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The Energy Charter Treaty

The Energy Charter Treaty (ECT) is a 1990s-era trade and investment accord that over the years has been shown to be deeply problematic on a number of levels. IISD is actively engaged with governments, civil society, academia, legal experts, and other stakeholders to help address many of these challenges. 

The ECT was designed with the objective of enabling 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, has led to record-breaking damages awards, and is a hindrance to ambitious climate action.

Research and analysis

IISD has undertaken in-depth research and analysis on the ECT’s design, implementation, and implications for sustainable development objectives—especially as they relate to climate action and the energy transition.

  • Our flagship journal, Investment Treaty News, has covered investor-state arbitrations involving the ECT in detail and also provided reporting and commentary on the Treaty’s latest developments.
  • IISD led the drafting of the Treaty on Sustainable Investment for Climate Change Mitigation and Adaptation, which was one of the winners of the Stockholm Treaty Lab's 2018 prize. This treaty sets out a legal framework aimed at fostering climate-friendly, resilient investments while disincentivizing unsustainable investments, along with enabling a just transition.
  • Our webinars have explained how governments could withdraw from the ECT or terminate it outright, along with the risks of the ECT’s expansion to other countries, including those in Africa and Asia.

Policy-maker engagement

IISD—together with its partners—has urged the European Commission to reconsider its approach to ECT modernization, so that the treaty undergoes the necessary reforms for achieving the bloc’s climate action objectives and those of the UN’s Paris Agreement on climate change.

  • IISD actively engages with policy-makers, civil society actors, and the wider public on legal and policy options - including the possibility of withdrawal and termination.
  • IISD and ClientEarth have held virtual discussions with EU member state officials to examine the key issues at play in the modernization negotiations.
 
 
 

Project details