The Energy Charter Treaty
The Energy Charter Treaty (ECT) was designed to enable multilateral cooperation in the energy sector. However, in the decades since its signature, it has proven to be the most used treaty in investor–state arbitration, leading to record-breaking damages awards that have cost governments millions of dollars. The looming threat of claims from fossil fuel investors can prevent governments from taking ambitious climate action. Widespread recognition that the ECT is an obstacle to the transition to a low-carbon economy had led to negotiations on how to effectively “modernize” the treaty.
IISD conducts research, analysis, and capacity-building events to influence the modernization process and ensure it supports an expedited phase-out from fossil fuels, as well as to prevent the ECT model from being replicated or maintained in other regions of the Global South. We also actively engage with policy-makers, civil society actors, and the wider public on legal and policy options, including the possibility of withdrawal and termination. In 2020, we worked with partners to urge the European Commission to reconsider its approach to ECT modernization so that the treaty undergoes the reforms necessary for achieving climate action objectives.
IISD conducts in–depth research on the ECT’s design, implementation, and implications for sustainable development objectives—especially as they relate to climate action.
Submission to the Organisation for Economic Co-operation and Development on Investment Agreements and Climate Change
This document by CIEL, ClientEarth, and IISD was submitted to the OECD's public consultation on how policy–makers can redesign investment treaties and policies in response to the climate crisis.
How the Energy Charter Treaty Risks Undermining the Outcomes of COP 26
This article examines how new climate pledges, including commitments to phase out coal, halt new drilling for gas and oil reserves, and reduce global methane emissions, might be undermined by the ECT.
Investor–State Disputes in the Fossil Fuel Industry
This report analyzes the extent to which investor–state disputes protect foreign investments in fossil fuel projects—and therefore obstruct climate action.
Investment Protection Over Climate Protection?
This blog post in one of Germany's leading constitutional law publications discusses withdrawal from the ECT in the context of the German parliamentary elections. In German.
Debunking Myths on the ECT and the Global Climate Agenda
This article debunks assumptions that the ECT is an adequate legal instrument for protecting and promoting investments in renewable energies.
Reform or Withdrawal from the ECT: What does it mean for coal?
This article focuses on how reforming—or withdrawing from—the ECT would address the urgent need to phase out coal–fired power plants.
Events and capacity building
IISD hosts events and capacity building workshops to address the concerns that the ECT raises for a variety of audiences, including political stakeholders, developing country partners, and civil society.
Aligning Investment and Climate Goals: Where does the Energy Charter Treaty modernization stand?
This webinar, hosted in partnership with the Centre for International Environmental Law and ClientEarth, will discuss the progress achieved so far in the ECT modernization process.
The ECOWAS Energy Protocol: Training workshop for West Africa
This workshop for member states of the West African Economic and Monetary Union focused on the ECOWAS Energy Protocol, its risks in relation to energy transition policies, and potential options for reform.
Leaving the ECT: Overcoming the Sunset Clause obstacle
IISD experts were invited to be panelists at a webinar hosted by the European Parliament on options for withdrawal from the ECT.
Virtual Discussion on the ECT Modernization Process
IISD and ClientEarth held virtual discussions with EU member state officials to examine the key issues at play in the modernization negotiations.
Deal for Modernized Energy Charter Treaty Insufficient for Ambitious Climate Action
The new "agreement in principle" for a modernized Energy Charter Treaty falls short of pledges to make the trade and investment deal better suited to achieving international climate goals, IISD experts say.
Oil Companies Are Suing to Block Climate Action – With 72% Success
Fossil fuel investors are adopting a bold new legal tactic in response to efforts to limit global warming: they are going to private international tribunals to argue that climate change policies are illegally cutting into their profits and they must therefore be compensated. Now governments are scrambling to figure out how to not get sued for billions when enacting climate policies.
Governments' Climate Laws Could Spur $340B In ISDS Claims
As governments consider how and when to enact legislation or mitigation measures meant to address climate change, a study shows there is a pricey cause for concern as fossil fuel companies could bring legal claims worth billions of dollars against them in order to protect their assets.
The fossil fuel industry has a trillion-dollar secret weapon to kneecap climate action
On his first day in office, President Joe Biden revoked the permit for the controversial Keystone XL Pipeline, which would have brought exceptionally dirty oil south from Canada across the Plains. The project’s owner, Calgary-based TC Energy, saw billions in future profits go up in smoke. So it turned to an arcane but potentially explosive tool to try to recoup the loss, filing a claim under the now-defunct North American Free Trade Agreement. The company is seeking $15 billion.
Investor-state disputes threaten the global green energy transition
To limit global warming to below 1.5°C, governments will have to simultaneously curb demand for fossil fuels and limit supply. However, efforts to limit supply will affect asset holders, particularly in the upstream (exploration and production) and midstream (transportation and storage) portions of the supply chain.
What Is the Energy Charter Treaty?
The Energy Charter Treaty is an outdated investment treaty that is threatening to protect fossil fuel investors at the expense of critical climate action.
How a little-known energy treaty could thwart global climate action
As many publicly traded companies around the world hold their annual general meetings, climate-conscious shareholders are upping pressure on financial giants to slash their investments in coal, oil and gas - fast.
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