Oireachtas Joint and Select Committees

Tuesday, 28 September 2021

Joint Oireachtas Committee on Climate Action

Energy Charter Treaty, Energy Security, Liquefied Natural Gas and Data Centres: Discussion

Dr. Kyla Tienhaara:

I thank the Deputy for his questions. I will focus mainly on the ISDS part because that is my area of expertise but I will say that it is widely accepted that gas is not the bridging fuel it has been claimed to be. Depending on the source of the gas, it can actually be worse for climate outcomes than coal. If it is fracked, large amounts of methane can be leaked. I would say that it really depends on what the focus is. If one is focusing on economic growth and not worrying about demand for energy, one will probably keep replying on gas. I applaud the comments about also trying to think about ways to decrease demand on the grid, especially if there are things that are not essential for a just transition, such as data centres. That is not my area of expertise but I wanted to say that I agree with some of the comments that have been made about trying to reduce demand in addition to greening supply.

The Deputy asked about the number of successful cases. Most of the climate cases are very new. Some of the ones that are relevant have been going on for a very long time but still have not finished. There is a case in Quebec where Canada was sued for a ban on gas fracking. That case has been going on for a decade. There are some particular reasons it has taken so long but these cases just do take a long time. I cannot point the committee to the success rates for fossil fuel companies on climate-specific cases. There is widespread use of ISDS for a variety of different issues of public interest and there are high success rates generally for investors. It is also important to note that states can only not lose; they cannot win. These cases are only brought by investors. The system is unbalanced so, on the whole, it only benefits the investors. No benefits come out of the process for states, in actual fact. The original premise was that it would help countries to attract investment but that has been debunked in the literature. Of course, for countries such as Ireland that have excellent court systems, there is no need for ISDS to exist.

The Deputy made comments about the supersession of Irish law. There have been interesting developments recently with the Energy Charter Treaty, in particular. The European Court of Justice ruled that intra-EU disputes, that is, cases brought by European investors against European states, are not legal under European rules. The problem is that the decision about intra-European disputes was made a few years ago and arbitrators have been generally ignoring the ruling. There is already discussion about how they can get around the judgment by having the seat of arbitration outside the EU. That means the award could be enforced against Ireland in a court outside Ireland. Where the seat of arbitration is outside the EU, an investor could go to the court and ask it to seize the assets that Ireland has in the country in order to pay a reward. It is great that Ireland has made a strong statement that Irish jurisdiction supersedes these arbitration panels, but that is not accepted by those panels so Ireland is not going to be able to completely avoid any repercussions from these types of disputes.

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