At the 28th United Nations Climate Change Conference (COP 28), governments agreed to transition away from fossil fuels in a just, orderly, and equitable manner.
Some governments are implementing this decision with plans to phase out oil and gas production. One of the barriers to phase-out policies is the threat of investor–state arbitration.
This report provides policymakers with tools to mitigate the legal risks of investor–state arbitration when designing oil and gas phase-out policies.
Based on an analysis of the decisions of arbitral tribunals, this report proposes five principles for policymakers to follow: 1) no new licences, 2) manage expectations, 3) build broad authority, 4) use existing powers, and 5) be consistent.
In the global stocktake at COP 28, governments agreed to transition away from fossil fuels in a just, orderly, and equitable manner. Several governments are taking action with plans to phase out oil and gas production.
A managed phase-out is vital to achieve the goals of the Paris Agreement and smooth the transition for oil- and gas-producing economies.
