adani-chairman-during-india-visit/8432938.Google Scholar
Birhanu Asmelash, H. (2015), ‘Energy Subsidies and WTO Dispute Settlement: Why Only Renewable Energy Subsidies Are Challenged’, Journal of International Economic Law, 18(2): 261–285.Google Scholar
Bougette, P. and Charlier, C. (2015), ‘Renewable Energy, Subsidies, and the WTO: Where Has the “Green” Gone?’, Energy Economics, 51 (September): 407–416.Google Scholar
Brewer, T. L. (2003), ‘The Trade Regime and the Climate Regime: Institutional Evolution and Adaptation’, Climate Policy, 3(4): 329–341.Google Scholar
Burke, G. and Clark, D. (2016), ‘Adani's $2 Billion Carmichael Rail Line in Queensland Closer to Federal Loan’, ABC News, 3 December 2016, www.abc.net.au/news/2016-12-03/adani-carmichael-rail-line-closer-to-federal-loan/8089790.Google Scholar
Casier, L., Fraser, R., Halle, M., and Wolfe, R. (2014), ‘Shining a Light on Fossil Fuel Subsidies at the WTO: How NGOs Can Contribute to WTO Notification and Surveillance’, World Trade Review, 13(4): 603–632.Google Scholar
Chubb, P. (2014), Power Failure: The Inside Story of Climate Politics under Rudd and Gillard, Collingwood: Black Inc.Google Scholar
Coady, D., Parry, I., Sears, L., and Shang, B. (2015), How Large Are Global Energy Subsidies? Working Paper no. 15/105, International Monetary Fund, www.imf.org/en/Publications/WP/Issues/2016/12/31/How-Large-Are-Global-Energy-Subsidies-42940.Google Scholar
Coady, D., El-Said, M., Gillingham, R., Medas, P., and Newhouse, D. (2006), The Magnitude and Distribution of Fuel Subsidies: Evidence from Bolivia, Ghana, Jordan, Mali, and Sri Lanka, Working Paper no. 06/247, International Monetary Fund, www.imf.org/external/pubs/ft/wp/2006/wp06247.pdf.Google Scholar
D'Orsi, M. (2014), ‘Heated Skirmishes in the Solar Sector: Do Solar-PV Feed-in Tariffs Constitute Trade-Related Investment Measures and Subsidies Prohibited under the WTO Regime?’, American University International Law Review, 29(3): 673–716.Google Scholar
Doelle, M. (2016), ‘The Paris Agreement: Historic Breakthrough or High Stakes Experiment?’, Climate Law, 6(1/2): 1–20.Google Scholar
Ellis, J. (2010), The Effects of Fossil-Fuel Subsidy Reform: A Review of Modelling and Empirical Studies, Geneva: Global Subsidies Initiative, www.iisd.org/gsi/sites/default/files/effects_ffs.pdf.Google Scholar
Ewart, D. L., Vaughn, R., and Marston & Marston Inc. (2009), ‘Indonesian Coal’, World Coal Asia Special, May, 2009, www.marston.com/Portals/0/MARSTON_Review_of_Indonesian_Thermal_Coal_Industry.pdf.Google Scholar
Fears, D. (2017), ‘Donald Trump Promises to Bring Back Coal Jobs but Experts Disagree’, The Independent, 29 March 2017, www.independent.co.uk/news/world/americas/donald-trump-coal-mining-jobs-promise-experts-disagree-executive-order-a7656486.html.Google Scholar
Genest, A. (2015), ‘The Canada-FIT Case and the WTO Subsidies Agreement: Failed Fact-Finding, Needless Complexity, and Missed Judicial Economy’, McGill International Journal of Sustainable Development Law and Policy, 10(2): 237–258.Google Scholar
Harris, P. G. and Lee, T. (2017), ‘Compliance with Climate Change Agreements: The Constraints of Consumption’, International Environmental Agreements: Politics, Law and Economics, 17(6): 779–794.Google Scholar
International Energy Agency (2012), Energy Policies of IEA Countries: Australia 2012 Review, Paris: IEA, www.iea.org/publications/freepublications/publication/Australia2012_free.pdf.Google Scholar
International Energy Agency (2014), World Energy Outlook 2014, Paris: IEA, www.iea.org/publications/freepublications/publication/WEO2014.pdf.Google Scholar
International Energy Agency (2016a), Coal Information, Paris: IEA.Google Scholar
International Energy Agency (2016b), World Energy Outlook 2016, Paris: IEA, www.iea.org/newsroom/news/2016/november/world-energy-outlook-2016.html.Google Scholar
IEA, OPEC, OECD, and World Bank (2011), Joint Report by IEA, OPEC, OECD and World Bank on Fossil-Fuel and other Energy Subsidies: An Update of the G20 Pittsburgh and Toronto Commitments, www.oecd.org/env/49090716.pdf.Google Scholar
Killoran, M. and McCarthy, J. (2016), ‘Matt Canavan says “Positive News” is set to be announced on Adani Mega Mine’, The Courier Mail, 5 December 2016, www.couriermail.com.au/news/queensland/matt-canavan-says-positive-news-is-set-to-be-announced-on-adani-mega-mine/news-story/a7fadc07f070e64cf1e4f9c3cdfd8927.Google Scholar
Kojima, M. and Koplow, D. (2015), Fossil Fuel Subsidies: Approaches and Valuation, Working Paper no. 7220, World Bank Group, http://documents.worldbank.org/curated/en/961661467990086330/pdf/WPS7220.pdf.Google Scholar
Koplow, D. (2009), Measuring Energy Subsidies Using the Price-Gap Approach: What Does It Leave Out? Manitoba: International Institute for Sustainable Development, https://www.iisd.org/pdf/2009/bali_2_copenhagen_ff_subsidies_pricegap.pdf.Google Scholar
Koziol, M. and Wroe, D. (2016), ‘Turnbull Set for Adani talks Amid Rumours Government Will Chip in $1B for Railway Line’, The Sydney Morning Herald, 5 December 2016.Google Scholar
Leitner, K. and Lester, S. (2015), ‘WTO Dispute Settlement 1995–2014 – A Statistical Analysis’, Journal of International Economic Law, 18(1): 203–214.Google Scholar
Marhold, A.-A. (2017), ‘Subsidy Regulation in WTO Law: Some Implications for Fossil Fuels and Renewable Energy’, in Hancher, L., De Hauteclocque, A., and Salerno, F. M. (eds.), State Aid in the Energy Sector, Oxford: Hart Publishing.Google Scholar
Mavroidis, P. C. (2012), Trade in Goods, Oxford: Oxford Public International Law.Google Scholar
McKitrick, R. (2017), ‘Global Energy Subsidies: An Analytical Taxonomy’, Energy Policy, 101 (February): 379–385.Google Scholar
Meyer, T. (2017), ‘Explaining Energy Disputes at the World Trade Organization’, International Environmental Agreements: Politics, Law and Economics, 17(3): 391–410.Google Scholar
Meyer, T. (2015), ‘How Local Discrimination Can Promote Global Public Goods’, Boston University Law Review, 95(6): 1937–2025.Google Scholar
Norris, G. (2017), ‘Aurizon Signals its Plans for Mine Link’, The Courier Mail, 16 March 2017, http://www.couriermail.com.au/news/queensland/aurizon-seeks-funding-for-abbot-point-to-galilee-basin-rail-link/news-story/d7d70d6082b89b8173dcf4cc5fd16493.Google Scholar
Organisation for Economic Co-operation and Development (OECD) (2013), Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels 2013, Paris: OECD Publishing, www.oecd.org/environment/inventory-of-estimated-budgetary-support-and-tax-expenditures-for-fossil-fuels-2013-9789264187610-en.htm.Google Scholar
Robertson, J. (2016), ‘Adani Coal Mine: Green Groups Fume Over Plan for $1B Federal Loan’, The Guardian, 3 December 2016, https://www.theguardian.com/business/2016/dec/03/adani-coal-mine-green-groups-fume-over-plan-for-1b-federal-loan.Google Scholar
Rockström, J., Gaffney, O., Rogelj, J., Meinshausen, M., Nakicenovic, N., and Schellnhuber, H. J. (2017), ‘A Roadmap for Rapid Decarbonization’, Science, 355(6331): 1269–1271.Google Scholar
Rubini, L. (2015), ‘The Wide and the Narrow Gate: Benchmarking in the SCM Agreement after the Canada–Renewable Energy/FIT Ruling’, World Trade Review, 14(2): 211–237.Google Scholar
Shadikhodjaev, S. (2015), ‘Renewable Energy and Government Support: Time to “Green” the SCM Agreement?’, World Trade Review, 14(3): 479–506.Google Scholar
Shah, V. R. (2007), ‘The Allocation of Free Emissions Allowances by Germany to Its Steel Industry: A Possible Subsidy Claim under the WTO Agreement on Subsidies and Countervailing Measures’, American University International Law Review, 22(3): 445–478.Google Scholar
Skovgaard, J. (2017), ‘The Devil Lies in the Definition: Competing Approaches to Fossil Fuel Subsidies at the IMF and the OECD’, International Environmental Agreements: Politics, Law and Economics, 17(3): 341–353.Google Scholar
Steenblik, R. (2008), A Subsidy Primer, Geneva: Global Subsidies Initiative of the International Institute for Sustainable Development, www.iisd.org/gsi/sites/default/files/primer.pdf.Google Scholar
Stevens, M. (2017), ‘Aurizon Returns to Galilee Coal by Rail’, The Australian Financial Review, 15 March 2017, www.afr.com/business/energy/aurizon-returns-to-the-galilee-basin-with-northern-infrastructure-fund-plan-20170315-guys3y.Google Scholar
Swann, T. (2017), Don't be so NAIF: Adani and Governance of the Northern Australia Infrastructure Facility (NAIF), Sydney: The Australia Institute, www.tai.org.au/sites/defualt/files/P318%20Dont%20be%20so%20naif%20FINAL.pdf.Google Scholar
Tordo, S., Warner, M., Manzano, O. E., and Anouti, Y. (2013), Local Content Policies in the Oil and Gas Sector, Report No. 78994, Washington, DC: The World Bank.Google Scholar
Turnbull, M. (2017), ‘Address to the National Press Club’, Speech given to the National Press Club, Canberra, 1 February 2017, www.liberal.org.au/latest-news/2017/02/01/MTNPC.Google Scholar
Van Asselt, H. and Kulovesi, K. (2017), ‘Seizing the opportunity: tackling fossil fuel subsidies under the UNFCCC’, International Environmental Agreements: Politics, Law and Economics, 17(3): 357–370.Google Scholar
Van den Bossche, P. and Zdouc, W. (2013), The Law and Policy of the World Trade Organization, Cambridge: Cambridge University Press.Google Scholar
Verkuijl, C., van Asselt, H., Moerenhout, T., Casier, L., and Wooders, P. (2017), Tackling Fossil Fuel Subsidies through International Trade Agreements, Climate Strategies, November 2017.Google Scholar
Viellaris, R. (2016), ‘Turnbull's $1B Boost for Adani Megamine’, The Courier Mail, 3 December 2016.Google Scholar
Waltman, R. A. (2016), ‘Amending WTO Rules to Alleviate Constraints on Renewable Energy Subsidies’, Willamette Journal of International Law and Dispute Resolution, 23(2): 367–397.Google Scholar
Wold, C., Wilson, G., and Foroshani, S. (2012), ‘Leveraging Climate Change through the World Trade Organization: Are Fossil Fuel Subsidies Actionable?’, Georgetown Journal of International Law, 43(3): 635–694.Google Scholar
Yonetani, M. et al. (2015), Global Estimates 2015: People Displaced by Disasters, Geneva: Internal Displacement Monitoring Centre, www.internal-displacement.org/assets/library/Media/201507-globalEstimates-2015/20150713-global-estimates-2015-en-v1.pdf.Google Scholar
Young, M. A. (2017), ‘Energy Transitions and Trade Law: Lessons from the Reform of Fisheries Subsidies’, International Environmental Agreements: Politics, Law and Economics, 17(3): 371–390.Google Scholar