Uncertain Climate Impact and Several Open Questions

The report analyzes the proposed modernization of the Energy Charter Treaty (ECT), concluding that the reforms are too modest to ensure the treaty does not obstruct ambitious climate mitigation. Key concerns include the continued protection of fossil fuel investments in the EU and UK for at least 10 years, the lack of flexibility for contracting parties to create fossil fuel carve-outs, and the retention of broad investment protection standards that limit states' policy space.

• The proposed modernization of the Energy Charter Treaty (ECT) does not sufficiently address the needs of the energy transition or global climate goals, as the reforms are considered too piecemeal and modest to resolve existing flaws or protect governments' ability to implement climate mitigation measures.
• In the United Kingdom and the European Union, fossil fuel investments will maintain protection for at least 10 years under the modernized ECT, which contradicts the phase-out speed necessary to limit global warming to 1.5°C.
• The leaked agreement for the modernized ECT fails to provide contracting parties with increased flexibility to implement carve-outs for fossil fuel investment protection following the Energy Charter Conference vote on November 22, 2022.
• The modernized ECT retains broad investment protection standards, such as indirect expropriation and fair and equitable treatment, while providing insufficient exceptions to protect the policy space of states.
• 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} }