Authors: Mercy Alexander, Tamanna Singh, Soumili Rakshit, Minakshi Chakraborty

ABSTRACT

Clean energy subsidies occupy a central position in contemporary climate policy, widely embraced as tools for accelerating decarbonization, fostering technological innovation, and supporting sustainable economic development. Governments increasingly justify these subsidies as necessary interventions to correct market failures associated with fossil fuel dependence. However, beyond their surface appeal lies a critical and under examined question of distribution: whether clean energy subsidies genuinely drive transformative industrial change or primarily operate as mechanisms that concentrate economic benefits among large corporate actors while displacing environmental costs across sectors, communities, and borders.

This research interrogates the economic and environmental impacts of clean energy subsidies through a critical legal and policy lens. It seeks to determine whether subsidy regimes meaningfully restructure industrial systems or merely reinforce existing power asymmetries by favoring corporations with the financial capacity, technological sophistication, and regulatory access needed to capture state incentives.

The study examines how subsidy design, eligibility criteria, and regulatory frameworks shape market participation, often marginalizing small-scale producers and local enterprises, thereby limiting inclusive growth and competitive innovation. Beyond economic allocation, it exposes hidden environmental externalities within subsidized clean energy systems. While subsidies often reduce emissions at the point of generation, they obscure significant upstream and downstream environmental costs, including intensive mineral extraction, land degradation, water pollution, waste management challenges, and cross-border ecological harm linked to supply chains. These burdens are disproportionately borne by environmentally vulnerable regions, resource-rich developing states, and marginalised communities, raising concerns of environmental injustice and regulatory displacement rather than genuine sustainability.

The research assesses the extent to which existing legal instruments adequately internalise environmental costs, prevent regulatory capture, and ensure accountability across the clean energy value chain. Particular attention is given to environmental impact assessments, corporate disclosure obligations, and transnational regulatory gaps. The study adopts a doctrinal research methodology.

The research analyses statutes and regulatory frameworks as primary sources, alongside journal articles, newspapers, and other secondary materials. Methodologically, it adopts a doctrinal and comparative legal approach to evaluate subsidy frameworks across selected jurisdictions. Ultimately, the study challenges the assumption that clean energy subsidies are inherently equitable and environmentally benign. It argues for recalibrated subsidy regimes that promote structural transformation, distributive fairness, and environmental integrity. By aligning economic incentives with robust accountability mechanisms, the study seeks to advance subsidy policies that deliver genuine clean energy transitions without exporting environmental harm or entrenching corporate dominance.