Answer to Question #51794 in Economics for rini

Question

Note on local contents requirement.

Answer 1

Local content requirements (LCRs) are policy measures that typically require a certain percentage of intermediate goods used in the production processes to be sourced from domestic manufacturers. Local content requirements in renewable energy policy serve as either a precondition to receive government support or an eligibility requirement for government procurement in renewable energy projects. LCRs are usually coupled with other policy measures to encourage green growth.
The great majority of LCRs are aimed at sectors other than renewable energy. Collectively, LCRs in the renewable energy space probably impact over USD 100billion of trade annually, but the available data do not permit an estimate of trade impacted by LCRs.