10 - European Green Deal, Climate Policies and the Energy Dilemma: Investment Protection versus Sustainable Investment?

Summary

While most sovereign entities have committed to greening their economies and investment under the United Nations Framework Convention on Climate Change (UNFCCC), several of them are also bound by obligations contracted under the Energy Charter Treaty (ECT), which protects investors in renewables and fossil fuel alike. Arguably, such a situation triggers a ‘regulatory clash’ that has the potential to impede the implementation of net zero carbon policies, such as the European Green Deal. This contribution contextualises the ECT within the framework of the UNFCCC and scopes the potential conflict between such regulatory regimes. Particularly, in light of the so-called ‘sunset’ clause, the contribution concludes that a suitable avenue to resolve the clash is establishing a preferential track for investment in clean energy under the ECT. On this basis, fundamental solutions are envisaged for greening investment, by applying model de lege ferenda proposals for a substantive and procedural modernisation of the ECT.