Some context first of all, if I may: I have long said (and long before I entered politics) that climate change is one of the three most serious challenges that our world faces. In my view it should be considered in the same bracket as terrorism and antibiotic resistance, such is its potential threat to the health and wellbeing of our communities here in the UK and beyond.
Sadly, this is not some future, theoretical possibility - it is a present, practical reality. The five warmest years in recorded history have been since 2010, glaciers are retreating around the world, and the Ross ice shelf in Antarctica is melting ten times faster than expected.
We can choose to dismiss these events as a coincidence – but that would mean ignoring the fact that they are taking place alongside soaring levels of carbon dioxide. Or we can listen to the overwhelming majority of climate science. The conclusions of that majority are clear: evidence of humankind’s influence on the climate is compelling and established beyond all reasonable doubt.
That's why, as Cheltenham's MP I presented a Bill to Parliament, the first MP ever to do so, to enshrine in law a commitment for the UK to be carbon-neutral by 2050. We have already reduced our emissions by around 45% on 1990 levels (the strongest emissions reduction record of any country in the G7).
Over the Bank Holiday Easter weekend last year, for example, around 80% of our energy production came from renewables. But we need to go further. Committing to net-zero carbon emissions demonstrates global leadership and sets an example to the rest of the world. Even though we are responsible for just 1% of global emissions (China is closer to 29%) we need to do the right thing.
As you will be aware, the ECT, which is the largest international agreement of its kind, continues to play an important role in promoting investment in the energy sector and fostering international cooperation on energy, including in the development of renewable energy worldwide. For the last two years, those party to the ECT have been negotiating its modernisation to ensure that it is aligned with common climate objectives. I am encouraged by the announcement, on 24 June 2022, of an agreement to this end.
It is important to note that, as of today, the UK has never faced an investor-state dispute under the ECT that has proceeded arbitration. However, the new terms of the Treaty will limit costly legal challenges from fossil fuel investors in the UK, reducing the risk to British taxpayers and ensuring the benefits of the ECT remain.
Furthermore, the modernised treaty will protect the UK Government’s sovereign right to change its own energy systems to reach emissions reductions targets in line with the Paris Agreement. It has a stronger climate focus, clarifying that states can regulate to reach emissions reductions targets, and includes new protections for green and low-carbon technologies.
The UK tabled terms which mean new investments in all types of fossil fuels lose protection under the ECT following entry into force. Existing investments in fossil fuels will lose protection under the ECT ten years after entry into force of the modernised treaty, except for existing investments in coal which would lose protection from 1 October 2024. This position includes some exceptions for abated gas, which will play a key role in the UK’s net zero transition.
I note your calls for the UK to withdraw from the ECT. At the Energy Charter Conference on 22 November, the decision to adopt the modernised Treaty was postponed. As I understand it and as you raise, the vote has been delayed because seven EU Member States (Poland, Spain, The Netherlands, France, Germany, Slovenia, and Luxembourg) have announced their intention to withdraw from the ECT and have successfully blocked the EU Council vote in favour of the modernisation.
I have been assured the Government is closely monitoring all developments in the ECT and taking these into account in its own interaction with the modernisation process.
Nevertheless, I will ensure that my ministerial colleagues at both the Department for International Trade and the Department for Energy Security and Net Zero are aware of the concerns you have raised. To note, as a Minister I am precluded from speaking in the debate on 21 March.