The government must withdraw from the Energy Charter Treaty to meet its climate obligations

The government's commitment to the ECT is yet another blatant display of its disregard for the Paris agreement and our Net Zero targets

A placard with text reading "There is no planet B"

Wera Hobhouse is the Liberal Democrats’ Climate Change and Transport Spokesperson and MP for Bath 

The Energy Charter Treaty (ECT) was set up in the 1990s to protect energy companies working in former Soviet Union countries from government expropriation. The U.K., along with 50 other countries and the EU have all been signatories. But while the Treaty may have been a step forward at its conception, now it is no more than a stumbling block in our pursuit of a sustainable future.

A succession of EU countries have announced plans to drop the Treaty because of its climate wrecking potential, with critics saying that the Treaty is being “weaponised” by fossil fuel companies. The ECT is an international agreement that establishes a multilateral framework for cross-border cooperation in the energy industry. It also allows transnational corporations who have invested in fossil fuel production and nuclear power to sue governments for loss of profit on their investments as a consequence of the transition to renewable energy.

The government’s commitment to the ECT is yet another blatant display of its disregard for the Paris agreement and our Net Zero targets. I am absolutely appalled by the ECT’s ability to undermine international commitments to phase out fossil fuels, and as the UK government considers its position, we must ask ourselves: are we willing to be a leader in the fight against climate change, or will we continue to follow in the footsteps of those who fail to prioritise the health of our planet?

It is important to remember that the best solution to a problem is sometimes just to walk away from it. That is why I have brought forward an Early Day Motion urging the UK Government to withdraw from the ECT. It has 58 signatures so far, indicating wide reaching support from MPs. We Liberal Democrats were ahead of the curve with this demand as the first major party in the UK to call for withdrawal, and we will continue to push for this until it happens. With cross-party support on my side, I am hopeful that we can make a real change. But we urgently need the government to take note.

The cards are on the table, and they are crystal clear. The Climate Change Committee (CCC) said in its most recent report: “Membership represents risks to both a timely climate transition and to the taxpayer.” The Committee said the ECT was outdated and the prospects for further reform were uncertain.

In February, over 100 academics wrote to the UK government, stating that “continued membership of the ECT will harm our prospects of limiting global warming to 1.5C because it will prolong the UK’s dependence on fossil fuels and impede the transition to renewable energy.”

The fact that The UK and Japan are the only major economies not to have committed to exiting the ECT shows the fundamental lack of leadership that is all too common to this Conservative government. We need to turn this perception around by leading the push for a new global framework to incentivise global investment in the renewable energy sector to meet global targets to reduce emissions and reach Net Zero. That is why we Liberal Democrats are calling on the government to back a replacement Renewables Treaty to drive investment in the renewable sector. If the government were serious about reducing global emissions and reaching zero targets, they would listen up.

If the risk to our ability to reach net zero wasn’t enough, the Treaty also leaves our country’s finances vulnerable to costly legal challenges from fossil fuel companies. Just look at Italy’s experience with offshore drilling restrictions – a £210mn loss that was six times the amount spent by the company on the project. The Netherlands has also been targeted for its coal phase out law, as has Slovenia for its fracking ban.

It is now high time for the UK government to follow Germany, France, and many other European countries in ditching the controversial international Treaty that MPs and campaigners say has a “chilling effect” on climate action. The ECT has no place in a world that is committed to fighting the climate crisis.

What the UK really needs to do is back a Renewables Treaty that will drive investment in the renewable sector if we are serious about reducing global emissions and reaching zero targets. It is time to withdraw from the ECT and take a stand against fossil fuel companies that are putting our planet’s future at risk.

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