The Investment Treaty Regime and the Clean Energy Transition

Abstract

AbstractThe investment treaty regime (ITR) has been heavily criticised for the barriers it creates to domestic responses to climate change and the problem of regulatory chill. This chapter investigates these claims focussing on the Energy Charter Treaty (ECT), and comparing the differentiated impact of investor-state dispute settlement (ISDS) under the ECT for richer and poorer EU member states in response to fossil fuel phase-outs (Germany, the Netherlands and Bulgaria) and policies promoting investment in renewable energies (RE) (Spain and the Czech Republic). It acknowledges the significant barriers that ISDS can and has created to the introduction of law, regulation and policies to facilitate the energy transition, particularly in poorer states, but draws attention to the possibilities of the ITR supporting policies attempting to scale-up RE. It concludes with recommendations for reform of the ITR to enable it to support the energy transition and contribute to the global response to climate change in the small period of time in which this must occur to prevent catastrophic global temperature increases.