Renewable Energy: How trade policy supports deployment and value addition in developing countries

How trade policy supports deploymentand value addition in developing countries The International Trade Centre (ITC) is the joint agency ofthe World Trade Organization and the United Nations. Street address:ITC54-56, rue de Montbrillant1202 Geneva, SwitzerlandPostal address:ITCPalais des Nations1211 Geneva 10, SwitzerlandTelephone:+41-22 730 0111Fax:+41-22 733 4439E-mail:itcreg@intracen.orgInternet:http://www.intracen.org Renewable Energy How trade policy supports deploymentand value addition in developing countries About the paper This paper explores global trade in solar photovoltaic and wind energy components, analysing trade flows, tariffs andnon-tariff measures, with a focus on seven developing countries: the Dominican Republic, Ecuador, Kenya, Mauritius, thePhilippines, Senegal and Viet Nam. The main findings are that low tariffs have reduced the cost of renewable energy deployment by enabling access toaffordable imports. The analysis offers policy options for developing countries, including stronger regulatory frameworks,investment in export market knowledge, regional market expansion and capacity building in customs and standards. Tradeagreements can also attract foreign investment and ease market entry of experts. Publisher:International Trade Centre Title:Renewable Enery: How trade policy supports deployment and value addition in developing countries Publication date and place:Geneva, November 2024 Page count:78 Language(s):English ITC Document Number:GIVA-24-172.E Citation:International Trade Centre (2024).Renewable Enery: How trade policy supports deployment and value addition in developing countriesITC, Geneva. For more information, contact:Alexander Kasterine atkasterine@intracen.org ITC encourages the reprinting and translation of its publications to achieve wider dissemination. Short extracts of this paper may be freelyreproduced, with due acknowledgement of the source. Permission should be requested for more extensive reproduction or translation. A copyof the reprinted or translated material should be sent to ITC. Digital image(s) on the cover: © Shutterstock © International Trade Centre (ITC) Foreword The warnings are growing fast, both in number and fervour: the window to stay within the Paris Agreement’s 1.5°Ctemperature limit is narrowing and, with it, the prospects of ensuring that future generations will not have to face the mostcalamitous impacts of a warming planet. This threat is not just on some distant horizon; countries around the world arealready experiencing previews of the potential devastation to come, amid natural disasters and shifting weather patternsthat are disrupting lives and livelihoods. This is a toll that, while felt by all, affects some more harshly than others. As United Nations Secretary-General AntónioGuterres told leaders at the start of the World Climate Action Summit in December 2023, ‘Climate chaos is fanning theflames of injustice.’ There are, however, tried and tested solutions, he noted, including renewable energy, ‘the gift thatkeeps on giving’. There are indeed promising developments on the renewable energy front. Today, solar photovoltaic (PV) and windtechnologies play a leading role in new electricity capacity installations. At the level of international policy, governmentsat the United Nations Framework Convention on Climate Change 28thConference of the Parties (COP28) issued a clearsignal in favour of these technologies. In the final decision for the first Global Stocktake under the Paris Agreement, thetreaty’s parties called for increasing renewable energy capacity three-fold by the end of this decade. How this commitment will translate into practice over the coming years – including in new and updated nationally determinedcontributions – remains to be seen. Despite major strides forward, including the move by many governments to set theirown renewable energy targets, significant limitations remain to deploying renewable energy installations at a faster pace. This paper is part of the International Trade Centre’s (ITC) contribution towards helping governments tackle those limitationsand get closer to achieving that COP28 renewable energy goal. Using ITC Trade Map, the paper analyses the trade in solarPV and wind system components and how it can help improve access to these components and services while buildingvalue in supply chains in developing countries. The authors’ use of case studies shows that there are already best practices from which to draw. Additionally, therecommendations in this paper show clearly that trade has an important role to play in supporting faster renewable energydeployment, especially in developing economies. Pamela Coke-HamiltonExecutive DirectorInternational Trade Centre Acknowledgements This paper was prepared under the supervision of Alexander Kasterine, Senior Adviser, Trade and Environment, ITC.The core team was composed of Adam Adou (Associate Programme Officer), Divya Prabhakar, (Trade P