OECD Trade and Environment Working Papers

Selected studies addressing the policy interface between trade and environment prepared for use within the OECD. They address such issues a liberalizing trade in goods that affect the environment, and trade in environmental goods and services.


Liberalisation of Trade in Renewable Energy and Associated Technologies

Biodiesel, Solar Thermal and Geothermal Energy

This paper, the second in a series, examines the implications of liberalising trade in three forms of renewable energy: biodiesel, solar-thermal water heaters, and geothermal energy systems. Eliminating tariffs on renewable energy and associated goods — which are 15% or higher on an ad valorem basis in many developing countries — would reduce a burden on consumers of energy, particularly people living in rural areas of developing countries, as it is in such areas that many renewable fuels and renewable-energy technologies are making, and are likely to make, their greatest contribution. Manufacturers located in OECD countries would benefit from increased trade in equipment, but so would a growing number of companies based in developing countries. In the case of biodiesel, developing countries have the potential to become major suppliers to OECD countries. For the maximum benefits of trade liberalisation in biodiesel, and solar-thermal and geothermal technologies, to be realised, however, additional reforms may be required in importing countries’ domestic policies, especially those affecting the pricing of liquid fuels, competition in the electricity sector, and protection of the environment.


Keywords: developing countries, environmental technologies, environmental goods, renewable energy, trade
JEL: F14: International Economics / Trade / Empirical Studies of Trade; F18: International Economics / Trade / Trade and Environment; Q56: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth; Q42: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Alternative Energy Sources; Q48: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Energy: Government Policy
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