A frequently overlooked barrier to climate action is the international investment treaty system. Investment treaties, through a special dispute settlement mechanism called investor-state dispute settlement (ISDS), allow foreign investors to directly sue host governments before private arbitral tribunals when governments conduct alleged breaches of the investment treaty.
With more than 2,600 investment treaties currently in force, this system gives foreign investors a powerful legal tool to challenge states’ legitimate regulatory measures when they affect investors’ profits. The investment treaty system was not designed with climate change in mind. It provides wide investment protections to fossil fuel investors whose activities must be phased out to reach global climate goals. The fossil fuel sector is the most frequent user of ISDS provisions – accounting for around 20% of all known ISDS cases worldwide – and the number of ISDS cases brought forward due to states’ climate policies has been rising.
ISDS mechanisms affect governments’ policy space to address climate change. The threat of costly ISDS claims alone can chill or delay ambitious climate policies because compensation awards can reach even billions of dollars. Hence, the IPCC, Inter-American Court of Human Rights, and UN Special rapporteurs have recognised ISDS as a “major obstacle” to urgent climate action.
What to expect from the event
This event will examine how investment treaties – ISDS provisions – hinder green investment and climate action. Panellists will discuss policy solutions and actions within the UNFCCC process to align investment governance with climate goals.
This event is co-organised by E3G, Center for International Environmental Law (CIEL), CAN Europe, Global Justice Now, War on want.
The event is hosted by the Regional Climate Foundations Pavillion through official partner the European Climate Foundation.
Confirmed speakers
- Laurence Tubiana, CEO, European Climate Foundation
- Elisa Morgera, UN Special Rapporteur on Human Rights and Climate Change
- Nikki Reisch, Director, Climate and Energy Program, Center for International Environmental Law (CIEL)
- Anne Hammill, Associate Vice-President, International Institute for Sustainable Development (IISD)
- Rob Moore, Associate Director, Public Banks and Development, E3G (moderator)
We expect to welcome 1–2 senior government representatives, to be confirmed.
