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Artikel

5 Mai 2022

Autor:
Kyle Tienhaara,
Autor:
Rachel Thrasher,
Autor:
Blake Alexander Simmons,
Autor:
The Conversation

How treaties protecting fossil fuel investors could jeopardise global climate efforts

' How treaties protecting fossil fuel investors could jeopardize global efforts to save the climate – and cost countries billions', 6 May 2021

"Fossil fuel companies have access to an obscure legal tool that could jeopardize worldwide efforts to protect the climate, and they’re starting to use it. The result could cost countries that press ahead with those efforts billions of dollars.

Over the past 50 years, countries have signed thousands of treaties that protect foreign investors from government actions. These treaties are like contracts between national governments, meant to entice investors to bring in projects with the promise of local jobs and access to new technologies.

But now, as countries try to phase out fossil fuels to slow climate change, these agreements could leave the public facing overwhelming legal and financial risks.

The treaties allow investors to sue governments for compensation in a process called investor-state dispute settlement, or ISDS. In short, investors could use ISDS clauses to demand compensation in response to government actions to limit fossil fuels, such as canceling pipelines and denying drilling permits. For example, TC Energy, a Canadian company, is currently seeking more than US$15 billion over U.S. President Joe Biden’s cancellation of the Keystone XL Pipeline. In a study published May 5, 2022, in the journal Science, we estimate that countries would face up to $340 billion in legal and financial risks for canceling fossil fuel projects that are subject to treaties with ISDS clauses.

That’s more than countries worldwide put into climate adaptation and mitigation measures combined in fiscal year 2019, and it doesn’t include the risks of phasing out coal investments or canceling fossil fuel infrastructure projects, like pipelines and liquefied natural gas terminals. It means that money countries might otherwise spend to build a low-carbon future could instead go to the very industries that have knowingly been fueling climate change, severely jeopardizing countries’ capacity to propel the green energy transition forward..."