Uncertain Climate Impact and Several Open Questions

This report provides a legal assessment of the June 24, 2022, agreement in principle to reform the Energy Charter Treaty (ECT), concluding that the proposed modernization is insufficient to support global climate action goals or the energy transition.

• The proposed modernization of the Energy Charter Treaty (ECT) fails to ensure the treaty is compatible with global climate goals, as the reforms are described as too modest and piecemeal to prevent the treaty from hindering ambitious climate mitigation measures.
• In the United Kingdom and the European Union, fossil fuel investors will maintain protection for existing investments for at least 10 years under the modernized ECT, which conflicts with the phase-out speed necessary to limit global warming to 1.5°C.
• The leaked agreement for the modernized ECT does not provide contracting parties with increased flexibility to create carve-outs for fossil fuel investment protection following the Energy Charter Conference vote on November 22, 2022.
• Investment protection standards in the modernized ECT remain broad, with insufficient new exceptions or carve-outs to protect the policy space of states, specifically regarding indirect expropriation and fair and equitable treatment.
• The report identifies several unresolved issues in the modernization, including the lack of systemic reform for valuation techniques, compensation standards, and investor-state dispute settlement, as well as the retention of the original treaty's 20-year survival clause.

APA

Schaugg,, S. B. (2022). Uncertain Climate Impact and Several Open Questions. International Institute for Sustainable Development. https://www.iisd.org/publications/report/energy-charter-treaty-agreement-analysis

Chicago

Schaugg,, Sarah Brewin,Lukas. Uncertain Climate Impact and Several Open Questions. International Institute for Sustainable Development, 2022. https://www.iisd.org/publications/report/energy-charter-treaty-agreement-analysis.

Wikipedia

{{cite report |last1=Schaugg, |first1=Sarah Brewin,Lukas |title=Uncertain Climate Impact and Several Open Questions |publisher=International Institute for Sustainable Development |date=10 October 2022 |url=https://www.iisd.org/publications/report/energy-charter-treaty-agreement-analysis |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{schaugg2022uncertain, author = {Schaugg,, Sarah Brewin,Lukas}, title = {{Uncertain Climate Impact and Several Open Questions}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = oct, url = {https://www.iisd.org/publications/report/energy-charter-treaty-agreement-analysis}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }