Of Markets and Subsidies: Counterintuitive Policy Trends for Clean Energy in the European Union and the United States

Transnational Environmental Law, Vol. 10, Forthcoming

Texas A&M University School of Law Legal Studies Research Paper No. 20-42

25 Pages Posted: 2 Dec 2020 Last revised: 9 Dec 2020

See all articles by Felix Mormann

Felix Mormann

Texas A&M University School of Law; Stanford Law School

Date Written: February 5, 2020

Abstract

The United States is commonly characterized as a nation with a deep distrust of big government and a strong commitment to markets and competition. In contrast, the prevailing image of the European Union is that of a highly bureaucratized polity favoring interventionist economic governance over free-market capitalism. In the context of clean energy, however, these roles appear to be somewhat reversed. A top-level survey of the U.S. clean energy policy landscape reveals a surprisingly pervasive reliance on government subsidies with few, if any, competitive elements. E.U. clean energy policy, meanwhile, reflects an unexpected commitment to market-based instruments and competition. This essay suggests that these counter-intuitive policy trends can be explained by critical differences in the black-letter law of both jurisdictions and its enforcement in the courts, among other factors. Unlike their American counterparts, E.U. judges prioritize the timely transition to a low-carbon energy economy over unrestricted competition among member states. As the European Union pushes for greater intrastate competition in clean energy policy, the United States focuses instead on defending the Founding Fathers’ ideal of unfettered interstate competition.

Keywords: energy policy, federalism, climate change, renewables, renewable energy, energy efficiency, comparative law, commerce clause, state aid

JEL Classification: H10, H70, K32, L10, O30, O10, O38, Q20, Q28, Q40, Q42, Q48

Suggested Citation

Mormann, Felix, Of Markets and Subsidies: Counterintuitive Policy Trends for Clean Energy in the European Union and the United States (February 5, 2020). Transnational Environmental Law, Vol. 10, Forthcoming, Texas A&M University School of Law Legal Studies Research Paper No. 20-42, Available at SSRN: https://ssrn.com/abstract=3706277 or http://dx.doi.org/10.2139/ssrn.3706277

Felix Mormann (Contact Author)

Texas A&M University School of Law ( email )

1515 Commerce St.
Fort Worth, TX 76102
United States

Stanford Law School ( email )

Steyer-Taylor Center for Energy Policy and Finance
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States

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