In the climate crisis context, governements must take rapid steps to dramatically lower Greenhouse Gases (GHG) emissions driving in order to limit the average warming to +1.5°C before pre-industrial levels, as committed in the Paris Agreement in 2015. This means in particular phasing out fossil fuels such as oil, coal and gas, which according to the IPCC are “the main contributor to rising CO2-concentrations levels in the atmosphere”. Importantly, the IPCC adds that the large remaining resources suggest that “that decarbonization would not be primarily driven by the exhaustion of fossil fuels, but by economics and technological and socio-political decisions”.

Whereas many countries, including members of the OECD, EU-member states and the EU itself have taken ambitious commitments to reduce GHG emissions (net reduction of 55% by 2030 in the case of the EU), there are not on track to achieve such objectives. If we are to succeed in the transition to a low-carbon economy, the entire economic system will need to be overhauled, and all policy areas will have to be reviewed and reformed according to these objectives.
The international investment policy makes no exception. Indeed, current International Investment Agreements (IAAs) bring no benefits, including when it comes to fighting climate change. To the contrary they represent a major obstacle to climate mitigation and adaptation. It is therefore necessary to terminate IIAs and stop signing new ones or, at the very least, to significantly reduce the scope of investment protection and the use of ISDS.

Background information about the OECD process :
In 2020, the OECD Investment Committee decided it would launch broader government-led consideration of the Future of Investment Treaties, with regular participation of experts and stakeholders. The work builds in part on inter-governmental evaluation and analysis of key aspects of investment treaties at the OECD since 2011.
The role of investment treaties, as well as alternative or complementary policy options, are examined with regard to three goals:

• Contributing to sustainable development by encouraging sustainable investment and preserving sufficient policy space.
• Improving or maintaining market access including in key areas such as green and health technology.
• Considering a broader and flexible range of implementation mechanisms such as state-to-state dispute
  settlement with non-pecuniary or negotiated remedies, expert reports, dispute prevention, as well as
  implementation of possible business obligations or responsibilities.

The March 2021 launch of the work programme included discussion of the possible impact of Investor State Dispute Settlement (ISDS) on the costs of the energy transition; an OECD Secretariat background paper underlined climate change and transition policies as vital policy contexts for consideration of the future of investment treaties.