Energy has come to the forefront of the public debate in the past decade. Renewable energy certificates (RECs) are instruments that allow countries to promote energy generation from renewable sources and can be part of domestic policies aimed at climate change mitigation and adaptation. In a recent TILEC discussion paper TILEC member Panagiotis Delimatsis
discusses the issues raised by the nature of RECs, which can be traded in secondary markets. Concerns arise from the General Agreement on Trade in Services (GATS) and the multilateral regulation of trade in financial services, notably in the case where World Trade Organization (WTO) Members undertook sweeping commitments in financial services which equally apply to trade in RECs. The alleged dichotomy between trading in emission allowances and trading in RECs may also be problematic. The paper argues that WTO Members may be interested in considering whether a unified approach regarding energy-related services and trading of related financial instruments (such as RECs or emission rights) makes sense in the medium term. Indeed, as things now stand with the current classification system, Members may ultimately realize that they have already undertaken commitments in energy-related sectors,
e.g. in financial services, that they had not intended to liberalize. The paper is to appear in the World Trade Review.
