"A common part of free trade agreements helps fossil fuel companies force big payouts from governments phasing out oil and gas projects. The United States narrowly avoided a $15 billion claim over the shuttered Keystone XL pipeline."
"Before the sun set on his inauguration day, Joe Biden reversed a raft of his predecessor’s deregulation policies with the stroke of a pen. Among them was an order revoking the permit for the controversial Keystone XL oil pipeline.
Canceling the project was a campaign pledge to address the climate crisis. But looming over that decision was the risk that an obscure but powerful international legal system could force the United States to pay billions of dollars to Keystone XL’s Canadian developer, TC Energy.
That system—embedded in thousands of trade and investment treaties—allows corporations to drag governments before panels of arbitrators, usually behind closed doors. Governments have been ordered to pay billions of dollars in damages to oil and mining companies for violating those treaties. While the system was intended to protect foreign investors from unfair treatment or asset seizure, many environmental advocates, lawyers and politicians say it is now being used to win awards from governments that enact new environmental regulations or raise taxes on polluting industries.
Increasingly, these critics warn the system threatens climate action by punishing governments that phase out fossil fuels."
Katie Surma and Nicholas Kusnetz report for Inside Climate News July 28, 2024.
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