How Does the Energy Charter Treaty Impede National and Global Efforts to Mitigate and Adapt to Climate Change?

Meining Song

doi:10.54254/2753-7048/2025.LD29672

Lecture Notes in Education Psychology and Public MediaOpen access

How Does the Energy Charter Treaty Impede National and Global Efforts to Mitigate and Adapt to Climate Change?

Research Article

Open Access

How Does the Energy Charter Treaty Impede National and Global Efforts to Mitigate and Adapt to Climate Change?

Meining Song ^1*

¹ University of International Business and Economics

^*Corresponding author: 202309051@uibe.edu.cn

Published on 19 November 2025

LNEP Vol.119

ISSN (Print): 2753-7056

ISSN (Online): 2753-7048

ISBN (Print): 978-1-80590-545-5

ISBN (Online): 978-1-80590-546-2

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Abstract

This paper examines the structural conflicts between the Energy Charter Treaty (ECT) and global climate governance objectives, particularly in light of the Paris Agreement. It argues that the ECT’s strong investor protection provisions—such as Fair and Equitable Treatment (FET), protection against indirect expropriation, and the Investor-State Dispute Settlement (ISDS) mechanism—create a “regulatory chill” that discourages states from adopting ambitious climate policies. Through a qualitative case study of Rockhopper v. Italy, this work demonstrates how the ECT undermines national climate legislation and limits the regulatory space of host states. The analysis reveals that the treaty’s pro-investor bias prioritizes fossil fuel interests over environmental goals, thereby hindering the alignment of international investment law with climate action. In response, this paper proposes several reforms, including coordinated withdrawal from the ECT, the incorporation of climate exception clauses in bilateral investment treaties, and enhanced interpretative cooperation among contracting parties. These recommendations aim to reconcile investment protection with climate obligations, ensuring that international investment law supports rather than obstructs the global transition to a low-carbon economy.

Keywords:

Energy Charter Treaty, climate policy, Investor-State Dispute Settlement, regulatory chill, international investment law

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References

[1]. Wei, Shen. 2022. "Does SCO need its own energy charter treaty? From the perspective of Chinese BITs" Journal of World Energy Law & Business 16 (1): 45–64.

[2]. Huang, PeiYu. 2023. The Reform of the Investment Provisions in the Energy Charter Treaty in the Face of Climate Change. Master's thesis, National Chung Cheng University.

[3]. United Nations Conference on Trade and Development. 2022. The Energy Charter Treaty: Development Implications. UNCTAD/DIAE/PCB/2022/1. Geneva: United Nations.

[4]. Poulsen, Lauge N. Skovgaard. 2022. "Investment Treaties and the Political Backing of Foreign Investors." In The Political Economy of the Investment Treaty Regime, edited by Jonathan Bonnitcha and Lauge N. Skovgaard Poulsen, 107–35. Oxford: Oxford University Press.

[5]. Umweltbundesamt (German Federal Environment Agency). 2023. The Energy Charter Treaty in the Context of Climate Protection. DessauRoßlau: Umweltbundesamt.

[6]. Rockhopper Exploration plc v. Italian Republic, ICSID Case No. ARB/17/14

[7]. Vattenfall AB and others v. Federal Republic of Germany, ICSID Case No. ARB/12/12

References

[1]. Wei, Shen. 2022. "Does SCO need its own energy charter treaty? From the perspective of Chinese BITs" Journal of World Energy Law & Business 16 (1): 45–64.

[2]. Huang, PeiYu. 2023. The Reform of the Investment Provisions in the Energy Charter Treaty in the Face of Climate Change. Master's thesis, National Chung Cheng University.

[3]. United Nations Conference on Trade and Development. 2022. The Energy Charter Treaty: Development Implications. UNCTAD/DIAE/PCB/2022/1. Geneva: United Nations.

[5]. Umweltbundesamt (German Federal Environment Agency). 2023. The Energy Charter Treaty in the Context of Climate Protection. DessauRoßlau: Umweltbundesamt.

[6]. Rockhopper Exploration plc v. Italian Republic, ICSID Case No. ARB/17/14

[7]. Vattenfall AB and others v. Federal Republic of Germany, ICSID Case No. ARB/12/12

Cite this article

Song,M. (2025). How Does the Energy Charter Treaty Impede National and Global Efforts to Mitigate and Adapt to Climate Change?. Lecture Notes in Education Psychology and Public Media,119,33-39.

Data availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

About volume

Volume title: Proceedings of ICILLP 2025 Symposium: Property Law and Blockchain Applications in International Law and Legal Policy

ISBN: 978-1-80590-545-5(Print) / 978-1-80590-546-2(Online)

Editor: Renuka Thakore

Conference website: https://2025.icillp.org/London.html

Conference date: 19 November 2025

Series: Lecture Notes in Education Psychology and Public Media

Volume number: Vol.119

ISSN: 2753-7048(Print) / 2753-7056(Online)

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