How the World's Biggest Polluters are Two Trade Deals Away from Steamrolling Climate Protections

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How the World's Biggest Polluters are Two Trade Deals Away from Steamrolling Climate Protections

"45 of the 50 private corporations historically responsible for the most climate-disrupting emissions" would be emboldened to challenge climate protections

"These trade deals would empower some of the world's largest polluters... to use unaccountable tribunals to defend a model of fossil fuel dependency that spells climate crisis," said Ben Beachy of Sierra Club. (Photo:  Stephen Melkisethian/flickr/cc)

When TransCanada announced at the start of the year that it that it was demanding compensation under North American Free Trade Agreement (NAFTA) rules for the Obama administration's decision to reject the Keystone XL pipeline, many observers saw it as a sign of things to come.

Indeed, critics of two pending trade deals—the Trans-Pacific Partnership (TPP) and Transatlantic Trade and Investment Partnership (TTIP)—have already warned that other corporations could take similarly take advantage of the same mechanism to exert their power before private tribunals, demanding compensation for lost profits while supplanting democracy and trampling on workers' rights and environmental protections.

Now, a new report from the Sierra Club reveals just how many fossil fuel corporations the two deals would embolden to use these tribunals, thereby undermining U.S. commitments made under Paris climate agreement and efforts to keep fossil fuels in the ground.

Entitled "Climate Roadblocks: Looming Trade Deals Threaten Efforts to Keep Fossil Fuels in the Ground," the new report explains that the TTIP and TPP "would more than double the number of fossil fuel corporations with the power to challenge U.S policies in unaccountable ISDS tribunals," bestowing them to "100 foreign fossil fuel corporations that own more than 1,000 U.S. subsidiaries—more than the total number of fossil fuel firms that have such rights under all 56 existing U.S trade and investment pacts combined," the report states.

Described by Public Citizen as "Among the most dangerous but least known parts of today's 'trade' agreements," ISDS gives foreign corporations the right to "sue" the U.S. before a tribunal of three private lawyers for profits they say they would have earned had the climate protections not been in place.

The policies that the fossil fuel giants—who include "45 of the 50 private corporations historically responsible for the most climate-disrupting emissions"—could challenge through ISDS if the TPP and TTIP pass Congress include "restrictions on fracking, offshore drilling, federal fossil fuel leasing, and dirty pipelines. Indeed, such firms have investments in these four fossil fuel sectors across at least 36 U.S. states," the report notes.

Among the major findings as noted in the report:

  • The TPP and TTIP would more than double the number of foreign fracking firms that could use ISDS to challenge new U.S. fracking restrictions in private tribunals.
  • The TPP and TTIP would enable oil and gas corporations with more than 10 million acres' worth of U.S. offshore drilling leases to use ISDS to try to undermine new offshore drilling restrictions That is 24 times more area than that held by the much smaller number of foreign leaseholders that currently have access to ISDS.
  • One out of every three acres off the U S coastline that is covered by an active drilling lease is controlled by a fossil fuel corporation that would gain the ability under the TPP and TTIP to launch ISDS cases against new offshore drilling restrictions.
  • Foreign corporations currently own leases for oil and gas extraction on more than 1 7 million acres of U S federal lands More than 40 percent of that public land—over 720,000 acres—has been leased to oil and gas corporations that would gain the power under the TPP and TTIP to challenge new federal leasing restrictions in private tribunals.
  • The TPP and TTIP would hand ISDS rights to corporations that own tens of thousands of miles' worth of U S fossil fuel pipelines. These pipelines cross at least 29 states in nearly every region of the country: the West Coast, the Great Plains, the Midwest, the South, the Mid-Atlantic, the Northeast, and Alaska.

"These trade deals would empower some of the world's largest polluters—including those fracking on our public lands and drilling off our shores—to use unaccountable tribunals to defend a model of fossil fuel dependency that spells climate crisis," said Ben Beachy, author of the report and senior policy advisor for the Sierra Club's Responsible Trade Program. "To keep fossil fuels in the ground, we cannot afford the new roadblocks posed by the TPP and TTIP."

The report concludes: "The fight for climate progress already faces enough obstacles without the additional roadblocks imposed by the TPP and TTIP. Replacing these toxic deals with a new climate-friendly model of trade is an essential component of the growing effort to keep fossil fuels in the ground."

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