Agreement on Carbon Intensity, Responsible Mining Needed Internationally, Experts Say
The relationship between trade and green industrial policy is in tension, but Washington International Trade Association webinar panelists also said both supporting domestic interests and imports is unavoidable as the U.S. moves to reduce greenhouse gases.
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Vanessa Sciarra, vice president-trade and international competitiveness at the American Clean Power Association, said subsidies are necessary to expand renewable energy deployment and energy storage, and she thinks the U.S. will become a major player in batteries because of legislation that pushes to create a battery manufacturing base.
"We’ve got this sort of complicated relationship between climate and trade," she said during the Nov. 9 webinar. She said both the Inflation Reduction Act and the Creating Helpful Incentives to Produce Semiconductors and Science Act are aimed at building "some independent strengths in our supply chains. Some of our trading partners may take umbrage from that."
Sciarra asked how the U.S. government can reconcile industrial policies and the trade regime that the World Trade Organization represents. She said the international trade order has worked incredibly well. "If you’re going to jettison some of those rules, we need to be aware of some of those consequences," she said.
Moderator Maureen Hinman, co-founder and chairman of the Silverado Policy Accelerator, asked if discussions about harmonizing standards for clean products or responsible critical minerals mining could be done at the WTO.
Sciarra said those kinds of conversations are harder to have when more countries are negotiating. While the WTO is trying to be relevant in the space of trade and climate change, she said she thinks bilateral conversations with major allies and major trading partners will be more productive.
She also said utility-scale solar installations are down this year, mainly because of what she called "trade challenges," which seemed to be a reference to the threat of an antidumping and countervailing duty circumvention finding against Southeast Asian solar panel exporters.
"How defensive should our trade positions be? When we take strong defensive trade positions, that has a trade-off," she said.
Ryan Fitzpatrick, director of the climate and energy program at the centrist think tank Third Way, reminded the audience of why the IRA includes so many provisions designed to spur domestic or NAFTA-region manufacturing. "There are manufacturing communities that are really vital to the political success of this bill," he said.
Hinman asked if the U.S. will return to being a country with major mining operations, given concerns about over-reliance on China for critical minerals.
"If we have allies that are already invested in that space and are reliable and do it well, you may not need to reinvent the wheel," Sciarra responded. She said Canadian planning for mining and refining critical minerals is "really impressive."