Green Industrial Policy
How G20 Members Can Foster Better Practices Through Disclosure, Evaluation & Dialogue
Since the start of 2023, G20 members have justified over a trillion USD of corporate subsidies on climate change mitigation grounds or where “clean technologies” are eligible for state largesse. Public financing of the net-zero transition places pressures on national budgets. It also sets national decarbonisation efforts on a collision course with international subsidy rules and national countervailing duty laws. G20 cooperation can help to defuse such tensions before they further escalate and impede the rollout of effective climate policies. Failure to act risks fueling ruinous subsidy races, triggering economic countermeasures that create new barriers to trade in clean goods, and undermining public support for the transition.
This policy brief advances proposals that would, if implemented, translate the objectives of disclosure, evaluation, and dialogue into practice. Disclosure, policy analysis, and deliberation could be strengthened, over time, with a view to building confidence in the transition among national populations, G20 governments, and between trading partners. Adoption of our proposals would lay the groundwork for the development of better practices that are based on the guiding principle of maximizing emission reductions efficiently while minimizing negative cross border economic spillovers at the same time. Being cognizant of political constraints, we propose incremental progress from achieving individual policy disclosure by G20 members in the short term to meaningful policy alignment in the medium term.
