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A paradise for polluters. How investor rights in EU trade agreements sabotage the fight for the energy transition

A paradise for polluters. How investor rights in EU trade agreements sabotage the fight for the energy transition

By Association Internationale de Techniciens, Experts et Chercheurs (AITEC), Corporate Europe Observatory (CEO), PowerShift, Transnational Institute

Avoiding catastrophic climate change is the defining challenge of our time. If we are to have the chance to prevent extremely dangerous levels of global warming from being reached, most of the world's fossil fuels - oil, coal and gas - must be left underground, unexploited. Societies must move towards an energy system based on renewable sources such as sun, wind and water.

This huge change will require strong action on the part of public authorities. But their ability to enact the necessary laws and regulations is severely limited by a very little known but very powerful legal system. In recent decades, this international investment regime has trapped many countries in its legal webs.

Thousands of trade and investment agreements signed between countries allow multinational companies to sue governments if they consider that the regulatory changes adopted by public authorities reduce their profits, even if they are rules to protect the environment or to combat change. climate. At the end of 2014, there were 608 claims of this type, filed by investors against States, before international courts. The burden of these demands falls heavily on governments, whether in the form of astronomical legal costs or undermining social and environmental standards.

There are more and more investor-State lawsuits that are filed against government measures in the energy sector, ranging from the gradual elimination of nuclear energy to moratoriums on risky operations for the environment, such as the exploitation of shale gas ('fracking'). Since law firms make money every time an investor sues a state, this encourages more and more corporate lawsuits; for example, on legislation in the renewable energy sector.

Despite the obvious risk this poses to the energy transition, other trade and investment agreements are still being negotiated that would allow large companies to block determined action by governments on climate change. These include the Transatlantic Trade and Investment Partnership (better known as TTIP), currently being negotiated by the EU and the United States, and the Global Economic and Trade Agreement (CETA) between the EU and Canada, whose ratification process could start in 2016.

Yet even though the big polluters are pushing hard for these deals, a growing movement is tackling this power grab by big business. Indeed, today there is greater public scrutiny and debate on trade and investment agreements than was customary in recent years.

- Published by Association Internationale de Techniciens, Experts et Chercheurs (AITEC), Corporate Europe Observatory (CEO), PowerShift and Transnational Institute

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