These proposed changes incorporate international climate law into the treaty’s provisions, emphasizing the contracting parties’ rights and obligations under key multilateral instruments like the UN Framework Convention on Climate Change and the Paris Agreement. The amendments also underscore the contracting parties’ right to regulate in the interest of legitimate public policy objectives, including environmental protection, climate change mitigation, and adaptation.
Crucially, these changes mandate an impact assessment for new energy investment projects, which must be conducted and made public. The assessments should address the effects on population and human health, biodiversity, environment, climate, and cultural heritage. They also introduce a “flexibility mechanism,” allowing contracting states to exclude investment protection for fossil fuels in their territories.
Both the EU and the UK have expressed their intention to apply this carve-out, particularly for existing investments after 10 years from the provisions’ entry into force and for new investments made after August 15, 2023.
