We climate and social justice activists are currently doing everything we can to try to prevent governments from handing massive bail-out cash to polluting industries. As Europe attempts to re-start the economy after the coronavirus crisis, with governments and the EU institutions committing to inject huge sums of public recovery money, there is a historic opportunity to build back better and create a just transition to the clean energy future we need.

But we know many big polluting businesses like carmakers and airlines want nothing more than to preserve business-as-usual – which will guarantee a deeper climate emergency. Unfortunately, despite some green rhetoric from governments, big business has so far been quite successful at winning handouts with few strings attached. 

When it comes to the energy sector (the most climate-damaging of all), one powerful tool polluting energy companies have to preserve business-as-usual is a little-known trade deal, called the Energy Charter Treaty. And it’s increasingly proving to be an obstacle to climate action.

A preposterous treaty helps big polluters maintain profits from burning oil, coal and gas

It’s the biggest climate action killer nobody has ever heard of. The Energy Charter Treaty is a trade deal from the 1990s that gives rights and guarantees to investors in the energy sector. In practice, it mainly serves fossil fuels.

The main feature of this obscure trade pact is the possibility it offers to energy companies to sue governments before private, business-friendly courts. Concretely, energy corporations can use the deal to attack government policies that might negatively impact their profits. Policies like phasing out dirty energy or shutting fossil fuel plants.

If the corporations win the case, states must pay them up to several billions of euros of public money in compensation. Even if this conflicts with the need to take action on the climate crisis.

Read the full article here.