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Energy companies keep right to sue states in private courts, as treaty reforms blocked

(Climate Home News, 15 Sep 2020) Negotiators have ruled out an overhaul of private courts that allow energy companies to sue national governments when climate change policies hurt their profits.

In the past year, fossil fuel companies have used the Energy Charter Treaty to sue the Slovenian government over environmental protections and challenge the Dutch government‘s coal phaseout plan.

Similar cases could cost taxpayers across the world up to €1.3 trillion ($1.5tn) by 2050, according to the Open Exp think tank, based on the value of coal, oil and gas assets protected by the treaty.

Around 42% of these costs would fall on the EU. The bloc is pushing for amendments of the treaty to support climate goals, including replacing the investor state dispute settlement (ISDS) model with something more transparent.

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Climate Home News, 15 Sep 2020: Energy companies keep right to sue states in private courts, as treaty reforms blocked