Antidumping and Feed-In Tariffs as Good Buddies? Modeling the EU-China Solar Panel Dispute

Abstract

The paper analyzes the interactions between trade and renewable energy policies based on the EU-China solar panel dispute which is the most significant antidumping (AD) complaint in Europe. We build a price competition duopoly model with differentiated products and intra-industry trade in photovoltaic (PV) equipment. We show that an optimal antidumping duty always increases with the feed-in tariff (FIT) program set in the home country. An appropriate antidumping duty—nullifying the dumping margin—decreases with the FIT program. We show that optimal FIT increases with the AD duty. Therefore, trade and renewable energy optimal policies may complement one another. Lastly, we introduce R&D activities in the PV sector, and international spillovers. We show that R&D makes the optimal FIT lower and increases the dumping margin. These effects are reinforced by technological spillovers.

Keywords

Antidumping FIT Solar Panels Renewable Energy Trade disputes EU China

Get full access to this article

View all access options for this article.

References

Anderson

S.P.

Schmitt

Thisse

J.F

(1995). “Who Benefits from Antidumping Legislation?” Journal of International Economics 38: 321-337. https://doi.org/10.1016/0022-1996(94)01347-U.d’

Aspremont,C. and A. Jacquemin (1988). “Cooperative and Noncooperative R&D in Duopoly with Spilloverg” American Economic Review 78: 1133-1137.

Bennear

L.S.

Stavins

R.N.

(2007). “Second-Best Theory and the Use of Multiple Policy Instruments.” Environmental and Resource Economics 37: 111-129. https://doi.org/10.1007/s10640-007-9110-y.

Bernhofen

D.M.

(1995). “Price Dumping in Intermediate Good Markets.” Journal of International Economics 39: 159-173.https://doi.org/10.1016/0022-1996(94)01357-X.

Blonigen

B.A.

Prusa

TJ.

(2016). “Dumping and Antidumping Duties.”In: Handbook of Commercial Policy, K. Bagwell and R.W. Staiger (eds), Elsevier B.V., Amsterdam, 107-159. https://doi.org/10.1016/bs.hescop.2016.04.008.

Bougette

Charlier

Ch.

(2015) “Renewable Energy, Subsidies, and the WTO: Where has the ’Green’ Gone?” Energy Economics 51: 407-416. https://doi.org/10.1016Zj.eneco.2015.07.006.

Charnovitz

Fischer

(2015). “Canada-Renewable Energy: Implications for WTO Law on Green and Not-So-Green Subsidies.” World Trade Review 14: 177-210. https://doi.org/10.1017/S1474745615000063.

Chen

(2015). “From Mercantile Strategy to Domestic Demand Stimulation: Changes in China’s Solar PV Subsidies.” Asia Pacific Business Review 21: 96-112. https://doi.org/10.1080/13602381.2014.939897.

Clarke

Collie

D.R.

(2003). “Product Differentiation and the Gains from Trade under Bertrand Duopoly.” Canadian Journal of Economics 36: 658-673. https://doi.org/10.1111/1540-5982.t01-2-00007.

10.

Collie

D.R.

V.P.M.

(2010). “Antidumping Regulations: Anti-Competitive and Anti-Export.” Review of International Economics 18: 796-806. https://doi.org/10.1111/j.1467-9396.2010.00891.x.

11.

Crowley

M.A.

Song

(2015). “Policy Shocks and Stock Market Returns: Evidence from Chinese Solar Panels.” Cambridge Working Papers in Economics No. 1529.

12.

Curran

(2015) “The Impact of Trade Policy on Global Production Networks: The Solar Panel Case.” Review of International Political Economy 22: 1025-1054. https://doi.org/10.1080/09692290.2015.1014927.

13.

Curran

Spigarelli

(2017). “Policy Shocks and Stock Market Returns: Evidence from Chinese Solar Panels.” Energy Policy 101: 670-682. https://doi.org/10.1016Zj.enpol.2016.09.018.

14.

Dinlersoz

Dogan

(2010). “Tariffs versus Anti-Dumping Duties.” International Review of Economics &Finance 19: 436-451. https://doi.org/10.1016/j.iref.2009.10.007.

15.

Drechsler

Meyerhoff

Ohl

(2012). “The Effect of Feed-In Tariffs on the Production Cost and the Landscape Externalities of Wind Power Generation in West Saxony, Germany.” Energy Policy 48: 730-736. https://doi.org/10.1016/j.enpol.2012.06.008.

16.

European Commission (2009). “Council Regulation No 1225/2009 of 30 November 2009 on protection against dumped imports from countries not members of the European Community.” Official Journal of the European Union 22.12.2009, L 343/51.

17.

European Commission (2016). “The European Union’s Measures against Dumped and Subsidized Imports of Solar Panels from China 29 February 2016 update .” http://trade.ec.europa.eu/doclib/docs/2015/july/tradoc_153587.pdf.

18.

European Commission (2017a). “Commission implementing Regulation (EU) 2017/367 of 1 March 2017.” Official Journal of the European Union, 03.03.2017, L 56/131.

19.

European Commission (2017b). “Commission Implementing Regulation (EU) 2017/1570 of 15 September 2017 amending Implementing Regulation (EU) 2017/366 and Implementing Regulation (EU) 2017/367.” Official Journal of the European Union, 16.9.2017, L 238/22.

20.

Farrell

Devine

M.T.

Lee

W.T

Gleeson

J.P.

Lyons

(2017). “Specifying An Efficient Renewable Energy Feed-in Tariff.” The Energy Journal 38: 53-75. https://doi.org/10.5547/01956574.38.2.nfar.

21.

Fischer

(2017). “Environmental Protection for Sale: Strategic Green Industrial Policy and Climate Finance.” Environmental and Resource Economics 66: 553-575. https://doi.org/10.1007/s10640-016-0092-5.

22.

Fischer

Greaker

Rosendahl

K.N.

(2018). “Strategic Technology Policy as a Supplement to Renewable Energy Standards.” Resource and Energy Economics 51: 84-98. https://doi.org/10.1016Zj.reseneeco.2017.05.006.

23.

Fischer

Preonas

(2010). “Combining Policies for Renewable Energy: Is the Whole Less Than the Sum of Its Parts?” International Review of Environmental and Resource Economic 4: 51-92. https://doi.org/10.1561/101.00000030.

24.

Gao

Miyagiwa

(2005). “Antidumping Protection and R&D Competition.” Canadian Journal of Economics 38: 211-227. https://doi.org/10.1111/j.0008-4085.2005.00276.x.

25.

Grau

Huo

Neuhoff

(2012). “Survey of Photovoltaic Industry and Policy in Germany and China.” Energy Policy 51: 20-37. https://doi.org/10.1016/j.enpol.2012.03.082.

26.

Goron

(2018). “Fighting Against Climate Change and for Fair Trade: Finding the EU’s Interest in the Solar Panels Dispute with China.” China-EU Law Journal. https://doi.org/10.1007/s12689-018-0080-z.

27.

Groba

Cao

(2015). “Chinese Renewable Energy Technology Exports: The Role of Policy, Innovation and Markets.” Environmental and Resource Economics 60: 243-283. https://doi.org/10.1007/s10640-014-9766-z.

28.

Huang

Fang

Gao

Wang

Sun

(2016). “Impact Assessment of International Anti-dumping Events on Synchronization and Comovement of the Chinese Photovoltaic Stocks.” Renewable and Sustainable Energy Reviews 59: 459-469. https://doi.org/10.1016/j.rser.2015.12.231.

29.

Hughes

Meckling

(2017). “The Politics of Renewable Energy Trade: The US-China Solar Dispute.” Energy Policy 105: 256-262. https://doi.org/10.1016/j.enpol.2017.02.044.

30.

International Energy Agency (IAE) (2006). “Renewable Energy: R&D Priorities. Insights from IAE Technology Programmes.” Report.

31.

Jaffe

A.B.

Newell

R.G.

Stavins

R.N.

(2005). “A Tale of Two Market Failures: Technology and Environmental Policy.” Ecological Economics 54: 164-174. https://doi.org/10.1016Zj.ecolecon.2004.12.027.

32.

Jaraite

Karimu

Andrius

Kazukauskas A.

(2017). “Policy-Induced Expansion of Solar and Wind Power Capacity: Economic Growth and Employment in EU Countries.” The Energy Journal 38: 197-222. https://doi.org/10.5547/01956574.38.5.jjar.

33.

Jenner

Chan

Frankenberger

Gabel

(2012). “What Drives States to Support Renewable Energy?.” The Energy Journal 33: 1-12. https://doi.org/10.5547/01956574.33.2.1.

34.

Kao

K.F.

Peng

(2016). “Anti-dumping Protection, Price Undertaking and Product Innovation.” International Review of Economics &Finance 41: 53-64. https://doi.org/10.1016/j.iref.2015.09.006.

35.

Konings

Vandenbussche

(2008). “Heterogeneous Responses of Firms to Trade Protection.” Journal of International Economics 76: 371-383. https://doi.org/10.1016/jjinteco.2008.08.002.

36.

Lehmann

Gawel

(2013). “Why Should Support Schemes for Renewable Electricity Complement the EU Emissions Trading Scheme?” Energy Policy 52: 597-607. https://doi.org/10.1016/j.enpol.2012.10.018.

37.

Lewis

J. I.

(2014). “The Rise of Renewable Energy Protectionism: Emerging Trade Conflicts and Implications for Low Carbon Development.” Global Environmental Politics 10-35. https://doi.org/10.1162/GLEP_a_00255.

38.

Lipsey

R.G.

Lancaster

(1956). “The General Theory of Second Best.” Review of Economic Studies 24: 11-32. https://doi.org/10.2307/2296233.

39.

Perez de Arce, M. and E. Sauma (2016). “Comparison of Incentive Policies for Renewable Energy in an Oligopolistic Market with Price-Responsive Demand.” The Energy Journal 37: 159-198. https://doi.org/10.5547/01956574.37.3.mdea.

40.

Pillai

(2015). “Drivers of Cost Reduction in Solar Photovoltaics.” Energy Economics 50: 286-293. https://doi.org/10.1016/j.eneco.2015.05.015.

41.

Rodrik

(2014). “Green Industrial Policy.” Oxford Review of Economic Policy 30: 469-91. https://doi.org/10.1093/oxrep/gru025.

42.

Shadikhodjaev

(2015). “Renewable Energy and Government Support: Time to ‘Green’ the SCM Agreement?” World Trade Review 14: 479-506. https://doi.org/10.1017/S1474745614000317.

43.

Sykes

A.O.

(2014). “The Economics of Injury in Antidumping and Countervailing Duty Cases.” International Review of Law and Economics 16: 5-26. https://doi.org/10.1016/0144-8188(95)00054-2

44.

Veugelers

Vandenbussche

(1999). “European Anti-Dumping Policy and the Profitability of National and International Collusion.” European Economic Review 43: 1-28. https://doi.org/10.1016/S0014-2921(97)00128-1.

45.

Voituriez

Wang

(2015). “Real Challenges behind the EU-China PV Trade Dispute Settlement.” Climate Policy 15: 670-677. https://doi.org/10.1080/14693062.2015.1009868.

46.

World Intellectual Property Organization (WIPO) (2014). “Global Challenges Report. Renewable Energy Technology: Evolution and Policy Implications—Evidence from Patent Literature.” Report, Geneva.

47.

Zanardi

(2006). “Antidumping: A Problem in International Trade.” European Journal of Political Economy 22: 591-617.https://doi.org/10.1016/j.ejpoleco.2005.12.003.

48.

Zhang

M.M.

Zhou

D.Q.

Zhou

Liu

G.Q.

(2016). “Optimal Feed-in Tariff for Solar Photovoltaic Power Generation in China: A Real Options Analysis.” Energy Policy 97: 181-192. https://doi.org/10.1016/j.enpol.2016.07.028.

49.

Zhang

(2018). “Wind and Solar Power in China.” In: China's Electricity Sector, Springer, Singapore, 83-105. https://doi.org/10.1007/978-981-10-8192-7_4.

Supplementary Material

Please find the following supplemental material available below.

For Open Access articles published under a Creative Commons License, all supplemental material carries the same license as the article it is associated with.

For non-Open Access articles published, all supplemental material carries a non-exclusive license, and permission requests for re-use of supplemental material or any part of supplemental material shall be sent directly to the copyright owner as specified in the copyright notice associated with the article.

0.00 MB

0.09 MB