Green Industrial Policy and the World Trading System

Drawing on the extensive industrial policy literature, this paper highlights some of the key lessons for policy makers considering adopting green industrial policies.

It also aims to contribute to the debates over whether WTO law needs to be reformed to accommodate industrial policy measures that address climate change and other global public goods. It finds a number of rationales for employing green industrial policies, including benefits that go beyond the national level to global goods. But the details matter; we have many more negative examples of industrial policy than we do positive. It finds that there may be a case for special trade rules that allow for industrial policy that achieves generally agreed global goods, though formulation of such exceptions would be challenging.