Dr. Kyla Tienhaara:

There was a bunch of excellent questions there. The Senator is correct in what she said about the ability of Russia and Italy to exit the Energy Charter Treaty. Russia was not a full member and was, therefore, able to exit fairly quickly.

The Senator also mentioned CETA. I made a submission on CETA to a different committee. My position was that while there have been some modifications and so-called improvements to the language in CETA compared to other treaties, there are still loopholes there. The creativity of investment lawyers cannot be overestimated. There is still risk attached to CETA in that respect. It also addresses investment courts versus the investor-State ad hoctribunals. There are some improvements as to how accountable the arbitrators are and so forth but I just do not think that system fundamentally fixes the big problems with the system, particularly the fact that it is so unbalanced. It only allows investors and no one else to bring cases.

I absolutely want to comment on the Senator's broader question about developing countries. I have long been arguing that investor-State dispute settlement is the biggest problem in developing countries because they lack the capacity to respond to these types of cases and are, therefore, more likely to be chilled and to be more likely to backtrack on their proposed plans. In the early 2000s, I looked at cases in places such as Indonesia, which had plans to ban open-pit mining. It held off and reversed course because of threats it would be sued. We hope we will be able to get people in the developed world to care about cases relating to climate in the developing world because we need everyone, everywhere to be acting. Last year, I did a report with the Institute for Environment and Development in the UK where we mapped the coal plants in the world that need to be phased out in order for us to keep within the 1.5°C goal in the Paris Agreement.

It is no surprise that a large majority of them are in the global south. They are in countries such as Indonesia and other parts of Southeast Asia. Since these plants are relatively new and further behind on coal transition, there is a lot of value still in them. Therefore, there is great potential for awards if a country is going to phase out coal power in the near future, as we want. To give an example of the sort of hypocrisy associated with countries having to pay awards against them, Pakistan has had an award against it of almost $5 billion in respect of a mine that was never actually built, thus bringing up the lost future profit issue. Almost at the exact same time, Pakistan was being offered a $6 billion loan from the IMF. We are talking about the international community loaning a country a huge amount of money and then saying it actually needs to pay it all back to an investor. This is a huge contradiction within global economic governance, and it has serious implications when talking about battling climate change at global level.