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The International Institute for Sustainable Development (IISD) argues that the modernized Energy Charter Treaty (ECT) text, released on September 12, 2022, fails to resolve critical issues regarding fossil fuel carveouts and entry timing, creating legal uncertainty for governments implementing climate measures aligned with the Paris Agreement.

The International Institute for Sustainable Development (IISD) argues that the 'agreement in principle' to modernize the Energy Charter Treaty (ECT) is insufficient for achieving international climate goals. The organization highlights that the revised treaty continues to protect fossil fuel investments and allows for investor-state dispute settlement (ISDS) claims, potentially hindering governments' ability to implement environmental measures and meet Paris Agreement objectives.

This report by the International Institute for Sustainable Development (IISD) examines the role of investment treaties and Investor-State Dispute Settlement (ISDS) mechanisms in global governance. It argues that traditional investment treaties, which prioritize investor protection, often fail to attract foreign direct investment (FDI) and instead create significant financial and legal burdens for host states, potentially hindering sustainable development and climate action.