Governments at the OECD have initiated the first major multilateral effort to consider climate policies for investment treaties. This responds to growing demands to take action on the climate impacts of the investment treaty regime. In its 2022 report, for instance, Working Group III of the United Nations’ Intergovernmental Panel on Climate Change (IPCC) expressed concern about the role of existing investment treaties and investor-state dispute settlement for fossil fuel regulation. As climate considerations increasingly permeate other areas of international economic governance – most notably within the world of finance, from central banks and securities regulators to export finance – climate concerns with an investment treaty regime closely associated with high-carbon investment have intensified.
Conference sessions included the latest analysis from senior climate, energy and financial policy leaders of the climate crisis, the Paris Agreement, Net Zero alignment, emissions from different sectors and other developments relevant to investment policies; identification of obstacles to Paris and Net Zero commitments for investment treaty policies and how they might be addressed; consideration of immediate action on finance flows associated with investment treaties and in particular the policy debate and proposals with regard to immediate carve-outs of coverage of fossil-fuel related investment; and complementary policies and proposals for Paris and Net Zero alignment including climate policy space and treaty implementation mechanisms, as well as the potential for greater investment treaty contributions to the energy transition and low carbon investment.
The Conference was held in person with a degree of hybrid participation. It was an important occasion for joint work on key climate policies.