2.7.2 Local Content Rules

LPDD Recommendation: “Congress, states, and local governments should avoid adopting decarbonization laws that contain LCRs. However, if local governments, states, or the federal government should design a decarbonization law that contains LCRs, it should: (a) meet one or more of the exceptions in GATT Article XX; (b) meet the national treatment requirements under GATT Article III; (c) make every effort to ensure that they do not “constitute a means of arbitrary or unjustifiable discrimination” or a “disguised restriction on international trade”; and (d) demonstrate that otherwise trade-restrictive measures were the only ones available to meet those policy objectives or that there were no less trade-restrictive measures available. Otherwise, they should limit the LCR to government procurement, particularly if it is linked to decarbonization policies or protection of public health.”