Principles of International Energy Transition Law 0198876084, 9780198876083

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Principles of International Energy Transition Law

Principles of International Energy Transition Law Law as an Instrument of Development in the 21st Century F R É D É R IC G . S OU R G E N S A N D L E O NA R D O SE M P É RT E G U I

Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Frédéric G. Sourgens and Leonardo Sempértegui 2023 The moral rights of the authors have been asserted First Edition published in 2023 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Public sector information reproduced under Open Government Licence v3.0 (http://​www.natio​nala​rchi​ves.gov.uk/​doc/​open-​gov​ernm​ent-​lice​nce/​open-​gov​ernm​ent-​lice​nce.htm) Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2023943231 ISBN 978–​0–​19–​887608–​3 DOI: 10.1093/law/​9780198876083.001.0001 Printed and bound by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work.

Contents Preface  List of Abbreviations  Summary for Policy-​makers 

xi xiii xv

PA RT I   T H E L E G A L A N D I N ST I T U T IO NA L F R A M EWO R K 1. What Is Energy Transition?  I Introduction  II The Traditional Energy Paradigm 



A The Traditional Electricity Paradigm  B The Traditional Transportation Paradigm 

III Net Zero Around Mid-​century  IV The ‘Input’ Approach  V The ‘Output’ Approach  VI A Hybrid Approach 

3 3 5 5 7

8 12 13 15

2. Why Energy Transition?  I Introduction  II The Climate Imperative  III The Role of Energy in Economic Globalization  IV Global Energy Value Chains and Globalization 

19 19 20 23 26



32



A Energy Value Chains  B The Internal Costs of Transition for Energy Value Chains  C Energy Security Implication of Energy Transition 

V Conclusion 

27 29 30

3. How Can Energy Transition Take Place?  I Introduction  II Changing Energy Inputs 

35 35 36



44



A Renewable Energy  B Nuclear Energy  C Electrification of Transportation  D Hydrogen Transportation 



A Increased Energy Efficiency  B Traditional Carbon Sinks  C Carbon Capture, Utilization, and Storage (CCUS)  D Direct Air Capture 

III Changing Greenhouse Gas Outputs and Concentrations 

36 40 42 43 45 46 47 49

vi Contents

IV Changing Climate Outcomes through Solar Radiation Management  V Conclusion 



50 51

4. Governance of Energy Transition Policies  I Introduction  II The Idea of Bottom-​up and Polycentric Governance 

53 53 54



56







A Bottom-​up Governance  B Polycentric Governance 

III State Actors 

A Formal Sovereign Equality  B Functional State Power Differentials and Energy Transition Policy-​making  C Bottom-​up Governance Networks 

IV International Organizations 

A Agenda Setting: The International Energy Agency and Global Human Rights Organizations  B Implementation: International Financial Organizations and OPEC 

54 55 56 57 58

58 59 60



V Sub-​state Actors 

61



VI The Private Sector 

63



VII Indigenous Peoples  VIII ‘Civil Society’  IX Conclusion 

67 67 69



A Provinces and Federal States  B Cities  A Private Sector Emission Management Efforts  B Lending and Investment 

62 63 64 66

5. International Law-​making and Fragmentation  I Introduction  II International Treaty Regimes  III Customary International Law  IV General Principles of Law  V Unilateral Acts  VI Conclusion: Polycentric Governance and Fragmentation 

71 71 72 76 79 80 82

6. Polycentricity, Fragmentation, and the Energy Trilemma  I Introduction  II The Energy Trilemma and Fragmentation 

85 85 86



91



A Trilemmas and Commons  B The Energy Trilemma  C Polycentric Energy Commons Governance 

III Three Legal Principles 

A Correlative Rights and Reasonable Use  B Waste 

86 88 90 93 96

Contents  vii

PA RT I I   T H E E N E R G Y T R A N SI T IO N P R I N C I P L E S 7. The Climate Principles  I Introduction  II Climate Principle 1: The Climate-​specific No Harm/​Harm Prevention Principle 

103 103



111









A The General Harm Prevention  B Applying the Harm Prevention Principle to Climate Law  C The Paris Agreement and the Glasgow Climate Pact 

III Climate Principle 2: Sovereign Choice of Means  IV Climate Principle 3 and Development Principle 1: Climate-​specific Common but Differentiated Responsibility as Cooperation 

A The General Principle of Common But Differentiated Responsibility  B The General Principles of Cooperation and Solidarity  C The Climate-​specific Principle of Common But Differentiated Responsibility in the UNFCCC  D The Fusion of Common But Differentiated Responsibility and Cooperation after the Paris Agreement  E Climate Management as Development-​based Correlative Rights 

V Climate Principle 4: Climate-​specific Impact Assessment and Monitoring  VI Climate Principle 5: Climate-​specific Precaution  A The Precautionary Principle in General International Law  B The Climate-​specific Precautionary Principle 

8. The Energy Equity Principles  I Introduction  II Energy Equity Principle 1/​Development Principle 2: The Right to Energy 







A From Decolonialization to the UN Sustainable Development Goals  B The Right to Energy in Human Rights Instruments  C Formation of Customary International Law 

III Energy Equity Principle 2: Sovereign Choice of Means of the Realization of the Right to Energy 

A The Obligation of Progressive Realization of Human Rights  B The Progressive Realization of the Right to Energy in the Context of Energy Transition 

IV Energy Equity Principle 3/​Development Principle 3: Global Cooperation on Energy Equity  V Energy Equity Principle 4/​Development Principle 4: Right to Energy-​specific Monitoring and Participation  VI Energy Equity Principle 5: The Adaptation Imperative  VII Conclusion 

9. The Energy Security Principles  I Introduction 

104 104 107 108

112 113 115 118 120 122

123 124 125 127

131 131 132 133 135 139

140

141

142

143 147 148 150

153 153

viii Contents







II Energy Security Principle 1: The Right to Energy Reliability and Resilience  A Energy Security as the Right to Energy Reliability  B Energy Security as the Right to Energy Resilience 

III Energy Security Principle 2: Energy Sovereignty and Sovereignty over Natural Resources  IV Energy Security Principle 3: Good Faith Performance of Contracts  V Energy Security Principle 4: Global Cooperation as Safeguarding Security of Supply and Security of Demand  A The Duty to Cooperate on Security of Supply  B The Duty to Cooperate on Security of Demand 

VI Energy Security Principle 5: Right to Energy-​specific Monitoring and Participation  VII Energy Security Principle 6: The Adaptation Imperative  VIII Conclusion 

10. The Environmental Sustainability Principles  I Introduction 



A The Environmental Sustainability Principles  B Additional Environmental Sustainability Principles 

II Energy Transition-​specific Sustainability Challenges: Resource Extraction  III Energy Transition-​specific Sustainability Challenges: Building a Circular Energy Economy  IV Energy Transition-​specific Sustainability Challenges: Climate Engineering  V Conclusion 

11. Community and Indigenous Rights Principles  I Introduction  II Energy Community Governance Principle 1: Non-​discrimination  III Energy Community Governance Principle 2: Environmental Protection  IV Energy Community Governance Principle 3: Minimum Labour Standards  V Community Governance Principle 4/​Development Principle 5: Participation  VI Indigenous Rights Principle 1: Consultation  VII Indigenous Rights Principle 2: Free, Prior, and Informed Consent (FPIC)  VIII Indigenous Rights Principle 3: Co-​Management  IX Indigenous Rights Principle 4: Cultural Respect  X Conclusion 

154 155 157

160 161 163 164 168

171 172 173

175 175 176 178

185 189 194 197

199 199 200 201 203 205 207 210 214 215 216

Contents  ix

12. Conflict and Convergence of Energy Transition Principles  I Introduction  II The Conflict between Energy Transition Principles 





A The Theoretical Incommensurability of Energy Transition Values  B The Impact of Incommensurability on Practical Policy Choices  C The Threat of the Political Discourse Taking Over 



A Law as Adjudication and Law as Problem Solving  B Energy Transition Governance as Problem Solving 



A Correlative Rights of Energy Transition Stakeholders  B Correlative Rights and Energy System Processes 





219 219 221 222 223 228

III The Rule of Law Demands for Balancing Energy Transition Principles 

230

IV Governing the Energy Commons: The Correlative Rights Logic for Balancing Energy Transition Principles 

236



V Conclusion 

230 235 237 241

244

PA RT I I I   I M P L E M E N T I N G T H E E N E R G Y T R A N SI T IO N P R I N C I P L E S 13. Due Diligence  I Introduction  II Due Diligence Obligations and the Energy Transition Principles 

249 249 250



III The Content of Due Diligence 

261



IV Diligent Energy Transition Decision-​making  V Conclusion 

267 270



A Climate and Environmental Law  B Human Rights Law  C Energy and Economic Law  D Theoretical Concerns 



A The Practice to Investigate  B The Practice Reasonably to Mitigate Known Risks  C The Practice to Monitor  D The Practice to Adapt 

251 253 255 257 262 264 265 266

14. Stakeholder Engagement  I Introduction  II Stakeholder Engagement and the Energy Transition Principles 

273 273 274



280



A Climate and Environmental Law  B Human Rights Law  C Energy and Economic Law  D The Relationship between Stakeholder Engagement and Due Diligence 

III The Content of the Practice of Stakeholder Engagement 



A The Practice to Consult 

275 275 276 277 280

x Contents



B The Practice to Transfer  C The Practice of Autonomy 

284 292

IV Conclusion: The Authority of Energy Transition Decision-​making 

294

15. Liability and Dispute Settlement  I Introduction  II The Role of National Courts in Energy Transition Implementation 

299 299 300



III International Fora and Energy Transition Implementation 

309



IV Conclusion: The Role of Dispute Settlement Fora 

322



A The Urgenda Approach  B The Neubauer Approach 



A Human Rights Courts and Tribunals  B International Trade and Investment Courts and Tribunals  C International Tribunal for the Law of the Sea  D The International Court of Justice 



A Policing Procedure  B Embedding Disputes in their Context  C Clarifying Standards  D Guarding against Retrogression 

References  Index 

302 305 309 312 318 320 323 323 324 325

327 353

Preface This book has been the result of many conversations about how to improve climate outcomes while also securing the developmental goals energy access undergirds and facilitates. The approach in the book has tried to avoid unnecessary ‘either/​or’ confrontations. It has instead tried to outline how decision-​making is possible that progressively achieves all the goals of energy transition rather than just some; that is, it looks to develop a means by which international law can assist policy-​makers in finding pathways to net zero emissions while also securing a world economy and a world society that more fairly distributes the benefits and burdens of energy systems and the economic globalization they fuel. We have strived to balance quick readability and in-​depth discussion in this book. We have written the book so that the reader can read each chapter or section on its own and have provided cross-​references for more in-​treatment in other parts of the book where there is overlap between chapters. We have included a summary for policy-​makers as well as ‘call-​out boxes’ in the book to summarize the core insights of the book for policy-​makers into manageable—​and quickly identifiable—​ points of reference. The call-​out boxes in the text reprise the specific points from the summary for policy-​makers in the text to increase as much as possible the ease of finding relevant materials in the book. We have done so in the hope that the book may be helpful to orient the reader and to make the book more accessible. This work has greatly benefited from a strong intellectual community that has challenged us and supported us in writing this book. Space is too limited to thank them all appropriately. We would, however, like to highlight a few people and organizations without whom this book would not have been possible. In the first place, we would like to thank Tulane University Law School, Washburn University School of Law, and the Organization of the Petroleum Exporting Countries for their support of this book. The ideas in this book benefited greatly from conversations with our colleagues, as well as the more formal engagement of ideas in this book at multiple workshops and other formal scholarly exchanges, including the OPEC Annual Legal Workshop. We thank our colleagues and our institutions for their enduring support in this effort. Secondly, this book is a continuation of the work we have done together at the Foundation of Natural Resources and Energy Law Annual Institute in 2021. We owe the Foundation a deep debt of gratitude for allowing us to preview the work of the role of the energy industry and petroleum exporting states in the energy transition. The project took on a much broader scope since our first co-​authored chapter for the Annual Institute Proceedings. Our collaboration goes back to Alex Richie’s

xii Preface and Connie Rogers’ brilliant idea to pair us up for the Institute panel. Thank you, Alex and Connie, for that chance! Thirdly, this book benefited from deep exchanges with fellow industry stakeholders at the Institute for Energy Law leadership retreats. The work we have done stands on the shoulders of thoughtful leadership across the energy industry and across oil and gas exporting states about how to drive forward the energy transition. The Institute for Energy Law was one of the early incubators of this project. We therefore would like to thank Jay Ray and Vickie Adams for their amazing work of tackling energy transition topics within the industry and helping us on our way. Fourthly, this book benefited from exchanges at international legal fora convened by the American Society of International Law and the American Branch of the International Law Association. We owe particular thanks to MJ Durkee, Myanna Dellinger, Carolina Arlota, Tibisay Morgandi, and Gudny Nielsen. We also owe a particular debt to our friends and colleagues who never avoided a phone call and were always willing to ‘bounce ideas’ with regard to this project. Here, we would like to thank particularly Owen Anderson, Teddy Baldwin, Catherine Banet, Diane Desierto, Monika Ehrman, Imad Khan, Michael Nolan, Tade Oyewunmi, and Kim Talus. Leonardo is particularly grateful for the support received from his wife, Dr Alexandra Manea, both at the personal level but, equally important, with professional advice and meaningful discussion over complex legal topics. Also, his special gratitude goes to his son, parents and sister for their significant personal support during the drafting and review process. Important support with ideas, reflections, intellectual resources, and encouragement came from HE Haitham Al Ghais, Jonathan Cahn, Katerina Drisi, Violet Onyemenam, Saamir Elsihabi, and Alice Fremuth-​Wolf. The ideas included in this book have been discussed at different events organized by the International Bar Association, SEERIL, and the AIEN. Our appreciation goes to the organization and their senior leadership. The views expressed in this text are solely those of the authors and do not represent the opinions or perspectives of the institution where they are employed or to which they are affiliated. Frédéric G. Sourgens, New Orleans Leonardo Sempértegui, Vienna

List of Abbreviations AJCL AJIL BUILJ CCUS CSIS CUP CJIL CJTL Colo. JIEL&P CoUP Convention on the   Right to Development   (Draft 1) Convention on the   Right to Development (Draft 2) Copenhagen Accord

AC D ECT EE EJIL ELJ FJIL FPIC GeoLJ (Online) HELR HLR HUP IAEA ICLQ ICCPR ICESCR I EA ILO ILS

American Journal of Comparative Law American Journal of International Law Boston University International Law Journal Carbon capture utilization and storage Center for Strategic & International Studies Cambridge University Press Chicago Journal of International Law Columbia Journal of Transnational Law Colorado Journal of International Environmental Law & Policy Columbia University Press UN First Draft Convention on the Right to Development with commentaries (January 2020) UN Doc A/​HRC/​WG.2.21. 2/Add.1 UN Draft Convention on the Right to Development with commentaries (6 April 2022) UN Doc A/​HRC/​WG/​2/​23/​2 Report of the Conference of the Parties on its Fifteenth Session, held in Copenhagen from 7 to 19 December 2009 (30 March 2010) FCCC/​CP/​2009/​11/​Add.1 direct air capture Energy Charter Treaty Edward Elgar Publishing European Journal of International Law Energy Law Journal Fordham International Law Journal free, prior, and informed consent Georgetown Law Journal Online Harvard Environmental Law Review Harvard Law Review Harvard University Press International Atomic Energy Agency International & Comparative Law Quarterly International Covenant on Civil and Political Rights International Covenant on Economic, Social and Cultural Rights International Energy Agency International Labour Organization International Law Studies

xiv  List of Abbreviations I MF IPCC IRENA Kyoto Protocol LJ LR OUP MCB MJIL MLR NIEO NRDC NREL NYU JILP Paris Agreement PJIL PUP RMMLF/​FNREL SAI SRM SUP ULR UNFCCC USDA USDE USEIA USEPA USTR VJIL VLR VLR WEJ WILJ WTO YJIL YLJ YLJF YUP

International Monetary Fund Intergovernmental Panel on Climate Change International Renewable Energy Agency Kyoto Protocol to the United Nations Framework Convention on Climate Change Law Journal Law Review Oxford University Press marine cloud brightening Michigan Journal of International Law Michigan Law Review New International Economic Order Natural Resources Defence Council US National Renewable Energy Laboratory NYU Journal of International Law and Politics Decision 1/​CP.21, ‘Adoption of the Paris Agreement’ (29 January 2016) FCCC/​CP/​2015/​10/​Add.1 University of Pennsylvania Journal of International Law Princeton University Press Rocky Mountain Mineral Law Foundation stratospheric aerosol injection solar radiation management Stanford University Press Uniform Law Review United Nations Framework Convention on Climate Change US Department of Agriculture US Department of Energy US Energy Intelligence Agency US Environmental Protection Agency US Trade Representative Virginia Journal of International Law Vanderbilt Law Review Virginia Law Review Water & Environment Journal Wisconsin International Law Journal World Trade Organization Yale Journal of International Law Yale Law Journal Yale Law Journal Forum Yale University Press

Summary for Policy-​makers 1 Introduction Energy transition is an absolute imperative. It will transform existing energy systems. With them, the transition will change global, regional, national, and local economic paths, social networks, and cultural meanings that have grown around energy systems in their specific contexts. Energy systems combine different energy value chains. These chains link and transform energy resources into usable power from raw materials through refinement, transportation, generation, and distribution processes. The functioning of current energy systems and energy value chains is a critical cause of climate change, which significantly impairs and will further harm human rights outcomes in large areas of the world, particularly in the Global South. Energy transition is imperative to avoid the catastrophic consequences of climate change if world average temperatures increase well above 1.5oC above pre-​ industrial levels. Transition pathways must achieve this objective in a manner that does not unjustly distribute the burdens of the energy transition on already marginalized communities and persons. This objective is complicated because different energy transition approaches result in different global dislocations of existing energy value chains and the creation of alternative global value chains and yet other places. These dislocations also impact energy security and do so because different energy value chains vary in how they affect the reliability and resilience of energy systems depending on geographical location. Addressing such dislocations is critical for a successful energy transition because the global economy and economic globalization depend wholly on energy-​intensive, global supply chains. To benefit from the efficiencies created by local competitive advantages in global trade, global supply chains are of necessity long. Such long global supply chains are energy intensive because they need to transport raw materials, components, and finished products. Similarly, the production of materials, components, and finished products is energy-​ intensive. The same is true for the operation of communications networks that serve as the backbone of international services industries. Consequently, global economic activity is energy driven when one considers the global economy as a whole.

xvi  Summary for Policy-makers

2  Main Proposition: A Rule of Law-​based Energy Transition with a Focus on Development Energy transition can only be successful if it follows a hybrid approach. The Glasgow Climate Pact acknowledged that energy systems must reach net zero CO2 emissions around mid-​century to meet a 1.5oC warming goal. At that UNFCCC meeting, some climate negotiators proposed an energy transition paradigm that exclusively focused on climate change inputs by completely replacing fossil fuels in global energy systems with renewable and nuclear energy generation, as well as the electrification of transportation. This position was rejected in favour of a hybrid approach that draws on different policy pathways to alter energy generation and consumption, as well as to engineer solutions for removing greenhouse gas emissions. The rejection of an input model was driven by the concern that an input-​only approach would impose untenable burdens, particularly on developing states. The Glasgow negotiations agreed that any transition to net zero must be just. This means that the transition must protect those most vulnerable to climate change’s effects and those most vulnerable to the impact of energy transition policies. Protecting both classes of people is possible only through global cooperation that deploys the maximum of globally available resources. How energy transition proceeds in such a hybrid context are highly context-​depend and is guided in the first instance by domestic policy processes. Energy transition must proceed under a regime of a global application of the rule of law to safeguard the right to development of all peoples and human beings in world society. Energy transition creates incentives for geo-​political rivalry. This rivalry has the potential to be deeply destructive, particularly for developing states. The rule of law is a means to achieve global energy transition outcomes cooperatively in a manner that respects, protects, and fulfils the right to development of all members of world society. Explaining how the law is a central instrument for development through a cooperative approach to the energy transition is the objective of this book.

3  Governance and the Energy Trilemma A rule of law-​based approach to energy transition involves multiple actors coordinating energy transition efforts in bottom-​up governance networks. These actors include states, sub-​state authorities, municipalities, international organizations, and the private sector. The conduct of each of these actors significantly impacts transition trajectories, meaning that an effective rule of law approach must coordinate each of their respective positions in a coherent bottom-​up, networked polycentric governance approach.

Summary for Policy-makers  xvii Problematically, energy transition must meet the demands of different legal regimes in potential tension with each other. The expert-​led nature of contemporary international treaty negotiations has increased the specialization of international treaty regimes themselves. This specialization can create conflicts between these legal regimes. The cross-​cutting nature of energy transition gives rise to a context where such conflicts are likely to occur. The principal international legal areas involved are international climate law, international human rights law, international trade law, international investment law, international indigenous rights, and the law of the sea. The potential conflict between different international legal regimes can be explained by reference to an energy trilemma. Energy systems must provide access to energy at the lowest possible cost on a fair and non-​discriminatory basis to foster human and economic development. Energy systems and value chains must deliver such energy access reliably and resiliently when and where energy is needed. Finally, energy policy must account for the environmental and climate sustainability of energy systems and energy value chains viewed as a whole. It is facially impossible to maximize these three values underpinning the trilemma (equity, security, sustainability) at the same time because, at some point, increasing the achievement of outcomes consistent with one value leads to the reduction of another. Recognizing that this situation is not being pessimistic but rather objective and realistic will allow policy-​makers and regulators to navigate this inevitable tension. While very complicated to solve definitively, the energy trilemma nevertheless can be effectively tackled, through a holistic balancing of the equity, security, and sustainability objectives against each other, instead of pursuing perfection of any one at the cost of the others. That exercise requires a polycentric, context-​sensitive commons governance lens, ie a context-​driven, development-​focused coordination of overlapping decision-​making processes affecting energy systems and energy value chains involving all actors drafting and implementing energy transition policies and norms.

4  Polycentric Commons Governance Approach: Correlative Rights and Waste A polycentric commons governance lens organizes the balancing of the energy trilemma around the principles of correlative rights and waste. A correlative-​rights relationship arises when different stakeholders hold apparently independent property rights with regard to an asset or resource, the availability and sustainability of which depend on the other stakeholders’ exercise of coexisting property rights on the same asset or resources. In such circumstances, the exercise of correlative rights requires stakeholders to reasonably use their respective rights in a manner consistent with the standards expressly or implicitly set by the community of stakeholders as a

xviii  Summary for Policy-makers whole. A failure of such an approach leads to short-​term impairment and long-​ term destruction of energy systems or value chains. Such impairment or destruction of energy systems or value chains constitutes impermissible waste because it reduces energy systems’ present or future sustainability. Energy transition is possible only if states and stakeholders cooperate towards achieving a just transition without undue regard to short-​term national advantage. Polycentric governance is possible only if different global stakeholders cooperate with each other. A geopolitically rivalrous or proto-​mercantilist approach to energy transition is highly likely to destroy energy systems, the global economy, and the social systems that depend on them. Energy transition within a correlative rights commons governance paradigm must mobilize competitive, innovation-​driven global markets and energy value chains to achieve successful global outcomes. Energy systems, value chains, and the outcomes they support are integrated into a broader global market, which can provide the capital needed to make the multiple hundred trillion in investments required to support energy transition efforts. It can further fuel the engineering innovation needed to support current energy transition approaches. To support such innovation-​driven markets, states must help to create, support, and regulate energy transition markets to allow for maximum, market-​based competition at the innovation frontier.

5  Energy Transition Legal Principles To be successful, a rule of law-​based energy transition must take into account five sets of distinct legal energy transition principles: (a) climate principles; (b) energy equity principles; (c) energy security principles; (d) environmental sustainability principles; and (e) community governance and indigenous rights principles. The common thread binding these principles together is the right to development. The principles and a summary of their content are listed below.

5.1  Climate Principles Energy transition governance must fulfil five climate principles: (1) States must prevent climate harm. States must act diligently to prevent global temperature increases over well-​ below 2oC above pre-​industrial levels. States must consider their fair global share of emissions by reference to historical contributions.

Summary for Policy-makers  xix (2) Each state has a free choice of means of progressive emissions reductions consistent with the principle of sovereign energy equality. States must transparently communicate their choice in their respective NDCs. While choosing the means, states must consider economic development, history, and economic diversification efforts. (3) All states have a common responsibility to prevent climate change by acting individually and collectively to meet global average warming targets. States have a differentiated responsibility to cooperate with each other to contribute to the effort to transition global energy systems and value chains to net zero emissions taking into account their historical role, technical and financial capabilities, and development needs. States fulfil their obligation to cooperate by means of providing financial support, technology transfer, and fair access to international trade and investment sufficient to permit states to diversify their respective economies consistent with their sovereign choice of means and to participate fairly in the economic, social, and cultural benefits and burdens of a post-​transition economic order. (4) States must implement climate-​specific impact assessment and monitoring tools, as set out in the Paris Agreement and related agreements. States and non-​state actors must use these assessments and monitoring tools as part of their due diligence processes to implement the energy transition principles. (5) States and non-​state stakeholders must act with precaution in devising and implementing energy transition approaches. Precaution requires stakeholders not to take the lack of scientific certainty as a reason for inaction. To act with precaution, stakeholders must act based on the presumption that the worst-​case scenario developed in nascent best scientific research will be validated by future research.

5.2  Energy Equity Principles Energy transition governance must fulfil five global energy equity principles. (1) Peoples, communities, and persons have a right to affordable energy access at a price that fairly distributes the benefits and burdens of such energy access.

xx  Summary for Policy-makers States and energy transition stakeholders are obligated individually and collectively to respect, protect, and fulfil the right to energy. All stakeholders have an obligation progressively to realize the right to energy to the maximum of available resources consistent with the right to development. (2) States must progressively realize the right to energy alongside the progressive realization of other relevant human rights to the maximum available resources. States may determine their own energy transition pathways consistent with the principle of sovereign energy equality in a non-​discriminatory manner in light of their specific contexts and the specific impacts of policy pathways on the progressive realization of rights. (3) States and other stakeholders must cooperate to fulfil the right to energy to the maximum globally available resources. This means that all relevant stakeholders must adopt policies and measures to ensure the technology transfer necessary to support the right to energy in states with severely limited energy access to permit fair access to a global economic marketplace for all states, peoples, and communities. Stakeholders must support the installation of energy systems and energy value chains needed to support a globally fair distribution of energy transition benefits and burdens through adequate finance, financial support, and investment. (4) Stakeholders must monitor and transparently communicate regarding their fulfilment of the right to energy. Affected persons have a right to free, active, and meaningful participation in decision-​making implementing the right to energy, particularly in the energy transition context. (5) Stakeholders must fairly support the adaptation of energy systems and energy value chains to meet the demands created by the effects of climate change. This should happen in a manner that proportionately distributes access to energy opportunities and access to energy-​intensive adaptation methods. Stakeholders must cooperate globally to ensure that states, peoples, and communities vulnerable to the effects of climate change have all the necessary resources to install and operate energy systems needed to support local adaptation efforts, including but not limited to providing finance, financial support, and investment.

Summary for Policy-makers  xxi

5.3  Energy Security Principles Energy transition governance must fulfil six energy security principles. (1) Peoples, communities, and persons have a right to reliable and resilient energy access. States must take continuity of service into account when exercising their sovereign choice of means in choosing an appropriate energy mix for their respective contexts. Stakeholders should create sufficient redundancy in the energy mix to increase the resilience of local energy systems. Modifying energy systems or energy value chains for reasons beyond the implementation of the energy transition is presumptively inconsistent with the obligation to respect the right to energy. (2) An international intervention to alter another state’s energy policy is presumptively an impermissible impairment of the principles of sovereign equality and sovereignty over natural resources. (3) States and stakeholders must perform their agreements and contracts constitutive of energy value chains and energy systems in good faith. (4) States must cooperate to ensure a stable long-​term supply of energy value chain inputs sufficient to meet global energy demands. This includes concluding agreements promoting access of energy value chain inputs to international markets on commercial terms and a competitive market basis; protecting investments in the energy value chain components and energy systems in keeping with the international legal principles applicable to such investments; and refraining from imposing primary or secondary sanctions targeting energy value chain inputs or energy systems in violation of international law. In deciding whether or how to alter market access for the energy value chain inputs, components, or energy systems, states must consider the human rights impacts of any such policies on stakeholders in third states relying on the respective energy value chains, so as not to impair the global fulfilment of the right to energy (5) Stakeholders must monitor and transparently communicate regarding their fulfilment of the right to energy, as their actions impact the reliability and resilience of energy value chains and energy systems. Affected persons have a right to free, active, and meaningful participation in decision-​making altering the reliability or resilience of energy value chains and energy systems, particularly in the context of the energy transition.

xxii  Summary for Policy-makers (6) Stakeholders must consider the reliability and resilience of energy systems and energy value chains when making policy decisions about their adaptation. Demands of adapting to the effects of climate change should be met in a manner that fairly distributes access to energy and access to energy-​intensive adaptation methods. Stakeholders must cooperate globally to ensure that states, peoples, and communities vulnerable to the effects of climate change have all the necessary resources to safeguard the reliability and resilience of energy value chains and energy systems, including but not limited to, by providing finance, financial support, and investments.

5.4  Environmental Sustainability Principles Energy transition governance must fulfil eight environmental sustainability principles, out of which five energy transition principles developed in the context of international environmental law addressing climate change apply mutatis mutandis to environmental protection more broadly. Thereafter: (1) States must allow for meaningful stakeholder participation in decision-​ making that poses a significant risk of severe environmental harm. (2) States and stakeholders must take into account the impacts on the bio-​diversity of proposed policies, projects, energy value chain inputs, and energy systems. (3) States must adopt energy policies, energy value chain inputs, and energy systems that preserve and protect the maritime environment. States must take appropriate measures to prevent, reduce, and control marine environment pollution from any source. States on the territory of which resource extraction or refinement occur have primary jurisdiction concerning the environmental management of the relevant segment of the energy value chain. Other stakeholders have residual responsibility to prevent pollution to account for potential transboundary harm arising from the energy value chain. Further, states should endeavour to build circular energy economies that prevent waste by recycling fuel by-​products (eg CO2) and critical energy system components (eg batteries) in future energy developments. Circular energy economies depend upon planning at the earliest feasible policy or project stage. Decision-​making to create circular energy economies must incorporate participatory frameworks to include stakeholder comments at the earliest time possible. States must cooperate with each other as well as with all relevant energy value chain stakeholders to formulate integrated solutions to promote circular approaches irrespective of energy source or fuel.

Summary for Policy-makers  xxiii

5.5  Community Governance and Indigenous Rights Principles Energy transition governance must include stakeholders and indigenous peoples in decision-​making consistent with eight governance principles. (1) States and stakeholders in energy projects, energy value chain inputs, or energy systems must not discriminate with regard to decisions relating to energy projects, energy systems, or energy value chain inputs. Discrimination cannot take place directly or indirectly on any ground, such as race, color, sex, language, religion, political, or other opinion, national or social origin, property, birth, or other reason, in matters related to decisions on how to distribute benefits and burdens arising out of or relating to energy projects, energy systems or energy value chain inputs. (2) States and stakeholders must protect the environment in a way consistent with the host state’s law to the energy project, energy value chain input, or energy system, and to international best practices in the energy and extractive resources industries. States and stakeholders may enter into such agreements on environmental protection standards governing energy projects, energy value chain inputs, or energy systems, as well as cost-​sharing mechanisms with regard to such standards, within limits permitted by international law. (3) States must safeguard, and stakeholders in energy projects, energy value chain inputs, or energy systems must provide at least (a) minimum labour standards, including fair wages to support a decent living; (b) safe and healthy work conditions; (c) an equal opportunity for promotion; and (d) rest, leisure, and a reasonable limitation on working hours. (4) States and stakeholders in energy projects, energy value chain inputs, and energy systems must allow all persons affected by energy-​related activities to participate actively, freely, and meaningfully in decision-​making related to such activities. (5) States and stakeholders in energy projects, energy value chain inputs, or energy systems must consult indigenous peoples to the extent that such activities threaten to impair or affect indigenous people’s economic, social, or cultural life. States and stakeholders must consult indigenous peoples in good faith, in a manner appropriate to the indigenous people, and to achieve meaningful agreement or consent to a proposed measure.

xxiv  Summary for Policy-makers (6) States and stakeholders in energy projects, energy value chain inputs, or energy systems must obtain the free, prior, and informed consent of indigenous peoples (FPIC) when projects are situated on or significantly affect lands or waters traditionally owned or customarily used by an indigenous people. The same principle applies when projects interfere with the manifestations of the cultures of indigenous peoples, including archaeological or historical sites, artifacts, designs, ceremonies, technologies, and visual and performing arts and literature. FPIC does not provide an absolute and unqualified right to veto to an indigenous people or to a minority within an indigenous people. (7) States and stakeholders must continue to consult with indigenous peoples after the initial approval of energy activities for the life of the project, applying the other relevant Energy Transition Principles mutatis mutandis. (8) At all times, states and stakeholders in energy projects, energy value chain inputs, and energy systems must respect the culture of indigenous peoples.

6  Conflict and Convergence of the Energy Transition Principles The Energy Transition Principles potentially conflict with each other, given their respective role in the energy trilemma. Traditional conflict rules and approaches used in international legal disputes cannot resolve this potential norm conflict. Without a means to balance principles through policy-​making, the pull to favour national groups over global objectives risks undermining the demands of cooperation and solidarity central to these principles. This problem appears particularly pronounced when law (and international law) are seen only as an adjudicatory tool. However, law can also be a problem-​solving tool to assist decision-​makers in policy-​making and rule-​making. Lawyers in this mode articulate and interrogate legal principles to determine their social and political salience in the context of a specific policy problem. The complexity to which energy transition policies respond highlights why energy transition governance relies upon the law as a problem-​solving tool. An approach premised in sovereign choice of means and cooperation discussed throughout the book invites this use of law as a natural tool for improvement of policy responses, as opposed to a stark command (mainly through adjudication) to comply with a single specific ex-​ante vision of energy transition pathways. A problem-​solving approach is consistent with a correlative rights lens. A correlative rights logic explains how the bottom-​up use of legal principles in solving specific problems can lead to effective solutions by a critical mass of stakeholders

Summary for Policy-makers  xxv responding to each other’s efforts in a particular circumstance. Such bottom-​up governance is always sensitive to context, particularly to stakeholders’ relative resource base and historical circumstances. A problem-​solving approach to the Energy Transition Principles can help resolve thorny questions of how to handle coal versus nuclear or CCUS versus storage, for example, considering specific situations in which these questions may arise. These questions are taking place today and will become only more pressing in years to come. This approach may counsel for investment in CCUS particularly to protect existing economic activities in developing countries to safeguard their development while also directing leading energy technology innovation and development to those states. A problem-​solving approach would similarly support investment in energy storage to take advantage of new renewable energy generation, leaving the balance between investments to policy-​makers in specific contexts.

7  Due Diligence and Stakeholder Engagement To implement a problem-​solving approach to the Energy Transition Principles crucially requires due diligence, which is a means to fulfil most of the principles. Due diligence, as a practice of reasonable preparedness, must first strive to investigate, gather and analyse data to understand risks and interactions between risks. Secondly, diligent practice must seek to plan for and mitigate risks holistically across energy system impacts. Thirdly, it must monitor the impacts of policies and projects and compare them against risk projections. Fourthly, it must promptly adapt policy and legal responses to previously unanticipated impacts discovered during monitoring. Due diligence as a practice of reasonable preparedness at each stage must establish what Pareto optimal policy pathways are feasible maximally to realize potentially mutually inconsistent policy outcomes demanded by the Energy Transition Principles. It must provide multiple different Pareto optimal alternatives for decision to allow decision-​making to weigh different pathways against each other consistent with the exercise of a choice of sovereign means of fulfilment of the Energy Transition Principles and without unduly impairing rights currently realized by peoples, communities, and persons. Due diligence must proceed hand in hand with stakeholder engagement. Due diligence is not a data analytics function but a means to respect, protect, and fulfil the capability for human flourishing. Consequently, states and companies participating in energy value chains must identify affected groups and individuals in due diligence. States and companies participating in energy value chains have the burden of actively inducing affected persons and people to participate in decision-​making. States and companies participating in energy value chains must consider the contributions of affected persons and people in decision-​making.

xxvi  Summary for Policy-makers Environmental sustainability requires active consultation of affected groups and persons as part of its constitutive instruments. The right to energy requires active consultation of affected groups and persons in formulating energy policy. Human rights law generally requires such active stakeholder engagement as part of its constitutive instruments. Stakeholder engagement, like due diligence, is a practice aimed at securing free, meaningful, and active participation by affected peoples, communities, and persons. Stakeholder engagement begins with the consultation of affected persons. Following state-​of-​the-​art standards does not guarantee stakeholder engagement success. Successful consultations instead are based on an understanding and engagement with the local social map beyond core political and social decision-​makers. Stakeholder engagement requires that the result of consultation lead to outcomes in the form of managing policy and project impacts and transfers. In the project context, parties implement the result of consultations with project-​affected communities employing community development agreements. Community development agreements continue and formalize consultations, including through grievance mechanisms. Such agreements must look beyond paternalist contributions to enhance the social well-​being of communities through development program plans. Economic diversification must be a critical component of such community development. Energy transition policy must support economic diversification at the national and global levels, not just at the project level. Energy transition policies consequently must be supported by community development mechanisms beyond the project context. The global means to support economic diversification nevertheless can look to community development agreements as a blueprint for other types of energy transition partnerships. Consultation and transfer must ultimately support the development of autonomous capacities in all societies and economies, as energy transition policies will disrupt all societies and economies. Supporting autonomy requires capacity building developed after social mapping of all stakeholders involved to improve the ability, particularly of traditionally marginalized communities or communities newly marginalized by climate or energy transition impacts, to participate fully, freely, actively, and meaningfully in energy transition decision-​making. Autonomy requires capacity building in industrial and post-​industrial societies appropriately to take extraterritorial impacts of regulation into account. Such capacity building can be embedded in existing bottom-​up networked governance processes.

8  The Role of Traditional Legal Actors in the Energy Transition Courts and tribunals act as guardrails for an energy transition decision-​making process guided by a rule of law, problem-​solving framework. National courts have a

Summary for Policy-makers  xxvii prominent role in achieving energy transition outcomes by enforcing appropriate public law decision-​making processes regarding energy transition policy. The review of judicial decisions has determined that national courts make more or less intrusive judgments in the policy-​making space. The first type, like the Urgenda case (Netherlands), is more intrusive by setting specific emission reduction targets referencing IPCC analyses. The second type, for example, the Neubauer case (Germany), is less intrusive and refers legislation for revision by the other government branches duly qualified for policy-​making rather than setting specific emission reduction targets. The second type of decision holds legislative and executive policy-​makers accountable for following a development-​based balancing approach to energy transition policies. Less intrusive actions by national courts are more consistent with a problem-​solving, balancing approach to the many conflicting pressures imposed on societies and economies by energy transition. International decisions are similarly important support mechanisms for energy transition decision-​making. Human rights decisions and advisory opinions have been helpful in this respect. They can play a decisive role in the development of the energy transition, provided that they are balanced and comprehensive in their approach. Human rights decisions can differ in their method depending upon whether the underlying request is framed in terms of compliance with negative rights or fulfilment of positive rights. Focusing on rights fulfilment provides a strong procedural framework for development-​based energy transition policy-​making. International economic law decisions highlight the difficulties of resolving energy transition disputes, especially in the context of evolving capabilities in different countries. International trade law and investment law judgments have touched on this issue at its core. This complexity is particularly pronounced when states protected by principles of differentiated responsibility are developing their own domestic emission mitigation and energy transition programs without unreasonably impairing the rights of existing energy transition projects. However, other disputes are exemplary in reaching a narrow decision that fully credits the balancing exercise actually undertaken by governmental decision-​makers as a starting point for international legal analyses. Finally, there is a current increase in requests for advisory opinions to international tribunals (International Tribunal of the Law of the Sea, Inter-​American Court of Human Rights, and the International Court of Justice up to mid-​2023). These advisory opinions are focused on climate-​related obligations. They can helpfully clarify specific legal standards guiding energy transition so long as they take the conflicting obligations governing energy transition in their respective policy context into account. In all instances, one core challenge will be sufficiently to contextualize any opinion to maintain a maximum number of pathways open for global policy-​makers as they seek to balance the different demands placed by the energy transition policies against each other, considering the states’ equal energy sovereignty.

PART I

T HE L E GA L A ND IN STITU T IONA L F R A M EWOR K

1

What Is Energy Transition? I Introduction Climate change is one of today’s leading policy problems. Anthropogenic greenhouse gas emissions cause climate change. Electricity, heat, and transportation are leading emissions sources.1 All three are fundamentally tied to energy systems. To respond to climate change therefore requires a change in the way human energy systems work. This change is ‘energy transition’. Yet, despite the term’s ubiquity, it is not easy to unpack. Energy transition is a complex process that affects a great many areas of ordinary life. It is heavily context dependent. It is to change energy systems from a currently dominant paradigm. This paradigm is deeply enmeshed throughout economic, social, and cultural life. (The car is the ultimate symbol for this economic, social, and cultural importance of energy systems. Cars connect people to their work, their home, their schools, and their family. They are also cultural icons at the heart of much popular culture from literature to film to music.) Change is to alter something that already has created significant economic path dependencies, social networks, and cultural meaning. Any change as momentous as energy transition will have repercussions for world society. It reweaves a constitutive thread of the fabric of global economic life. It creates new global power dynamics. Most importantly, if done right, it also provides new opportunities for human growth and for equal access to world society. It is against this backdrop that this book must begin with a definition of what it means by energy transition and place the dominant approaches to energy transition in a broader policy context. Energy transition changes existing energy systems that have created context dependent and specific global, regional, national, and local economic path dependencies, social networks, and cultural meaning.   

A concrete example of energy transition is a helpful starting point. Germany and its Energiewende are emblematic of ‘energy transition’. German ecologists first



1

Global Energy Review: CO2 Emissions in 2021 (IEA 2022).

4  What Is Energy Transition? coined the term Energiewende in the 1980s as a means to advocate for increased reliance on renewable energy. Centrally, the term was part of broader efforts by Germany’s anti-​nuclear activists to end Germany’s reliance on nuclear power.2 Since those early days, Energiewende transformed from a fringe position of opponents of nuclear energy to a bipartisan creed of German energy policy, be it with a constantly shifting concrete content and meaning—​a meaning that was shaped by geo-​economic constraints as much as by social and cultural expectations. Energiewende came to policy-​ making in earnest with the passage of the Stromeinspeisungsgesetz (StrEG) or Electricity Feed in Law of 1991, supporting feed-​in tariffs for renewable energy.3 The ‘StrEG’ supported a variety of different local interests by means of feed-​in tariffs. These included chiefly small southern German hydro-​ electrical developments championed by a Bavarian conservative member of parliament.4 It also supported wind and solar development championed by the bill’s Green party cosponsor.5 The law purposefully took on traditional, powerful German utilities and was an ‘energy transition’ simply by challenging their dominance in addition to supporting different forms of energy generation.6 Energiewende then took on more concrete contours with the passage of the first Erneuerbare Ernegien Gesetz/​Renewable Energy Source Act (EEG) in 2000.7 EEG 2000 expanded the feed-​in tariff programme for renewables to meet German commitments under international climate agreements like the UNFCCC and its Kyoto Protocol.8 At the same time, it also made important political concessions to traditional coal interests: it included mine gas as one of the eligible recipients of financial support.9 Further, at this point, a significant part of the German political establishment continued to rely on nuclear power generation as a key part of its energy programme. This pro-​nuclear policy was shattered only by the Fukushima Daiichi disaster.10 At this point, Germany, led by a Dr Merkel government, relied heavily on renewables only as its leading tool for Energiewende.11 Just as importantly, the same 2 Merethe Dotterud and Inken Reimer, ‘Germany: From Fee-​in Tariffs to Greater Competition’ in Elin Lerum Boasson and others (eds), Comparative Renewables Policy: Political, Organizational and European Fields (Routledge 2012) 81, 82. 3 Germany Stromeinspeisungsgesetz (December 1990), unofficial English translation available at http://​w ww.wind-​works.org/​cms/​index.php?id=​191&tx_​ttn​e ws%5Btt_​n​e ws%5D=​1195&cHash=​ 19081​d41c​39f3​e7cb​6f70​cdf7​a9d2​682. 4 Dotterud and Reimer (n 2) 81, 82. 5 ibid. 6 ibid. 7 Gesetz für den Vorrang Eneuerbarer Energien, Bundesgesetzblatt (31 March 2000) Pt I, No 13, 8(1). 8 Michael T Hatch, ‘The Role of Renewable Energy in German Climate Change Policy’ (2010) 1 Renewable Energy and Policy Rev 141, 146. 9 Dotterud and Reimer (n 2) 81, 82–​84. 10 ibid. 11 ibid; Gesetz zur Neuregelung des Rechtsrahmens für due Förderung der Stromerzeugung aus erneuerbaren Energien, rt I No 42, Bundesgesetzblatt (4 August 2011) § 1(2).

The Traditional Energy Paradigm  5 government also expanded Russian gas imports to Germany by its continued support for the Nord Stream pipeline and the eventual expansion of these imports with the construction of Nord Stream 2.12 German reliance on (Russian) gas was necessitated by its nuclear exit (one of the avowed early goals of Energiewende advocates). Energiewende thus meant many potentially contradictory things. It meant to turn to renewable energy and to reduce greenhouse gas emissions as part of global climate change efforts. It also meant a turn away from nuclear and towards natural gas, as well as a means to throw a lifeline to the domestic coal industry. Energiewende sought to reconcile these contradictions in its own specific policy context to achieve a fair energy order that is economically, socially, and environmentally sustainable. The energy transition replicates such balancing of the traditional energy paradigm on a global basis.

II  The Traditional Energy Paradigm ‘Energy transition’ changes the traditional energy paradigm. The traditional energy paradigm is a hydrocarbons paradigm. The energy paradigm began as the age of coal. Oil successfully challenged coal as the dominant fuel for transportation in the early part of the twentieth century. Gas began to challenge coal as the dominant feedstock for electricity generation beginning in 1939. The traditional electricity paradigm remains still coal-​dominated but has seen significant inroads by gas. Consequently, it is reasonably to treat the current traditional electricity paradigm as a coal-​gas hybrid. While the weighting between the oil, coal, and gas changed and changes, the traditional energy paradigm unquestionably is a hydrocarbons paradigm.

A  The Traditional Electricity Paradigm Coal has been the predominant source of electricity for the traditional energy paradigm. Thomas Edison opened the first commercial, coal-​fired power plant at Pearl Street Station, Manhattan, New York in 1882.13 Ever since 1882, coal remained the dominant feedstock for electricity generation.14 Coal-​fired plants were particularly important for the generation of the constant minimum requirement of ‘base load’ electricity in a given market.15 12 Mathew Karnitschnig, ‘Why Merkel Chose Russia over US on Nord Stream 2’ Politico (26 July 2021) https://​www.polit​ico.eu/​arti​cle/​vladi​mir-​putin-​ger​man-​chan​cell​ors-​nord-​str​eam-​rus​sia-​ene​ rgy-​ang​ela-​mer​kel/​. 13 Daniel Yergin, The Quest, Energy, Security, and the Remaking of World Order (Penguin, 2012) 348. 14 World Energy Balances (IEA 2021). 15 Justin Falk et al., Nuclear Power’s Role in Generating Electricity (Congressional Budget Office, 2008) 2: Charles D. Ferguson, Nuclear Energy, What Everyone Needs to Know (OUP, 2011) 68.

6  What Is Energy Transition? The key competitor for coal in traditional energy markets is gas.16 The first gas-​ fired power plants opened in Neuchâtel, Switzerland in 1939.17 Since then, gas-​ fired power plants have increased in global importance. Today, a key advantage of gas-​fired power plants is that gas frequently is cheaper than coal.18 One reason that gas has become cheaper than coal is that unconventional gas reserves can now be exploited by way of hydraulic fracturing, a process that has turned the US in particular into a leading global gas producer and exporter.19 Coal and gas continue their traditional global importance for electricity generation. Thus, ‘[c]‌oal remained the dominant fuel for power generation in 2019, reaching 37% of global electricity production’ and ‘had been oscillating around 40% since the mid 2000s’.20 Gas-​fired electricity generation currently stands in third place at 24% of electricity generation behind renewables (including hydro-​power).21 The competition between coal and gas has a significant geopolitical component. Coal-​fired plants are significantly more abundant in states with access to significant coal reserves. This includes China, India, Indonesia, and South Africa.22 Meanwhile gas is a far more competitive feedstock for example in the EU and the US.23 These jurisdictions have more ready access to price competitive gas markets. 16 Oil is also a competitor but is far less important than gas. Oil is feedstock for about 3% of global electricity generation. World Energy Balances (IEA 2021). 17 Vaclav Smil, Growth, From Microorganisms to Megacities (MIT Press, 2020) 212. 18 Devarshee Saha, ‘Natural Gas Beat Coal in the US. Will Renewables and Storage Soon Beat Natural Gas?’ (8 July 2019) World Resources Institute https://​www.wri.org/​insig​hts/​natu​ral-​gas-​beat-​coal-​us-​ will-​ren​ewab​les-​and-​stor​age-​soon-​beat-​natu​ral-​gas. The problem is that gas is comparatively difficult to transport other than by pipeline, meaning that there are considerable price variations for gas. Further, gas prices themselves are somewhat more volatile than coal prices. This means that the cost comparison between coal and gas is a question of finding appropriate comparators. This is reflected in the ranges of levelized unsubsidized energy costs produced by Lazard which shows gas and coal with overlapping production costs per MWh but with gas having a lower entry point for the range. See ‘Levelized Cost of Energy, Levelized Cost of Storage, and Levelized Cost of Hydrogen 2021’ (28 October 2021) Lazard https://​www.laz​ard.com/​pers​pect​ive/​leveli​zed-​cost-​of-​ene​rgy-​leveli​zed-​cost-​of-​stor​age-​ and-​leveli​zed-​cost-​of-​hydro​gen/​. 19 Fred Dews, ‘The Economic Benefits of Fracking’ (23 March 2015) Brookings Institute https://​ www.brooki​ngs.edu/​blog/​brooki​ngs-​now/​2015/​03/​23/​the-​econo​mic-​benef​i ts-​of-​frack​ing/​; Marwa Rashad, ‘U.S. LNG exporters emerge as big winners of Europe natgas crisis’ (9 March 2022) Reuters https://​www.reut​ers.com/​busin​ess/​ene​rgy/​us-​lng-​export​ers-​eme​rge-​big-​winn​ers-​eur​ope-​nat​gas-​cri​ sis-​2022-​03-​09/​(last visited 3 March 2023); For a summary of global unconventional gas markets see ‘World Energy Resources, Unconventional Gas, a Global Phenomenon’ (2016) World Energy Council https://​www.worl​dene​rgy.org/​ass​ets/​downlo​ads/​Unc​onve​ntio​nal-​gas-​a-​glo​bal-​phe​nome​non-​World-​ Ene​rgy-​Res​ourc​es_​-​Full-​rep​ort-​.pdf.. 20 World Energy Balances (2021). 21 ibid. 22 ‘Country Profile: China’ (2019) IEA https://​www.iea.org/​countr​ies/​china; Statistical Review of World Energy: 2021, Indonesia’s Energy Market (2021) BP https://​www.bp.com/​cont​ent/​dam/​bp/​busin​ ess-​sites/​en/​glo​bal/​corpor​ate/​pdfs/​ene​rgy-​econom​ics/​stat​isti​cal-​rev​iew/​bp-​stats-​rev​iew-​2021-​indone​ sia-​insig​hts.pdf; Keneilwe Ratshomo and Ramaano Nembahe, ‘South Africa Energy Sector Report 2019’ (2019) South African Department of Energy http://​www.ene​rgy.gov.za/​files/​media/​explai​ned/​ 2019-​South-​Afri​can-​Ene​rgy-​Sec​tor-​Rep​ort.pdf. 23 Nikos Tsafos, ‘The Complex Relationship Between Coal and Gas in Europe’ (13 February 2020) Center for Strategic & International Studies https://​www.csis.org/​blogs/​ene​rgy-​headli​nes-​ver​sus-​tre​ ndli​nes/​comp​lex-​relat​ions​hip-​betw​een-​coal-​and-​gas-​eur​ope; ‘Short-​Term Energy Outlook’ (7 June

The Traditional Energy Paradigm  7 Such supply security factors lead to some interesting divergences in energy mix between countries that compete with each for market share in industries such as textiles. For instance, on the one hand, Bangladesh recently had ready access to gas through domestic supply.24 Its energy mix therefore relies upon a significant gas component.25 Vietnam, on the other hand, relies more heavily on coal for its electricity generation.26 It does so despite facially having abundant gas reserves in the South China Sea.27 Problematically, China has contested Vietnam’s claims, including through threat of force.28 Vietnam therefore relies more heavily on coal in its power mix (even as it has been hoping to expand its gas-​fired power infrastructure).29 In the traditional energy paradigm, energy systems rely on coal and gas for the generation of at least base load electricity.   

B  The Traditional Transportation Paradigm Oil has been the predominant transportation fuel source under the traditional energy paradigm since Winston Churchill switched British Royal Navy from coal to oil after his arrival at Whitehall as First Lord of the Admiralty.30 Refined oil products remain critical to personal transportation by car (gasoline and diesel). They are essential for freight transport by road (diesel).31 They are the fuel for air

2022) USEIA https://​www.eia.gov/​outlo​oks/​steo/​rep​ort/​elec​tric​ity.php (projecting 1,574.22 billion kWh from natural gas and 805.08 billion kWh from coal by 2023 in the US). 24 Asifur Rahman, ‘Bangladesh’s Gas Reserves Drying Up’ The Daily Star (26 April 2022) https://​ www.csis.org/​blogs/​ene​rgy-​headli​nes-​ver​sus-​tre​ndli​nes/​comp​lex-​relat​ions​hip-​betw​een-​coal-​and-​ gas-​eur​ope. 25 ‘Country Profile: Bangladesh’ (2016) IEA https://​www.iea.org/​countr​ies/​Ban​glad​esh. 26 ‘Country Profile: Vietnam’ (2016) IEA https://​www.iea.org/​countr​ies/​viet-​nam. 27 ‘South China Sea’ (15 October 2019) USEIA https://​www.eia.gov/​intern​atio​nal/​analy​sis/​regi​ons-​ of-​inter​est/​Sout​h_​Ch​ina_​Sea. 28 See Bill Hayton, ‘China’s Pressure Costs Vietnam $1 Billion in the South China Sea’ The Diplomat (22 July 2020); see also Diane Desierto, ‘China’s Maritime Law Enforcement Activities in the South China Sea’ (2020) 96 ILS 257. 29 ‘Country Profile: Vietnam’ (2016) IEA https://​www.iea.org/​countr​ies/​viet-​nam. 30 Churchill of course did not act alone in this endeavour but rather completed the work commenced by others. For a brief history of the switch see Cdr Erik J Dahl, ‘Naval Innovation, From Coal to Oil’ (Winter 2000–​2001) Joint Forces Quarterly 50. For the importance of the switch as a pivotal moment in global energy systems see Daniel Yergin, ‘Ensuring Energy Security’ Foreign Affairs (March/​April 2006) https://​www.for​eign​affa​irs.com/​artic​les/​2006-​03-​01/​ensur​ing-​ene​rgy-​secur​ity. 31 See ‘Transport, Improving the Sustainability of Passenger and Freight Transport’ (2021) IEA https://​www.iea.org/​top​ics/​transp​ort; Andrew Sheldon, ‘Different Types of Fuels and What’s the Best for Your Car’ (24 May 2022) American Automobile Association https://​magaz​ine.northe​ast.aaa.com/​ daily/​life/​cars-​tru​cks/​the-​differ​ent-​types-​of-​fuel-​and-​the-​one-​thats-​right-​for-​your-​car/​.

8  What Is Energy Transition? transport (aviation turbine fuel).32 They are central to transport by sea on large commercial vessels (heavy fuel oil).33 Ironically, the only place where oil has been displaced is in the military context, in which it rose to prominence. There, large vessels now sail under nuclear power.34 Due to its role in transportation, oil remains the leading fuel in the global energy mix.35 World oil consumption in the second quarter of 2022 hovers just below 100 million barrels per day and is likely ‘to increase in the long-​term from 82.5 mboe/​d in 2020 to 99 mboe/​d in 2045’.36 World production is currently slightly below demand but is forecast to again meet or exceed demand by the third quarter of 2022.37 With the exception of the global Covid-​19 pandemic depressed market in the first three quarters of 2020, oil consumption has steadily hovered around 100 million barrels per day since the second quarter of 2017.38 In the traditional energy paradigm, energy systems rely on refined oil products as the overwhelmingly predominant transportation fuel.   

III  Net Zero Around Mid-​century Energy transition today challenges the traditional energy paradigm while trying to achieve two fundamental, complementary goals. The first goal is to mitigate climate change impacts from greenhouse gas emissions. The second goal is to safeguard that energy transition is itself conducive to the realization of the right to development. The first goal of climate change mitigation must address global greenhouse gas emissions. Greenhouse gas emissions are measured in gigatons (billion tons). As there are different greenhouses gases, these greenhouse gases are translated to a total of CO2 equivalent of CO2e warming effect. In 2021, total global greenhouse gas

32 See ‘Transport, Improving the Sustainability of Passenger and Freight Transport’ (2021) IEA https://​www.iea.org/​top​ics/​transp​ort; ‘What Are the Different Types of Aviation Fuel?’ (18 November 2021) National Aviation Academy https://​www.naa.edu/​aviat​ion-​fuel/​. 33 See note 37. 34 See ‘The United States Naval Nuclear Propulsion Program 2020, Over 166 Million Miles Safely Steamed on Nuclear Power’ (2020) US Department of Energy https://​www.ene​rgy.gov/​sites/​defa​ult/​ files/​2021-​07/​2020%20Uni​ted%20Sta​tes%20Na​val%20Nucl​ear%20Pro​puls​ion%20Prog​ram%20v3. pdf. Notably, while China is building nuclear-​powered submarines, its aircraft carriers remain conventionally powered. ‘China Naval Modernization, Implications for U.S. Navy Capabilities: Background Issues for Congress’ (8 March 2022) Congressional Research Service. 35 World Energy Balances (IEA 2021). 36 2021 World Oil Outlook 2045 (OPEC 2021) 7; see also ‘Short-​term Energy Outlook: Global Liquid Fuels’ (7 June 2022) USEIA https://​www.eia.gov/​outlo​oks/​steo/​rep​ort/​glo​bal_​oil.php. 37 ibid. 38 ibid.

Net Zero Around Mid-century  9 emissions reached 40.8 Gt CO2e.39 Of these, 40.8 Gt, 36.3 Gt were CO2 emissions.40 These CO2 figures in particular represent a record high for global emissions.41 Climate change mitigation is at the heart of the 1992 UNFCCC, as well as the 1997 Kyoto Protocol and the 2015 Paris Agreement concluded under its auspices.42 With the conclusion of the Paris Agreement, world society adopted the goal to limit global climate change to well below 2oC above pre-​industrial levels.43 In November 2021, the parties to the UNFCCC and the Paris Agreement met in Glasgow to further agree on concrete timelines to meet these energy transition goals. The result of these negotiations was the Glasgow Climate Pact.44 The Glasgow Climate Pact formally consists of three decision of the parties to the UNFCCC, the Kyoto Protocol, and the Paris Agreement respectively. The Glasgow Climate Pact required unanimous approval to be adopted. Paragraphs 17 and 22 of the Glasgow Climate Pact includes the core language for the first energy transition goal.45 Paragraphs 17 and 22 respectively ‘recognize that limiting global warmed to 1.5oC requires rapid, deep and sustained reduction in global greenhouse gas emissions’.46 It specifically recognizes to reduce CO2 emissions ‘by 45 per cent by 2030 relative to 2010 levels’.47 It further recognizes that CO2 reductions must be ‘to net zero by mid-​century’ to achieve the 1.5oC temperature goal’.48 Paragraph 32 of the Glasgow Climate Pact decision adopted pursuant to the Paris Agreement process further ‘urges Parties that have not yet done so to communicate . . . long-​ term low greenhouse gas emission development strategies referred to in Article 4, paragraph 19 of the Paris Agreement towards just transitions to net zero emissions by or around mid-​century, taking into account different national circumstances’.49 The relevant language from the Glasgow Climate Pact does not impose substantive legal obligations. Paragraph 32 of the Glasgow Climate Pact decision adopted pursuant to the Paris Agreement references Article 4(19) of the Paris Agreement.50 Article 4(19) of the Paris Agreement provides that ‘[a]‌ll Parties should strive to formulate and communicate long-​term low greenhouse gas emission development strategies, mindful of Article 2 taking into account their common but differentiated responsibilities and respective capabilities, in light of different national circumstances’.51 The verb ‘should’ and the rest of the sentence indicate that the 39 Global Energy Review (n 1). 40 ibid. 41 ibid. 42 UNFCCC (9 May 1992), 1771 UNTS 107; Kyoto Protocol, 37 ILM 22 (entered into force 16 February 2005); Paris Agreement. 43 Paris Agreement, art 2(1)(a). 44 Glasgow Climate Pact (CP.26); Glasgow Climate Pact (CMP.16); Glasgow Climate Pact (CMA.3). 45 Glasgow Climate Pact (CP.26) 17; Glasgow Climate Pact (CMA.3) 22. 46 ibid. 47 ibid. 48 ibid. 49 Glasgow Climate Pact (CMA.3) 32. 50 ibid. 51 Paris Agreement, art 4(19).

10  What Is Energy Transition? provision, while appearing binding, triggers no consequence in case of lack of action. Paragraph 32 of the Glasgow Climate Pact therefore ‘urges’ the parties to act as they ‘should’, a formulation that is doubly hortatory and non-​binding. Further, paragraphs 17 and 22 of the Glasgow Climate Pact do not have any additional legal force of their own.52 Both provisions are tied to a 1.5oC warming goal.53 Article 2(1)(a) of the Paris Agreement states that the objective of the Paris Agreement is to hold ‘the increase in the global average temperature to well below 2oC above pre-​industrial levels’.54 Article 2(1)(a) goes on that the Paris Agreement parties would ‘pursu[e]‌efforts to limit the temperature increase to 1.5oC above pre-​industrial levels’.55 The recognition included in paragraphs 17 and 22 therefore does not speak directly to the operative Paris Agreement goal of ‘well below 2oC’.56 The implication of paragraphs 17 and 22 of the Glasgow Climate Pact read together with the Paris Agreement is that net zero emissions need not be reached by mid-​ century to fulfil the objective of the Paris Agreement. Paragraphs 17 and 22 of the Glasgow Climate Pact therefore appear to be purposefully vague with regard to the time horizon for action to meet the objective laid out in Article 2(1)(a) of the Paris Agreement. Despite being hortatory and purposefully vague, the language does now set one concrete goal for energy transition—​net zero CO2 emissions.57 The Glasgow Climate Pact locks all parties to the Paris Agreement into the acknowledgement that the goal of the Paris Agreement can only be met by measures that can bring CO2 emissions to net zero. The Glasgow Climate Pact further locks all parties to the Paris Agreement into acknowledging that bringing emissions to net zero must happen in the medium term rather than being exclusively a long-​term goal. Paragraphs 17 and 22 in particular are phrased as ‘recognitions’ of the conference of the parties of the Paris Agreement as a whole.58 As such, the Glasgow Climate Pact is treaty practice under the Paris Agreement that accepts a fact of relevance for interpretation of the Paris Agreement, namely what kind of measures must be taken to fulfil its ultimate purpose.59 Given this recognition—​and the fact that this 52 Glasgow Climate Pact (CP.26) 17; Glasgow Climate Pact (CMA.3) 22. 53 See note 57. 54 Paris Agreement, art 2(1)(a). 55 ibid. 56 Paris Agreement, art 2(1)(a). 57 Glasgow Climate Pact (CP.26) 17; Glasgow Climate Pact (CMA.3) 22. The decisions are express that the net zero goal applies only to ‘reducing global carbon dioxide emissions by 45 per cent by 2030 relative to the 2010 level and to net zero around mid-​century, as well as deep reductions in other greenhouse gases’. ibid. The ‘as-​well-​as’ clause leaves no doubt that the provision does not include all greenhouse gases in the net zero calculation. 58 See note 57. 59 Richard Gardiner, Treaty Interpretation (2nd edn, OUP 2015) 225–​26. The inclusion of the statement in a formal and negotiated decision of the parties under a multilateral accord is more than a press release regarding an authentic interpretation of a treaty. It is a highly formal agreement in the context of a multilateral conference convened for just such a purpose. The decisions should therefore be given significant weight in developing the underlying treaty instruments.

Net Zero Around Mid-century  11 recognition in fact will lead to detrimental reliance by third states in formulating their revised nationally determined contributions under the Paris Agreement—​the relevant language severely limits the options of the parties adopting it by operation of good faith (even if it leaves some margin for manoeuvre given the vagueness intentionally included in the agreed upon language).60 Energy transition aims to modify the operation of currently hydrocarbons-​ based energy systems such that post-​transition energy systems reach net zero CO2 emissions between the middle and the end of the century.   

The second goal of energy transition—​the progressive realization of global development through energy transition—​is related to the first goal as a matter of negotiation history. Prior to the conclusion of the Glasgow Climate Pact, several state parties appeared strongly sceptical of any net zero language in the operative documents.61 The Glasgow Climate Pact therefore makes an important addition to the goal of net zero CO2 emissions. It urges the adoption of strategies to secure ‘just transition to net zero emissions’.62 Energy transition must be ‘just’. Justice in the context of the Glasgow Climate Pact is inextricably linked to development. The Glasgow Climate Pact admonishes that concrete energy transition policies can be adopted only ‘while providing targeted support to the poorest and most vulnerable in line with national circumstances and recognizing the need for support towards a just transition’.63 This admonishment is not to provide support for specific poor or vulnerable states only. Rather, it speaks to the ‘poorest and most vulnerable’ in general. It thus speaks of groups and individuals rather than states. The Glasgow language recalls the obligation of states progressively to realize economic, social, and cultural rights by means of international assistance and cooperation to the maximum of its available resources codified for example in Article 2(1) of the International Covenant on Economic, Social and Cultural Rights.64 Notably, when states adopt policies that cause significant economic strain ‘no state can rightfully claim that the poorest and most vulnerable must suffer (further) diminution of their enjoyment of economic, social and cultural rights’.65 Rather, ‘[i]‌t is precisely in such dire circumstances that, as Bruno Simma, a former member of the 60 For a fuller discussion of the good faith in treaty practice in the context of the Paris Agreement see Frederic G Sourgens, ‘Climate Commons Law: The Transformative Force of the Paris Agreement’ (2018) 50 NYU JILP 885. 61 See ‘OPEC Head Barkindo Says 2050 Net-​Zero Unrealistic, Climate Finance Lacking’ (6 July 2021) Quantum Commodity Intelligence https://​www.qcin​tel.com/​arti​cle/​opec-​head-​barki​ndo-​says-​2050-​ net-​zero-​unre​alis​tic-​clim​ate-​fina​nce-​lack​ing-​1051.html. 62 Glasgow Climate Pact (CMA.3), para 32. 63 ibid. para 36. 64 ICESCR, 999 UNTS 171 (16 December 1966) art 2(1). 65 Ben Saul and others, The International Covenant on Economic, Social and Cultural Rights: Commentary, Cases, and Materials (OUP 2014) 145.

12  What Is Energy Transition? Committee, has argued, the ICESCR ‘should assume its most important function—​ that of a last ditch defence for the most vulnerable’.66 The Glasgow Climate Pact reprises almost verbatim the same thought. Centrally, energy transition requires the maximum possible international assistance and cooperation to achieve this end.67 At a minimum, this means that energy transition cannot be a question of outright competition. The avowed goal by some states to gain a competitive advantage in renewable energy markets from energy transition policies is therefore potentially problematic.68 While competition will be central to finding the best energy transition solutions, such competition must remain ‘co-​opetitive’.69 States cannot themselves seek or allow others to impair another’s ability to contribute and ‘compete back’. In addition, it requires substantive assistance and support for vulnerable states and peoples to secure a globally fair distribution of benefits and burdens of energy transition,70 as well as the means for full, active, free, and meaningful participation by every person and all peoples in determining this distribution.71 In reaching net zero CO2 emissions, national and international energy transition policies must protect the most vulnerable through global cooperation to the maximum of available resources consistent with the right to development and full, transparent, and meaningful global consultation.   

IV  The ‘Input’ Approach One approach to energy transition focuses on the ‘input’ of energy systems. This approach would seek to replace the traditional energy paradigm in its entirety. Such an energy transition would aim for a wholesale energy transformation.72 The ‘input’ approach would upend the traditional electricity paradigm by completely removing coal and gas as feedstock for electricity generation.73 It would replace coal and gas with a mix of carbon neutral feedstocks. This mix includes intermittent renewable generation like wind and solar.74 It also includes less

66 ibid 145–​46. 67 ICESCR, art 2(1). 68 Dotterud and Reimer (n 2) 81, 86. 69 Adam Branderburger and Barry Nalebuff, ‘The Rules of Co-​opetition’ (January-​February 2021) Harvard Business Review https://​hbr.org/​2021/​01/​the-​rules-​of-​co-​opetit​ion. 70 Convention on the Right to Development (Draft 2) art 13. 71 ibid art 4(2). 72 Emanuele Taibi and others, Power System Flexibility for the Energy Transition, Part 1: Overview for Policy Makers (IRENA 2018) 10. 73 ibid. 74 ibid.

The ‘Output’ Approach  13 intermittent sources such as hydroelectric generation and geothermal generation.75 It finally and controversially includes nuclear power.76 The ‘input’ approach would also upend the traditional transportation paradigm by completely removing oil as a fuel for transportation. This approach would instead rely upon a mix of carbon neutral fuels as a replacement for oil.77 Centrally, this includes the electrification of personal transportation.78 It further includes the use of hydrogen as a fuel for cargo transport as well as, potentially aviation.79 The ‘input’ approach is the basis of one of the leading policy recommendations going into the Glasgow negotiations. Ahead of the negotiations, the UK as president of the negotiation round commissioned the IEA to develop a blue print for reaching net zero emissions by 2050.80 The IEA proposal embraced an input model and sought to displace the hydrocarbons energy paradigm in its entirety, calling for no investment in new fossil-​fuel projects.81 The ‘input’ approach also is highly influential in popular approaches to energy transition due to youth activism like the movement led by Greta Thunberg.82

V  The ‘Output’ Approach A second approach to energy transition focuses on the greenhouse gas ‘output’ of energy systems. This approach seeks to work within existing energy systems. Rather, than replacing the traditional paradigm, an output approach seeks to optimize the traditional hydrocarbon paradigm to meet climate and development goals through geo-​engineering.83 75 ‘Hydropower has a Crucial Role in Accelerating Clean Energy Transitions to Achieve Countries Climate Ambitions Securely’ IEA (30 June 2021). 76 See Kate Abnett, ‘Germany to Reject EU Green Investment Label for Nuclear Power’ Reuters (16 May 2022) https://​www.reut​ers.com/​busin​ess/​germ​any-​rej​ect-​eu-​green-​inv​estm​ent-​label-​nucl​ear-​ power-​2022-​05-​16/​. 77 John D Graham, The Rise of the Modern Plug-​In Electric Vehicle: Public Policy, Innovation and Strategy (Edward Elgar Publishing 2021) 343–​49; see also John Ainger, ‘EU Lawmakers Uphold Ban on New Combustion Engine Cars by 2035’ Bloomberg (8 June 2022) https://​www.bloomb​erg. com/​news/​artic​les/​2022-​06-​08/​eu-​lawmak​ers-​uph​old-​ban-​on-​new-​com​bust​ion-​eng​ine-​cars-​by-​ 2035#xj4y7v​zkg. 78 Andrea Herbst and others, ‘Future Energy Demand and Demand Side Flexibility in a Decarbonized Centralized Energy System’ in Dominik Möst and others (eds), The Future European Energy System, Renewable Energy, Flexibility Options and Technological Progress (Springer 2021) 91, 94–​95. 79 Russel Edson, ‘Freight Transportation: On the Cusp of a Hydrogen-​Powered Future’ (8 September 2021) Smart Energy International https://​www.smart-​ene​rgy.com/​renewa​ble-​ene​rgy/​frei​ght-​tra​nspo​ rtat​ion-​on-​the-​cusp-​of-​a-​hydro​gen-​powe​red-​fut​ure/​. 80 Stéphanie Bouckaert and others, Net Zero by 2050: A Roadmap for the Global Energy Sector (4th edn, IEA 2021) 3. 81 ibid. 82 Greta Thunberg, No One Is Too Small to Make a Difference (Penguin 2019). 83 See Jay Michaelson, ‘Geoengineering and Climate Management’ in Will Burns and Andrew Strauss (eds), Climate Change Geoengineering: Philosophical Perspectives, Legal Issues, and Governance Frameworks (CUP 2013) 81.

14  What Is Energy Transition? The ‘output’ model ideally would strive to keep the traditional electricity paradigm in place undisturbed. This model would address greenhouse gas emissions from electricity generation through smokestack-​style technology.84 This technology would capture large-​scale CO2 emissions from power generation, utilize the CO2 in future oil and gas developments by injecting the CO2 into oil and gas reservoirs to increase reservoir pressure, and thus produce more oil and gas.85 The CO2 then would be safely stored.86 The ‘output’ model would thus address energy transition within the existing paradigm. Energy transition would be a matter of technological progress within existing energy systems and not of energy transformation. Ideally, the ‘output’ model would strive to keep the traditional transportation paradigm in place, as well. This model would address greenhouse gas emissions from transportation through a combination of fuel efficiency, direct air capture of CO2, and carbon sink measures. Fuel efficiency measures would reduce the CO2 intensity of transportation within the existing paradigm.87 Direct air capture would then capture CO2 in low concentration environments, meaning that CO2 could be removed anywhere and not just at large source points.88 Traditional carbon sinks further augment technological CO2 capture efforts.89 CO2 captured through direct air capture could be stored in any manner of ways (including in oil and gas recovery). Energy transition again would be a matter of technological innovation rather than one of completely altering energy systems. The output approach has found significant backers in the technology sector.90 It is also an approach championed by states and non-​state actors who are particularly strongly integrated into the traditional energy paradigm.91 This approach treats energy transition as an engineering challenge.92 It does not see it as a call to transform global energy systems completely. 84 See William S Scherman and Jason Fleischer, ‘The Environmental Protection Agency and the Clean Power Plan: A Paradigm Shift in Energy Regulation Away from Energy Regulators’ (2015) 36 ELJ 355, 358 (noting the traditional focus of environmental agencies on smokestack technologies). 85 See ‘The CCUS Hub Playbook, A Guide for Regulators, Industrial Emitters, and Hub Developers, Understanding CCUS’ CCUS Hub https://​ccus​hub.ogci.com/​wp-​cont​ent/​uplo​ads/​2022/​03/​Unders​ tand​ing-​CCUS.pdf. 86 ibid. 87 Jody Freeman, ‘The Obama Administration’s National Auto Policy: Lessons from the ‘Car Deal’ (2011) 35 HELJ 343, 344–​46 (discussing the link between fuel efficiency and carbon intensity standards in recent US regulatory practice). 88 See David Keith, A Case for Climate Engineering (MIT Press 2013). 89 David Reay and John Grace, ‘Carbon Dioxide: Importance, Sources, and Sinks’ in David Reay (ed), Greenhouse Gas Sinks (CABI 2007) 1. 90 Akshat Rathi and Stefan Nikola, ‘Musk and Google Add to $2 Billion Boost for Carbon Removal’ Bloomberg (3 May 2022) https://​www.bloomb​erg.com/​news/​artic​les/​2022-​05-​03/​elon-​musk-​alpha​bet-​ inv​est-​in-​car​bon-​remo​val-​tec​hnol​ogy. 91 HE Mohammad Sanusi Barkindo, Keynote Address (26 February 2020) OPEC https://​www.opec. org/​opec_​web/​en/​pre​ss_​r​oom/​5854.htm; ‘Recycling Carbon Dioxide’ Oil and Gas Climate Initiative https://​www.ogci.com/​inv​estm​ent-​portfo​lio-​recycl​ing-​car​bon-​diox​ide-​ccus/​. 92 Chris Mooney, ‘Rex Tillerson’s View of Climate Change: It’s Just an “Engineering Problem”’ Washington Post (14 December 2016) https://​www.was​hing​tonp​ost.com/​news/​ene​rgy-​envi​ronm​ent/​ wp/​2016/​12/​13/​rex-​til​lers​ons-​view-​of-​clim​ate-​cha​nge-​its-​just-​an-​engi​neer​ing-​prob​lem/​.

A Hybrid Approach  15

VI  A Hybrid Approach The international legal framework governing energy transition endorses a hybrid approach between both the ‘input’ and ‘output’ models. The most directly relevant piece of international law-​making to have directly been asked to address the question of energy transition pathways to date (international climate law) has purposefully refused to make such a choice. Consequently, energy transition governance must follow a hybrid approach between these different pathways. Treaties concluded and decision approved under the auspices of the UNFCCC remained scrupulously neutral on energy transition pathways. Public discourse surrounding the Copenhagen climate negotiations in 2009 to the Paris climate negotiations in 2015 singled out hydrocarbons use as a key cause of anthropogenic climate change and in fact advocated for their express inclusion in treaty instruments.93 However, the Copenhagen Accord and the Paris Agreement do not mention oil, gas, coal, fossil fuels, or hydrocarbons in general.94 Instead, they look to reducing emissions.95 Emission reductions can be achieved in many different ways.96 The choice not to commit to a single path despite repeated invitations to do so must be seen as intentional given the consensus requirement for decisions under the UNFCCC.97 This impression is further confirmed by the Glasgow Climate Pact. The Glasgow Climate Pact for the first time mentions a specific fuel.98 The Glasgow Climate Pact ‘calls upon Parties to . . . transition towards low-​emission energy systems, including by rapidly scaling up the deployment of clean power generation and energy efficiency measures, including accelerating efforts toward the phase-​out of unabated coal power and inefficient fossil fuel subsidies . . .’.99 The Glasgow Climate Pact makes reference to ‘clean power generation’.100 ‘Clean power generation’ requires a ‘phase out of unabated coal power’.101 The inclusion of ‘unabated’ was an intentional

93 James Hansen, ‘Copenhagen Summit: Is There Any Real Chance of Averting the Climate Crisis?’ Guardian (28 November 2009) https://​www.theg​uard​ian.com/​commen​tisf​ree/​2009/​nov/​29/​cop​enha​ gen-​sum​mit-​clim​ate-​cha​nge; Harro van Asselt and Michael Lazarus, ‘Fossil Fuel Supply “a Crucial Omission” from Paris Climate Deal’ Climate Home News (18 December 2015) https://​www.climat​echa​ ngen​ews.com/​2015/​12/​18/​fos​sil-​fuel-​sup​ply-​is-​miss​ing-​link-​in-​paris-​clim​ate-​deal/​. 94 Copenhagen Accord; Paris Agreement. 95 Copenhagen Accord, 2; Paris Agreement, art 4(1). 96 Bouckaert and others (n 80)IEA 3 (‘Despite the current gap between rhetoric and reality on emissions, our Roadmap shows that there are still pathways to reach net zero by 2050’). Given that the goal of current climate law is not to reduce emissions to net zero by 2050 as discussed above (the mid-​century mark was linked instead to the 1.5oC temperature goal and not the ‘well below 2oC temperature goal), additional pathways are available. 97 Daniel Bodansky and others, International Climate Change Law (OUP 2017) 75. 98 ‘The Glasgow Climate Pact: Key Outcomes’ (2021) UNFCCC https://​unf​ccc.int/​proc​ess-​and-​ meeti​ngs/​the-​paris-​agreem​ent/​the-​glas​gow-​clim​ate-​pact-​key-​outco​mes-​from-​cop26. 99 Glasgow Climate Pact (CMA.3) 32. 100 ibid. 101 ibid.

16  What Is Energy Transition? negotiation point at the Glasgow negotiations.102 The reference to ‘phase-​out of unabated coal’ is one means of ‘deployment of clean power generation’ as indicated by the use of ‘including’. Consequently, ‘abated coal’ is a form of ‘clean power generation’ not requiring to be phased out. This implies that abatement technology itself turns power generation into ‘clean power generation’. This implication is consistent with the Paris Agreement.103 Further, if such abatement technology turns coal-​ fired power generation into ‘clean power generation’ the same must be true for gas. The word ‘abated’ is a reference to carbon capture technology.104 The Glasgow Climate Pact thus incorporates the output model within permissible net zero pathways. It did not adopt an ‘input’ only approach to energy transition. The rejection of an input-​only approach at Glasgow is fatal to any argument that such an approach might nevertheless be required as a consequence of some other international legal obligation. The international climate regime is the regime that most specifically and most directly is concerned with climate change mitigation and greenhouse gas emissions reductions. A consensus-​based decision by a conference of the parties under a universally subscribed multilateral convention on the specific subject matter undercuts any argument that some other legal obligation might nevertheless achieve the same result as ultimately too clever for its own good. The compromises made at Glasgow dealt squarely with the issue of an input only approach—​the IEA Net Zero 2050 report prepared for purposes of the meeting endorsed it.105 The negotiation history squarely rejected it.106 The fact that a compromise agreement was made is strong treaty practice by all states to support that the input approach is not legally mandated. At the same time, it would be incorrect to assert that the climate law framework looks exclusively to the output approach. The bottom-​up nature of the Paris Agreement permits states to choose their respective pathways. It does not commit any one party to any one particular means of achieving the goals of the Paris Agreement. In fact, the efforts of states and non-​state actors to support renewable energy technology have already had a remarkable effect. Renewable energy generation at this point is price competitive with gas and coal fired power plants, depending 102 Valerie Volcovici, Kate Abnett, and William James, ‘U.N. Climate Agreement Clinched after Late Drama over Coal’ Reuters (14 November 2021) https://​www.reut​ers.com/​busin​ess/​cop/​un-​clim​ate-​ nego​tiat​ors-​go-​into-​overt​ime-​save-​15-​cels​ius-​goal-​2021-​11-​13/​. 103 Paris Agreement, art 4(1); Bodansky and others (n 97) 75; Rules, Modalities and Procedures for the Mechanism Established by Article 6, paragraph 4, of the Paris Agreement (CMA.3). 104 Global Coal to Clean Power Transition Statement (4 November 2021) UN Climate Change Conference UK 2021 https://​ukco​p26.org/​glo​bal-​coal-​to-​clean-​power-​tra​nsit​ion-​statem​ent/​ (‘Unabated’ coal power generation is described by the G7 and the IEA as referring to the use of coal power that is not mitigated with technologies to reduce carbon dioxide emissions, such as Carbon Capture Utilisation and Storage (CCUS). You can find out more in this G7 press release (July 2021) and on page 193 of the IEA ‘Net Zero by 2050’ report’). 105 Bouckaert and others (n 80) 3. 106 Volcovici, Abnett, and James (n 102).

A Hybrid Approach  17 upon context.107 This market advantage means that the traditional electricity paradigm is already coming under strain. With further technological advancements, it is to be expected that this strain will become the stronger. Consequently, even market factors alone would see to it that renewables will take a greater share of the electricity generating market. The only way to avoid such a result would be through subsidies for fossil fuel that would support an inefficient (that is, more expensive) form of energy generation. The Glasgow Climate Pact calls on the parties to the Paris Agreement not to use such subsidies.108 By implication, it therefore supports the increased market penetration of renewable energy sources by market forces. In addition, the nationally determined contributions of most all energy producing states embrace diversification from the hydrocarbons paradigm.109 This is further not a new development. From at least 1974, countries such as Saudi Arabia have sought development agreements with the US on solar technology transfer.110 These nationally determined contributions, too, are treaty practice that supports the vital importance of the ‘input’ approach as one means of bringing about energy transition.111 Importantly, these nationally determined contributions note the need for support to bring about diversification. This support is the kind of cooperation required by human rights law and climate law. The inclusive approach therefore must be seen not just as a means of transforming energy systems to achieve climate ends, but also a means to achieve development ends. In reaching net zero CO2 emissions, national and international energy transition policies may draw on different approaches to alter energy generation and consumption and to engineer solutions for the consequence of greenhouse gas emissions such as by their removal or other geo-​engineering approaches that can stabilize the climate.   

The legal complexity in governing energy transition outlined in the remainder of this book is precisely the result of a hybrid approach. There is no single correct

107 See ‘Levelized Cost of Energy, Levelized Cost of Storage, and Levelized Cost of Hydrogen 2021’ (28 October 2021) Lazard https://​www.laz​ard.com/​pers​pect​ive/​leveli​zed-​cost-​of-​ene​rgy-​leveli​zed-​ cost-​of-​stor​age-​and-​leveli​zed-​cost-​of-​hydro​gen/​. 108 ‘The Glasgow Climate Pact: Key Outcomes’ (2021) UNFCCC https://​unf​ccc.int/​proc​ess-​and-​ meeti​ngs/​the-​paris-​agreem​ent/​the-​glas​gow-​clim​ate-​pact-​key-​outco​mes-​from-​cop26. 109 For a detailed analysis of relevant NDCs see Leonardo Sempertegui and Frederic G Sourgens, ‘The Importance of States and the Private Oil Sector for Successfully Implementing the Energy Transition’ (2021) 67 RMMLF-​INST 2. 110 Giuliano Garavini, The Rise and Fall of OPEC in the Twentieth Century (OUP 2019) 234. 111 See eg Saudi Arabia Intended NDC at 3 (November 2015); NDC of Congo, at 2 (21 April 2017); Equatorial Guinea NDC at 8 (30 October 2018); Venezuela NDC at 6 (27 February 2017); Gabon NDC at 1 (11 November 2016); Iraq NDC at 169–​70 (8 December 2016); Nigeria NDC at 2 (16 May 2017); Qatar NDC at 2 (19 November 2015); UAE Second NDC at 1 (29 December 2020); Kuwait NDC at 5 (November 2015); Ecuador NDC at 17 (29 March 2019).

18  What Is Energy Transition? and legally mandated means to implement energy transition policies further. Rather, diverse energy transition policies must satisfy multiple legal regimes at the same time. Yet, this means that the ‘how’ of energy transition remains a matter of choice, consistent with the consultation of national populations. Energy transition therefore truly is an act of human agency to shape the course of human progress for future generations as well as our own.

2

Why Energy Transition? I Introduction Chapter 1 has introduced what energy transition is. In the context of the discussion of what energy transition is, the climate imperative loomed large. To understand why world society must adopt energy transition policies and what these policies must achieve begins with a deeper understanding of the climate imperative. Climate remains far and away the most important reason to drive energy transition forward. Nevertheless, the point of energy transition cannot be seen only in light of the climate imperative. Rather, energy plays a central role in the global economy today. It is therefore important to understand how global energy supply chains underlie global economic value chains in general. Without energy, current global value chains become untenable. A call for energy transition therefore also deeply affects these global value chains in general. Global economic value chains themselves are deeply complex and problematic. They are a source of global growth and a growth of global human capacities worldwide on the one hand. On the other hand, global value chains are also a source of widening inequality. These widening inequalities have made their mark domestically in the rise of populist movements turning against globalization. They also have led to international critiques of globalized economic value chains as lacking legitimacy. Energy transition will radically reshape the global economy and globalized economic value chains. In the first place, energy transition has the potential to upset existing energy supply chains. These energy supply chains currently are built on the basis of the traditional energy paradigm discussed in c­ hapter 1: the production, refinement, transportation, and use of coal, gas, and oil products. A change in energy supply chains will drastically alter the distribution of global state revenue opportunities from the energy sector as well as employment opportunities for the residents of those states. As energy transition reshapes the global economy and globalized economic value chains, energy transition responds to other policy imperatives beyond climate change. This chapter outline these imperatives in terms of energy equity broadly defined as well as energy security. Energy equity here means equitable access to energy in order to participate in the global economy on fair terms. Energy equity therefore requires more than simply the construction of power plants. It

20  Why Energy Transition? requires integration into global economic value chains together with fair access to energy. Energy security, in turn, means looks to how resilient global energy systems are. Energy transition must improve energy security in order to be viable. It therefore must respond to energy security concerns or risk being rolled back. This chapter outlines these reasons for and pressures acting upon energy transition in turn. It does not yet introduce the legal regimes governing each of these concerns or how they could be harmonized. These questions will be dealt with in later chapters. Instead, it provides a survey of the playing field on which energy transition must make sense from an economic and policy perspective. This perspective is critical to understand what areas of law energy transition chiefly touches upon and what these legal regimes must ultimately achieve.

II  The Climate Imperative ‘Climate’ refers to long-​term weather patterns in a specific geographic region. Regional climates are all interconnected in a global climate system.1 That means that changes in the climate in one place will have knock-​on effects on other regional climates.2 Global climate systems are determined by solar energy retained in the atmosphere.3 Roughly, ‘49% is absorbed by Earth’s surface, and 20% is absorbed by the atmosphere’.4 The global climate is therefore a worldwide balance of the energy retained by the Earth and its atmosphere.5 Since the industrial revolution, human activity has significantly increased the emission of global greenhouse gases.6 The most important of these gases by volume is CO2.7 There are, however, other, more powerful greenhouse gases than CO2, like methane.8 What makes these greenhouse gases more powerful is their ability to absorb and retain more solar heat. Currently, emissions are at record highs.9 In 2021, total global greenhouse gas emissions reached 40.8 Gt CO2e, 89 per cent of which were CO2 emissions.10 A key function of climate change is that greenhouse gases remain in the atmosphere for significant periods of time. CO2 remains in the atmosphere for a period

1 Paul Loubere, ‘The Global Climate System’ (2012) 3 Nature Education Knowledge 24. 2 ibid. 3 ibid. 4 ibid. 5 ibid. 6 Joseph J Romm, Climate Change: What Everyone Needs to Know (OUP 2016) 1–​3. 7 D Ehhalt and others, ‘Atmospheric Chemistry and Greenhouse Gases’ in IPPC, Third Assessment Report Climate Change (IPCC 2001) 241. 8 ibid. 9 ibid. 10 Global Energy Review: CO2 Emissions in 2021 (IEA 2022).

The Climate Imperative  21 of 300 to 1,000 years.11 Other greenhouse gases like methane have a much shorter life in the atmosphere, approximately twelve years.12 Climate change therefore is a function of the stock of greenhouse gases emitted in the past that remain in the atmosphere and the flow of new greenhouse gasses added to this stock.13 This presents a significant challenge: even stopping all greenhouse gas emissions only addresses the flow of greenhouse gases. It does not deal with the stock of greenhouse gases. Long-​term energy transition pathways must reach net negative emissions through removal to address the stock of greenhouse gases in the atmosphere.   

Climate change represents a vital threat to human survival.14 Global climate change causes a massive, violent, and extreme adjustment of regional climates.15 These extreme adjustments destroy vital eco-​systems needed for human survival.16 They change the global hydrological cycle, disrupting water access in some places and flooding others (or sometimes cause both in the same place at different times).17 They further create major disruptions for agricultural production.18 They make areas unlivable either due to sea-​level or temperature rise or other catastrophic damage from extreme weather events.19 It is reasonably clear that the effects of climate change will worsen exponentially,20 and that current actions will have visible effects only in several decades. Still, as it stands, global climate science suggests that climate change pathways can be stopped before they reach catastrophic proportions if global average temperature increases can be held at or around 1.50C above pre-​industrial levels.21 The outside temperature increase at which climate change may remain manageable (be it with truly severe adverse consequences for both human rights and for bio-​diversity) is 20C above pre-​industrial levels.22 11 Alan Buis, ‘The Atmosphere: Getting a Handle on Carbon Dioxide’ (9 October 2019) NASA https://​clim​ate.nasa.gov/​news/​2915/​the-​atm​osph​ere-​gett​ing-​a-​han​dle-​on-​car​bon-​diox​ide/​ 12 ‘Why Methane from Cattle Warms the Climate Differently than CO2 from Fossil Fuels’ (7 July 2020) CLEAR Center University of California at Davis https://​clear.ucda​vis.edu/​exp​lain​ers/​why-​meth​ ane-​cat​tle-​warms-​clim​ate-​diff​eren​tly-​co2-​fos​sil-​fuels. 13 Benoit Mayer, The International Law on Climate Change (CUP 2018) 1–​6. 14 Valérie Masson-​Delmotte and others (eds), Global Warming of 1.50C (IPCC 2019) 280. 15 ibid. 16 ibid. 17 ibid 69. 18 ibid 278–​81. 19 ibid. 20 ‘Climate Change Widespread, Rapid, and Intensifying’ (9 August 2021) IPCC https://​www.ipcc. ch/​2021/​08/​09/​ar6-​wg1-​20210​809-​pr/​. 21 Masson-​Delmotte and others (n 14) 175–​311. 22 For a summary explaining the differences in impact even within this range and the severe impacts of 2°C warming see ‘What Are the Impacts of 1.50C and 20C of Warming?’ in Valérie Masson-​Delmotte and others (eds), Global Warming of 1.50C (IPCC 2019) 282–​83.

22  Why Energy Transition? Energy systems are at the heart of anthropogenic climate change. Electricity and transportation are responsible for approximately 66 per cent of greenhouse gas emissions.23 To combat climate change requires energy transition. With global energy system CO2 emissions at approximately 24 Gt, the scale of the energy transition challenge is sizeable.24 The response needed is at a gigaton scale. By way of context, US coal-​fired power plants in 2020 emitted 767 million metric tons of CO2.25 That means that even eliminating the entire US coal-​fired power plant fleet would not reduce global CO2 emissions by even one gigaton. Such an effect would require taking all US coal-​fired power plants and approximately half of US gas-​fired power plants offline.26 Mid-​term energy transition pathways must reduce the net flow of CO2 emissions on a gigaton scale to limit warming to well below 2°C above pre-​industrial levels.   

Further complicating energy transition efforts, climate change is likely soon to hit tipping points. These tipping points denote events that ‘can result in or be associated with major changes in the climate system’.27 Such events are associated with existing climate components.28 These include, first, the cryosphere (Arctic and Antarctic ice sheets).29 Melting of the cryosphere has multiple impacts on climate systems (loss of reflectivity/​albedo from the ‘whiteness’ of the ice sheets;30 impact on ocean currents.31) Secondly, tipping points include a slowdown of the thermohaline circulation in the Atlantic.32 The thermohaline circulation is likely to have weakened in light of a perceptible slowing of the Gulf Stream and poses climate risks for instance in the North Atlantic that can become irreversible.33 The Pacific Ocean presents a third tipping point due to changes in El Niño patterns.34 The El Niño is ‘associated with significant warming of the usually cold eastern Pacific Ocean’ and ‘occur[s]‌about once every 20 years’.35 El Niño events are already predicted to double and this increase will not be reduced by climate stabilization.36 23 ‘Emissions by Sector’ IEA https://​www.iea.org/​repo​rts/​gre​enho​use-​gas-​emissi​ons-​from-​ene​rgy-​ overv​iew/​emissi​ons-​by-​sec​tor. 24 Global Energy Review (n 10). 25 ‘How Much Carbon Dioxide Is Produced per Kilowatthour of U.S. Electricity Generation?’ USEIA https://​www.eia.gov/​tools/​faqs/​faq.php?id=​74&t=​11. 26 ibid. 27 Masson-​Delmotte and others (n 14) 257. 28 For a table of tipping events and likelihood of occurrence see ibid 264. 29 ibid 257. 30 ibid. 31 ibid. 32 ibid. 33 ibid. 34 ibid. 35 ibid. 36 ibid.

The Role of Energy in Economic Globalization  23 Fourthly, the ‘role of the Southern Ocean in the global carbon cycle’ could tip.37 Warming of the Southern Ocean would significantly decrease the ability of the ocean to act as a ‘carbon sink’ absorbing CO2 emissions, meaning that even with steady emissions, a significantly greater proportion of those emissions remain in the atmosphere.38 Some tipping points are external to climate systems, as such. For example, fifthly, there is a potential for ‘additional carbon release from future permafrost thawing and methane release from wetlands’ which would have an impact in the range of 100 gigatons of CO2.39 Avoiding these tipping points requires different short-​term action in addition to the long-​term aim of gradually reducing net emissions. The short-​term action can be achieved by affecting climate systems externally by way of geo-​engineering.40 Short-​term energy transition policies must avoid climate tipping points either by achieving mid-​term energy transition pathways on a significantly shortened timeframe or by externally moderating temperature increases through geo-​ engineering approaches.   

III  The Role of Energy in Economic Globalization ‘Globalization’ and the structure of the world economy today is premised principally on energy access as well as on the traditional energy paradigm. Globalization, roughly, refers to the increased interconnection and global interaction between economies and societies.41 These interconnections and interactions are energy dependent. A restructuring of global energy chains, therefore, is very likely to have deep impacts for globalization itself. This effect may and should be salutary. Globalization has been an engine of global economic and human-​capabilities growth, the catalyst for the rise of middle classes and innovation-​based economies around the world.42 Nevertheless, the view of globalization as the unquestioned engine for the rise of global democracy and human rights has beaten a retreat and has done so in earnest following the US (and then global) 2008 financial crises.43 Since at least then, it is generally accepted 37 ibid. 38 ibid 257–​58. 39 ibid 12. 40 See ch 1. 41 Jeffrey Sachs, The Ages of Globalization: Geography, Technology, and Institutions (CCoUP 2020) 11–​12. 42 David Pilling, The Growth Delusion: Wealth, Poverty, and the Well-​Being of Nations (Penguin 2018); Philippe Aghion and others, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations (HUP 2021). 43 See Stephen Holmes and Ivan Kratev, The Light that Failed: Why the West Is Losing the Fight for Democracy (Pegasus Books 2020).

24  Why Energy Transition? that globalization has also been an engine of oppression and economic and social inequalities irreconcilable with ideals of human dignity.44 The Paris Agreement itself suggests this link. The yardstick for ‘before’ and ‘after’ for climate change is warming ‘above pre-​industrial levels’.45 Industrialization links climate change to globalization. Fossil fuels were the double catalyst without which industry-​driven economic growth would have been impossible: they fuelled exponentially more efficient production methods and permitted global transport of raw materials and food stuffs needed to feed the new industrial economy.46 Significantly, the inequalities observed today can be traced back to the eighteenth and nineteenth centuries (and their corresponding energy systems) as ‘the benefits from industrialization have been unevenly distributed and those who benefited most historically also have contributed most to the current climate problem’.47 Some argue that the link between GDP and energy consumption is about to be broken and that an uncoupling of economic growth and energy is taking place.48 Increased energy efficiency, electrification, and a switch to a service economy are would-​be drivers of this uncoupling.49 Global increases in greenhouse gas emissions currently do not reflect this projection. Rather, these projections look only to parts of the most advanced economies without taking into account the carbon intensity of the entire value chain on which these economies rely (ie the import of industrial and agricultural goods).50 This fuller picture is reflected in current global transportation totals. For example, imports of finished goods and services into the US hovers around 15 per cent of GDP.51 China is a leading source of US imports.52 Sea-​based shipping between the US and China alone account for approximately 2.5 per cent of global CO2 emissions.53 The same is true with regard to the import of materials as part of

44 See Adom Getachew, Worldmaking after Empire: The Rise and Fall of Self-​Determination (PUP 2019); Giuliano Garavini, The Rise and Fall of OPEC in the Twentieth Century (OUP 2019). 45 Masson-​Delmotte and others (n 14) 7. 46 Sachs (n 41) 11, 134–​35; see also Nicholas Mulder, The Economic Weapon: The Rise of Sanctions as a Modern Tool for War (YUP 2022) 32–​33 (discussing the complex trading relationships supporting Krupp’s steelworks in Germany). 47 Masson-​Delmotte and others (n 14) 55. For a discussion of the nascent global economy and its impact on late eighteenth and early nineteenth century policymaking see Alexander Mikaberidze, The Napoleonic Wars: A Global History (OUP 2020). 48 See eg Namit Sharma, Bram Smeets, and Christer Tryggestad, ‘The Decoupling of GDP and Energy Growth: A CEO Guide’ (24 April 2019) McKinsey https://​www.mckin​sey.com/​ind​ustr​ies/​elect​ ric-​power-​and-​natu​ral-​gas/​our-​insig​hts/​the-​dec​oupl​ing-​of-​gdp-​and-​ene​rgy-​gro​wth-​a-​ceo-​guide. 49 ibid. 50 ibid. 51 ‘United States Imports of Goods and Services in % of GDP’ World Bank World Integrated Trade Solution https://​wits.worldb​ank.org/​Cou​ntry​Prof​i le/​en/​coun​try/​USA/​starty​ear/​2015/​endy​ear/​2019/​ indica​tor/​NE-​IMP-​GNFS-​ZS. 52 ‘Countries & Regions (2019 Statistics)’USTR https://​ustr.gov/​countr​ies-​regi​ons. 53 ‘Pollution from US-​China Trade Harms People Up and Down East Asia’ (1 November 2019) Nature https://​www.nat​ure.com/​artic​les/​d41​586-​019-​03285-​x.

The Role of Energy in Economic Globalization  25 larger value chains. Perhaps counter-​intuitively, the long supply chains on which the global economy relies increase efficiencies in the same way that they did in the nineteenth century.54 This fuller picture is also reflected in emissions totals from industrial and agricultural activity. The production of food, pulp and paper, basic chemicals, refining, iron and steel, nonferrous metals (aluminium, copper, and zinc), and non-​metallic minerals (cement and glass) require significant energy.55 This makes energy extremely important, as the pathway to economic development for most societies goes through a process of industrialization.56 This fuller picture also shows that the path to a greater share of the benefits of globalization lie in increasing rather than decreasing energy intensive in developing economies. Energy intensive industries like steel are a stepping stone for global take off as evidenced by the move of steel production first to China and then to India.57 Economies then can ‘graduate’ to heavy industry and chemicals, the automotive industry and entry into other more sophisticated economic segments.58 The global economy and economic globalization is wholly dependent on energy intensive, global supply chains. Global supply chains are energy intensive due to the need to transport raw materials, components, and finished products in order to benefit from the efficiencies created by local competitive advantages and global trade.   

The flipside of this fuller picture is that economic development and a means to increase human growth opportunities in developing countries is dependent on globalization. Developing economies use their ability to supply export markets more cheaply with needed goods as a means to jumpstart their own domestic economies. Domestic markets develop in the shadow of export markets. Together both drive further domestic economic growth and create a local marketplace for goods and services produced elsewhere. Critically, this pathway to economic development depends on energy. It depends on transportation to reach global markets in which the goods produced in developing and emerging markets are sold. The production processes themselves are also energy intensive.59 They thus depend on a large-​scale build-​out of energy

54 Mulder (n 46) 32–​33. 55 International Energy Outlook at 113 (2016) USEIA https://​www.eia.gov/​outlo​oks/​ieo/​pdf/​ind​ustr​ ial.pdf. 56 Aghion and others (n 42). 57 See Deloitte, ‘Iron and Steel Industry Report (2017) https://​www2.deloi​tte.com/​am/​en/​pages/​ manufa​ctur​ing/​artic​les/​iron-​and-​steel-​indus​try-​rep​ort.html. 58 See ibid. 59 See ibid.

26  Why Energy Transition? infrastructure to support industry. Energy access therefore is the cornerstone for economic development in those economies.   

Global economic growth is energy driven as both (1) the production of materials, components, and finished products sold on global markets and (2) the operation of communication networks that serve as the backbone for the services industries are energy intensive.   

The story of today’s energy intensive world economy reflects the same potential for increased human capacities and for greater inequalities as its nineteenth-​ century precursor. Globalization provides a gross increase in global economic value (ie economic growth). This growth is a good in its own right in that it provides the means progressively to realize human development.60 As the nineteenth-​ century example shows, harnessing this growth towards broad-​based increases in standards of living requires policy action.61 The emergence of twenty-​first-​century populism more than suggests a need for further policy action as globalization has led to significant dislocations in post-​industrial economies and industrializing economies alike.62 Energy transition is enmeshed in this broader economic and political context. To be successful, it must not create conditions for further inequality (‘do no harm’). It also requires that the legal principles governing energy transition respond to the broader question of how positively to use the growth generated by globalization to realize human capabilities.

IV  Global Energy Value Chains and Globalization Energy transition is further complicated because global energy value chains themselves are highly complex. This complexity creates two related problems for energy transition. First, unravelling energy supply chains is deeply disruptive to global economies and will itself create economic losses. Secondly, existing economic activity depends on reliable energy access, creating energy security problems for the real economy. 60 See Alessio Terzi, Growth for Good: Reshaping Capitalism to Save Humanity from Climate Catastrophe (HUP 2022). 61 For a fascinating account of liberalism and its development on both sides of the Atlantic (and its response to social problems created by industrialization) see Helena Rosenblatt, The Lost History of Liberalism: From Ancient Rome to the Twenty-​First Century (PUP 2018). 62 Abijit Banerjee and Esther Duflo, Good Economics for Hard Times (Public Affairs 2019) 51–​97. For a discussion of such dislocations globally see Binyamin Appelbaum, The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society (Little, Brown & Company 2019); Holmes and Kratev (n 43.

Global Energy Value Chains and Globalization  27

A  Energy Value Chains A ‘value chain’ links inputs to outputs through specific transformation processes.63 Value chains classically are a tool to analyse the performance of a firm.64 In the energy context, value chains refer to the ‘range of different activities and processes that jointly contribute to the transformation of underlying [energy] resources into useable end-​products’.65 Energy value chains transform energy resources into usable power by producing energy resources, refining them into useable fuels, transporting these fuels to market, and distributing them to end users.   

Production of energy resources. The first step in the energy value chain brings together the ‘owner’ of the resource, the surface owner burdened with the production of the resource, and the working interest holder who extracts the energy resource. Traditionally, subsurface minerals (oil, gas, coal) are frequently owned or held by the state under its exercise of permanent sovereignty over natural resources.66 Energy value chains begin when the owner of the energy resource finds a party with the right technical know-​how and capital needed to access the resource (typically a multinational).67 They also include equipment manufacturers and service providers needed to produce the resource.68 The beginning of the value chain in the renewables paradigm is similarly complex. It requires the raw materials to produce solar panels and wind turbines, as well as the materials to erect turbines and solar arrays.69 It further requires energy companies to operate the renewables plants. Producing energy resources (both fossil fuels and renewables) is a complex task involving in situ resource owners, surface owners, working interest holders charged with severing the resource from the property, construction companies, equipment suppliers, service suppliers and other players needed to complete resource severance.   

63 See Michael E Porter, Competitive Advantage: Creating and Sustaining Superior Performance (Free Press 2008). 64 ibid. 65 Silvana Tordo and others, ‘National Oil Companies and Value Creation’ (2011) World Bank Working Paper No 218 at 1. 66 Owen Anderson and others, International Petroleum Law and Transactions (RMMLF/​FNREL 2020) 18–​24. 67 ibid 26–​36. 68 ibid. 69 For a discussion of unexpected supply chain issues see Frederic G Sourgens, ‘Diligent Zero’ (2022) 75 SMU LR 417; see also Margarita Mercedes Balmaceda, Russian Energy Chains: The Remaking of Technopolitics from Siberia to Ukraine to the European Union (CCoUP 2021).

28  Why Energy Transition? Refining. The energy source must be refined from its crude form to a useable commodity.70 Refining is a critical intermediate step in the value chain. This refining again requires specific equipment, know-​how and service providers. In the renewable paradigm there is no similar refining step. The analogous problem is energy storage.71 Electricity generated from renewables does not have an intermediate refining process if it is immediately used. But if it is not immediately used, it has to be stored somehow to remain useful.72 This intermediate step might require the production of batteries or other physical or chemical energy storage solutions to be brought to the renewable energy source. Refining energy resources uses large-​scale chemical and physical processes at a refining facility connected to suitable transportation modalities to transform energy resources into useable fuels.   

Transportation. Once energy resources are refined, they have to be transported. Gas is typically moved by pipeline.73 Alternatively, it can be liquefied at liquefaction plants and then moved to tankers.74 Oil and refined products can be transported via pipeline, tanker or truck and are comparatively more movable than gas.75 The transportation of traditional energy products is a highly complex task involving multiple participants in the value chain. In the renewables paradigm, transportation requires interconnection to a grid.76 This grid again requires significant technological know-​how and special components.77 This know-​how and need for special components is the greater in the renewables paradigm due to the problem of transmission loss. Different fuels pose different complex transportation challenges to bring fuels from the point of refining to the end source. These challenges vary significantly from fuel to fuel.   

70 Anderson and others (n 66) 954–​57. 71 Wayne Hicks, ‘Declining Renewable Costs Drive Focus on Energy Storage’ (2 January 2020) NREL https://​w ww.nrel.gov/​news/​featu​res/​2020/​declin​ing-​renewa​ble-​costs-​drive-​focus-​on-​ene​rgy-​stor​ age.html. 72 ibid. 73 Anderson and others (n 66) 1071–​143. 74 ibid. 75 ibid 948–​1053. 76 Sara Lumbreras and others, ‘The Key Role of the Transmission Network’ in Sara Lumbreras, Hamdi Abdi, and Andrés Ramos (eds), Transmission Expansion Planning: The Network Challenges of the Energy Transition (Springer 2020) 1–​12. 77 See ibid.

Global Energy Value Chains and Globalization  29 Distribution to end users. Distribution to end users adds yet another layer to the value chain. The energy resource has to be brought to an end consumer in a manner that the end consumer can use. This means that one needs to build a distribution network (eg gas stations for gasoline/​petrol). This again introduces a new set of stakeholders in the energy value chain. Fuels require a convenient and ubiquitous distribution network to reach fuel end consumers.   

Manufacture and maintenance of goods tied to the energy source. Finally, value chains also include the manufacture and maintenance of goods that are tied to the specific energy source. The most obvious example is the car. Refined petroleum requires specifically calibrated machines to be of use. And these machines in turn place specific demands on refining—​they can only use specific grades of refined products. At the end of this value chain, consumers of the goods require professionals to maintain the equipment, eg car mechanics. Energy chains therefore reach, for example, from Siberian oilfields produced with Anglo-​Dutch know-​how all the way to German car mechanics via Polish-​located Saudi-​owned refining capacity and long pipeline networks. Fuels require specifically manufactured goods calibrated to the fuel type to transform fuel into a desired outputs (cars, plug-​mixers, 220 volt electric razors etc.).   

B  The Internal Costs of Transition for Energy Value Chains Energy transition has the ability to affect participants across the energy value chains. An input approach to energy transition would have an immediate impact.78 It would replace participants in the traditional energy value chain with different stakeholders from the renewable energy value chain.79 There is only a limited overlap between traditional energy and renewable stakeholders, meaning that the disruption will be felt throughout the value chain. One (imperfect) analogue for such a disruption is the effect of economic globalization in the 1990s on US

78 See ch 1. 79 For a good summary of the solar energy value chain see ‘The Solar Value Chain: Value Chain Segments & Activities’ Green Rhino Energy http://​www.green​rhin​oene​rgy.com/​solar/​indus​try/​ind​_​val​ uech​ain.php. For a good summary of the wind energy value chain see ‘Wind Manufacturing and Supply Chain’ USDE https://​www.ene​rgy.gov/​eere/​wind/​wind-​manufa​ctur​ing-​and-​sup​ply-​chain.

30  Why Energy Transition? manufacturing centres.80 This analogue suggests a significant economic, social, and cultural adjustment with significant, near permanent losers.81 Output and hybrid solutions significantly reduce this pressure.82 They provide time and resources for an ongoing diversification.83 This approach requires significantly greater global cooperation to be realized and to avoid developmental retrogression.84 This is particularly the case in developing and emerging economies.85 Frequently, these economies adopted energy solutions premised in the traditional energy paradigm only recently and therefore are subject to significant fossil fuel-​ related financial obligations.86 These investments therefore have to be addressed to avoid stranding such economies in an obsolete corner of the world economy. Different approaches to energy transition result in different dislocations of existing energy value chains and different creations of new energy value chains.   

C  Energy Security Implication of Energy Transition Energy transition also has potentially significant implications for energy security. Energy security broadly refers to the reliability and resilience with which energy value chains deliver energy to an end user when that end user needs the energy.87 There are different ways in which energy security can be impaired. Three of these are of particular significance in the energy transition context. First, the energy source itself can be less reliable than ideal. Energy sources themselves can be more or less secure as a matter of the energy source itself (or as a matter of modalities of transportation). Solar and wind power pose the most serious such problem because these sources of energy are intermittent, meaning that they are not available on demand.88

80 See section II. 81 ibid. 82 See ch 1. 83 ibid. 84 Aysu Biçer, ‘COP26 Failing to Deliver on $100b Climate Finance to Developing Countries’ (4 November 2021) Andolu Agency Report https://​www.aa.com.tr/​en/​envi​ronm​ent/​cop26-​fail​ing-​to-​deli​ ver-​on-​100b-​clim​ate-​fina​nce-​to-​dev​elop​ing-​countr​ies/​2412​022. 85 ibid. 86 The World Bank first stopped considering coal-​fired power plant support in 2018. Han Chen, ‘Is the World Bank Ending Financing for Coal? Only in Kosovo . . .’ (11 October 2018) NRDC https://​www. nrdc.org/​expe​rts/​han-​chen/​world-​bank-​end​ing-​financ​ing-​coal-​only-​kos​ovo. Lending commitments run for terms of up to 50 years. 87 Daniel Yergin, ‘Ensuring Energy Security’ (2006) 85 Foreign Affairs 69, 69–​78. 88 MR Anisur and others, ‘Latent Thermal Storage (LHTS) for Energy Sustainability’ in Atul Sharma and Sanjay Kar (eds), Energy Sustainability Through Green Energy (Springer 2015) 245, 246.

Global Energy Value Chains and Globalization  31 Secondly, the energy value chain can be subject to strong capacity restraints.89 The more spare capacity there is, the greater energy security and vice versa (eg are there sufficient oil and gas reserves in storage if a hurricane temporarily shuts down oil and gas production). Thirdly, the energy value chain can be subject to significant geopolitical risk. Some states use strategic resources needed in the energy chain to create geopolitical pressure on third states.90 In reverse, states also use sanctions on energy producers as a means to hurt these producers economically.91 Both unbalance energy value chains for reasons beyond energy systems themselves. When there is not enough spare capacity in the energy systems themselves, this conduct is thus liable to lead to significant energy insecurity, market volatility, and explosive price increases.92 Each of these energy security issues have immediate impacts on large segments of the global economy as well as on the daily lives of the general population. When energy is not available at the levels needed, economic activity will have to be curbed.93 This in means that any shortfall in energy has an immediate and potentially sizeable economic impact.94 This impact is more than just economic.95 Energy shortfalls will have significant impacts on residential properties and personal travel due to blackouts and energy shortages. These shortages further typically do have a significant knock-​on effect. Because energy is at the backbone of economic activity both in production and transportation, energy shortages create other shortages. These shortages compound each

89 For a short introduction for spare capacity problems in the global economy more generally see Daniel Gross, ‘Rethinking Spare Capacity’ Strategy +​Business (22 October 2021) https://​www.strat​egy-​ busin​ess.com/​blog/​Ret​hink​ing-​spare-​capac​ity. For energy specific analysis see Paul Hickin and Eklavya Gupte, ‘Fuel for Thought: Spare Capacity in Focus as OPEC+​Output Hikes Coincide with Rising Oil Security Risks’ (21 September 2021) S&P Global https://​www.spglo​bal.com/​commod​ityi​nsig​hts/​en/​ mar​ket-​insig​hts/​blogs/​oil/​092​121-​fft-​opec-​oil-​secur​ity-​risks-​spare-​capac​ity. 90 The extent of this use remains debated. See eg Nikos Tsafos, ‘The Energy Weapon: Revisited’ CSIS (18 March 2022) https://​www.csis.org/​analy​sis/​ene​rgy-​wea​pon—​revisi​ted (cautioning prudence in overbroad claims); Aura Sabadus, ‘Putin’s Energy Weapon: Europe Must Be Ready for Russian Gas Blackmail’ Atlantic Council (8 July 2022) https://​www.atla​ntic​coun​cil.org/​blogs/​ukrai​neal​ert/​put​ins-​ ene​rgy-​wea​pon-​eur​ope-​must-​be-​ready-​for-​russ​ian-​gas-​blackm​ail/​ (taking a more sanguine position). For a discussion of an earlier oil embargo in its policy context see Garavini (n 44) 220–​21. 91 See Oona A Hathaway and Scott J Shapiro, The Internationalists: How a Radical Plan to Outlaw War Remade the World (Simon & Schuster 2017) 389 (discussing US energy sanctions against Iran). 92 The oil and refined petroleum price environment in 2022 provides a case study for this risk. See ‘What’s Next for Oil and Gas Prices as Sanctions on Russia Intensify’ (10 March 2022) JP Morgan https://​www.jpmor​gan.com/​insig​hts/​resea​rch/​oil-​gas-​ene​rgy-​pri​ces; Sergei Vakulenko, ‘How Russia Could Thwart an Oil Price Cap’ (7 May 2022) Carnegie Endowment for International Peace https://​ carneg​ieen​dowm​ent.org/​eur​asia​insi​ght/​87437. 93 For a discussion of this problem (and difficult to implement countermeasures) see ‘Emergency Measures Can Quickly Cut Global Oil Demand by 2.7 Million Barrels a Day, Reducing the Risk of a Damaging Supply Crunch’ (18 March 2022) IEA https://​www.iea.org/​news/​emerge​ncy-​measu​res-​can-​ quic​kly-​cut-​glo​bal-​oil-​dem​and-​by-​2-​7-​mill​ion-​barr​els-​a-​day-​reduc​ing-​the-​risk-​of-​a-​damag​ing-​sup​ ply-​cru​nch. 94 For one case study see Lisa Beilfuss, ‘The Economic Impact of Risking Gas Prices Is Trickier than It Seems’ (29 March 2022) Barron’s https://​www.barr​ons.com/​artic​les/​gas-​pri​ces-​inflat​ion-​5164​8563​095. 95 ibid.

32  Why Energy Transition? other. Energy shortages frequently lead to higher prices for energy.96 Shortages in basic goods and services similarly increase prices for those goods and services.97 Both price factors coincide with each other, ie goods that are already more expensive due to supply chain limitations become even more expensive due to higher energy prices. When left unchecked, this energy insecurity can create significant inflationary pressures on the world economy that in turn affects the daily lives of the general population98 Energy security, in other words, is not an abstract concept. It is a daily necessity. Energy security measures the reliability and resilience with which energy value chains deliver energy to end users. Energy security is a function of the intermittence of energy sources, spare capacity in energy systems, and resilience of energy systems against geo-​political shocks.   

V Conclusion Energy transition responds to multiple different imperatives at the same time. As we have seen, the imperative that is front of mind is the climate imperative. Climate change creates a pressing need to find a means to stop warming in the short term to avoid climate tipping points, reduce net greenhouse gas emissions in the medium term to relieve pressures on the atmospheric CO2 budget and to remove CO2 from the atmosphere in the long term. As we have also seen, energy transition does not just answer to climate imperatives. This chapter has shown how fundamental energy is to the global economy. It has also shown how the global economy has created significant inequalities that could be exacerbated by climate change. Energy transition must not do so. Further, energy transition must not only avoid doing harm, it should also actively assist in creating development conditions and reducing dangerous global inequalities that have caused significant economic and social back sliding around the world. In addition, energy transition also must be mindful of existing energy supply chains. These supply chains reach deep into global economies. A radical fast departure from these supply chains is likely to leave significant global economic

96 ibid. 97 Will Knight, ‘The Supply Chain Crisis Is About to Get a Lot Worse’ Wired (28 March 2022) https://​ www.wired.com/​story/​sup​ply-​chain-​cri​sis-​data/​; Jeanna Smialek, ‘Fed Officials, Spooked by Data, Fretted in June About Inflation Becoming Entrenched’ NY Times (6 July 2022) https://​www.nyti​mes. com/​2022/​07/​06/​busin​ess/​fed-​minu​tes-​inflat​ion-​inter​est-​rates.html. 98 Jorge Alvarez and Philip Barrett, ‘Global Inflation Pressures Broadened on Food and Energy Price Gains’ IMF Blog (28 January 2022) https://​blogs.imf.org/​2022/​01/​28/​glo​bal-​inflat​ion-​pressu​res-​broade​ ned-​on-​food-​and-​ene​rgy-​price-​gains/​.

Conclusion  33 dislocation in its wake. Energy transition must be mindful not to create inequalities in these supply chains in particular. Finally, energy transition must improve global energy security. Global energy security provides a bedrock for economic and geopolitical stability. Energy transition pathways can endanger energy security in three different ways, intermittence, insufficient spare capacity, and geopolitical interference. All three can best be answered by broad energy mixes that make available significant spare capacity for energy access. It is therefore not enough for energy transition to succeed on a shoestring. It must succeed with enough room to spare to safeguard basic energy security or else risk geopolitical and global economic turmoil.

3

How Can Energy Transition Take Place? I Introduction So far, the book has focused on the what and the why of energy transition. It has not yet introduced the ‘how’ of energy transition. What tools, broadly speaking, are available to achieve the energy transition and development imperatives outlined in the last chapter? This chapter will provide an introduction of what these different tools are. The chapter will organize these tools under three headings. These headings track the ‘input’ and the ‘output’ approach to energy transition introduced in Chapter 1. The first set of tools are the kind of tools typically associated with energy transition. They seek to replace the components supporting the traditional hydrocarbons paradigm such as renewable energy. In addition to renewable energy, decarbonization of the electricity sector could also rely on nuclear energy. However, replacing traditional sources of energy one to one is likely to be insufficient. Rather, an input model would also need to address transportation. This change in inputs in transportation currently can rely on two different (and potentially complementary) approaches: electrification of transportation and hydrogen transportation. Electrification will impose additional demands on the electricity grid. This increases the challenges to implement an input approach to energy transition. The second set of tools are the kind of tools not traditionally associated with energy transition: means to remove greenhouse gases from the atmosphere. The discussion surrounding greenhouse gases and ‘carbon sinks’ typically centre on preventing a further destruction of natural sinks (rain forests). It sometimes covers additional natural sinks—​planting more trees. The additional technological approaches of high-​density carbon removal and direct air capture (DAC) are less commonly known. This chapter introduces both technological approaches. A third set of tools addresses climate outcomes directly without addressing greenhouse gases, at all: solar radiation management. While the technology belongs to the output approach, it is so meaningfully different that it is treated in a separate section. This chapter does not make any arguments about how to combine these different approaches. It merely outlines them, introduces the potential downsides to each approach, and presents the challenges each of these approaches faces.

36  How Can Energy Transition Take Place?

II  Changing Energy Inputs This section briefly outlines the different tools available to change energy inputs. It will introduce each method and sketch its value chain. It will discuss the challenges (and opportunities) involved in each.

A  Renewable Energy (1) Solar Solar generation can replace, in certain circumstances, fossil-​fuel-​fired electricity generation below the cost of traditional fossil fuel generation. Solar generation is susceptible to intermittence risk. Electricity is produced typically by means of solar photovoltaic cells. Solar generation capacity is geographically variable and geographically limited. The geographic variability of solar energy requires significant investment in high voltage transmission lines from wind sites to electricity consumers.

  

Key pieces in the hydroelectric supply chain are under stress, including elements needed for the core component of solar photovoltaic cells, polysilicon.

The energy from sunshine (solar radiation) can be turned into electricity. Solar photovoltaic cells are the dominant technological approach. These cells are made out of polysilicon.1 Polysilicon is a refined product: first, quartz is turned into metallurgical silicon in arc furnaces,2 then the metallurgical silicon is further refined, typically using a so-​called Siemens process, to create crystalline polysilicon.3 The polysilicon then is used to manufacture solar cells (monochromatic crystalline, passivated emitter rear cell (PERC), polycrystalline, thin-​film).4 When sunlight hits the polysilicon in a photovoltaic cell, the radiation generates direct current

1 Suneel Deambi, From Sunlight to Electricity: A Practical Handbook on Solar Photovoltaic Applications (Energy & Resources Institute 2015) 103. 2 Gunnar Eriksson and Klaus Hack, ‘Production of Metallurgical-​Grade Silicon in an Electric Arc Furnace’ in Klaus Hack (ed), SGTE Casebook (2nd edn, Woodhead Publishing 2008) 415–​24; Dan Maloney, ‘Mining and Refining: Pure Silicon and the Incredible Effort It Takes to Get There’ Hackaday (15 November 2021) https://​hacka​day.com/​2021/​11/​15/​min​ing-​and-​refin​ing-​pure-​sili​con-​and-​the-​ inc​redi​ble-​eff​ort-​it-​takes-​to-​get-​there/​. 3 Bruno Ceccaroli and others, Solar Silicon Processes: Technologies, Challenges, and Opportunities (CRC Press 2016) 50. 4 ‘Solar Photovoltaic Cell Basics’ USDE https://​www.ene​rgy.gov/​eere/​solar/​solar-​photo​volt​aic-​cell-​ bas​ics (introducing the different dominant approaches).

Changing Energy Inputs  37 electricity.5 This direct current electricity then must be ‘inverted’ for use in the grid because the grid relies on alternating current.6 Once inverted, the electricity can be stepped up using transformers to travel along high voltage lines closer to the eventual point of use, where it will be stepped back down to lower voltage and fed into electricity distribution networks. ‘Utility scale’ solar with a nameplate capacity of at least 1 megawatt is one of the cheapest ways of generating electricity today.7 Solar energy encounters four potential problems. First, solar energy is intermittent, meaning that it must be combined with storage or another energy source reliably to meet demand.8 Secondly, areas with significant sunlight exposure are not always close to urban centres where energy is needed, meaning that solar requires significant next-​generation long-​distance transmission capability reducing the significant loss of energy in traditional transmission.9 Thirdly, currently solar is highly real-​estate intensive, creating conflicts with other industrial, agricultural, or urban uses of land (although solar glass that can be integrated in new high-​rise buildings may help alleviate the second and third problem).10 Finally, solar energy also faces resource constraints. As of 2022, current demand for the polysilicon will lead to at least a five-​year shortage at currently anticipated demand.11

(2) Wind Wind generation can replace fossil-​fuel-​fired electricity generation below the cost of traditional fossil fuel generation. Wind generation is susceptible to intermittence risk. Electricity is produced by harnessing wind force by means of large-​scale wind turbines. Wind generation is geographically variable and geographically limited. The geographic variability of wind energy requires significant investment in high voltage transmission lines form wind sites to electricity markets.   

Key pieces in the hydroelectric supply chain are under stress, including rolled steel.

5 Peter McNutt, William R Sekulic, and Gary Dreifuerst, ‘Solar Photovoltaic DC Systems: Basics and Safety’ (2018) NREL https://​www.nrel.gov/​docs/​fy18o​sti/​68696.pdf. 6 ‘Solar Photovoltaic Cell Basics’ (n 4). 7 Lazard, ‘Levelized Cost of Energy Analysis 15.0’ (28 October 2021) https://​www.laz​ard.com/​pers​ pect​ive/​leveli​zed-​cost-​of-​ene​rgy-​leveli​zed-​cost-​of-​stor​age-​and-​leveli​zed-​cost-​of-​hydro​gen/​. 8 Robert Fares, ‘Renewable Energy Intermittency Explained: Challenges, Solutions, and Opportunities’ Scientific American (11 March 2015) https://​blogs.sci​enti​fica​meri​can.com/​plug​ged-​in/​ renewa​ble-​ene​rgy-​interm​itte​ncy-​explai​ned-​cha​llen​ges-​soluti​ons-​and-​opport​unit​ies/​. 9 ‘How Much Energy Is Lost in Electricity Transmission and Distribution in the United States?’ USEIA (4 November 2021) https://​www.eia.gov/​tools/​faqs/​faq.php?id=​105&t=​3. 10 Yoana Cholteeva, ‘The State of Solar Glass’ Power Technology (2 February 2021) https://​www. power-​tec​hnol​ogy.com/​analy​sis/​the-​state-​of-​solar-​glass/​. 11 Max Hall, ‘Polysilicon Maker Predicts 5-​Year Shortage of Solar Raw Material’ PV Magazine (20 April 2022) https://​www.pv-​magaz​ine.com/​2022/​04/​20/​poly​sili​con-​maker-​predi​cts-​5-​year-​short​age-​ of-​solar-​raw-​mater​ial/​.

38  How Can Energy Transition Take Place? Kinetic energy from air (wind) can be transformed into electricity with commercial wind turbines. The turbine is powered by fibre blades.12 The fibres use can vary from glass to carbon fibres to aromatic polyamide to basalt to hybrids of these approaches.13 The matrices then rely on ‘thermosets (epoxies, polyesters, vinylesthers)’ for bonding.14 The blades power a generator creating electricity.15 The blades then move a rotor which in turn powers a generator. The turbine further typically utilizes rolled steel for its structural support to reach the requisite height. Wind power, again, is among the cheapest forms of electricity generation. Wind power shares the first three problems of solar energy. It is intermittent and faces transmission loss problems. One of the promises of wind and solar is that they could be combined as the intermittence of solar and wind can at times counter-​balance each other.

(3) Hydroelectric Hydroelectric generation can replace fossil-​fuel-​fired electricity generation at baseload without significant risk of intermittence. Hydroelectric generation is susceptible to drought conditions, leaving a serious and increasing intermittence risk. Electricity is produced by routing water over massive turbines. Hydroelectric generation is geographically variable and geographically limited. Key pieces in the hydroelectric supply chain are of such a size and engineering complexity as to create significant potential supply chain constraints for new projects.   

There are environmental and social drawbacks on massive hydroelectric projects

Kinetic energy from water can also be transformed into electricity with hydroelectric power plants. The most important component of the hydroelectric value chain involves the design, engineering, and construction of hydroelectric plants given the size and complexity of hydroelectric projects. The key component of any hydroelectric plant is the hydroelectric turbine-​generator unit, frequently with a capacity in excess of 100 MW.16 This unit consists of a generator and turbine.17 12 Leon Mishnaevsky Jr and others, ‘Materials for Wind Turbine Blades: An Overview’ (2017) 10 Materials 1285. 13 ibid. 14 ibid. 15 ‘How Do Wind Turbines Work?’ USDE https://​www.ene​rgy.gov/​eere/​wind/​how-​do-​wind-​turbi​ nes-​work. 16 ‘Hydropower, Supply Chain Deep Dive Assessment’ US Department of Energy Response to Executive Order 14017, ‘America’s Supply Chains’ at 23 (24 February 2022). 17 ibid.

Changing Energy Inputs  39 The generator in turn has a rotor and a stator.18 The rotor is the moving part of the generator. The ‘rotor’s outer surface is covered with ‘electromagnets’.19 The stator, in turn, is the stationary part of the generator.20 Its inner surface consists of copper windings.21 Given the generating capacity of hydroelectric plants, these copper windings are very large.22 The generator is connected to the turbine by means of a turbine generator shaft.23 The turbine itself is a large very steel propeller with multiple turbine blades.24 This turbine is mounted in a structure with wicket gates which allow water to flow through the turbine and power the generator.25 Due to the size of the turbines, they frequently require steel castings in excess of ten tons.26 Hydroelectric plants face significant challenges. First, hydroelectric plants have some intermittence concerns in case of severe droughts.27 Secondly, hydroelectric energy generation is location and resource dependent (water rich countries like Norway can cover almost their entire energy needs with hydroelectric but states without sufficient water access have less access to this technology).28 Thirdly, the construction of hydroelectric power plants is highly ecologically destructive.29 Finally, the supply chain for hydro-​component is severely limited due to the significant size of the components themselves, with industry consolidation further limiting suppliers.30

(4) Geothermal Geothermal energy can replace fossil-​fuel-​fired electricity generation at baseload without risk of intermittence. Geothermal energy is produced by drilling into geothermal hot spots, the heat of which can operate a steam turbine. Geothermal energy is geographically variable and geographically limited.   

Currently, the global geothermal marketplace remains comparatively limited.

18 ibid. 19 ‘Turbine: Generator Unit’ Hydro Québec http://​www.hydr​oque​bec.com/​learn​ing/​hydro​elec​tric​ite/ ​turb​ine-​alte​rnat​eur.html. 20 ibid. 21 ibid. 22 ‘Hydropower’ (n 16) i. 23 ibid 23. 24 ibid. 25 ibid. 26 ibid 37. 27 For a recent report see Sonal Patel, ‘California Drought Could Severely Limit Hydropower this Summer’ Power Mag (2 June 2022) https://​www.power​mag.com/​cal​ifor​nia-​drou​ght-​could-​sever​ely-​ limit-​hyd​ropo​wer-​this-​sum​mer/​. This is issue has been noted in nationally determined contributions submitted by states pursuant to the Paris Agreement. See eg Ecuador First NDC at 9 (29 March 2019). 28 Norway (2018) IRENA https://​www.irena.org/​IRE​NADo​cume​nts/​Stati​stic​al_​P​rofi​les/​Eur​ope/​ Norw​ay_​E​urop​e_​RE​_​SP.pdf. 29 For a discussion of environmental impacts see Robert Zwahlen, Assessing the Environmental Impacts of Hydropower Projects (Springer 2022) 111–​135. 30 ‘Hydropower’ (n 16) ix.

40  How Can Energy Transition Take Place? Finally, thermal or heat energy stored in the earth can also transform into electricity. In some geographic locations, the heat from the earth’s core is accessible at reachable depths. When there is sufficient fluid in place, and when the rock is sufficiently permeable, the heat from this fluid rises and can power a geothermal plant. Geothermal plants use the heat to power turbines. This power can take the form of ‘dry’ steam (here, the liquid travelling up is mostly steam already).31 Other designs rely on ‘flash’ steam. In these plants, ‘[f[luid at temperatures greater than 3600F (1820C) is pumped under high pressure into a tank at the surface held at a much lower pressure, causing some of the fluid to rapidly vaporize or “flash” ’.32 This ‘vapor then drives a turbine which drivers a generator’.33 A further geothermal technology is a binary cycle plant. In this plant, ‘[l]‌ow to moderately heated (below 4000F) geothermal fluid and a secondary (hence ‘binary’) fluid with a much lower boiling point than water pass through a heat exchanger’.34 Value chains are at a comparatively early stage.35 The technology is not yet at a break-​out point but remains an interesting additional tool for energy transition planning.

B  Nuclear Energy Nuclear energy is a generally considered to be non-​renewable but carbon neutral form of energy generation.36 This section addresses the potential of traditional nuclear and modular nuclear to become a significant factor in energy transition.

Nuclear energy can replace fossil-​fuel-​fired electricity generation at baseload without risk of intermittence. Most nuclear power plants rely on uranium as fuel source. Nuclear power plants pose environmental risks due to the need to recycle or dispose of spent fuel rods. Traditional nuclear power plants are highly expensive to design and build and are not cost competitive with renewable energy sources.

  

The modularization of nuclear power plants may provide a solution for the cost intensive nature of nuclear energy.

31 ‘Electricity Generation, Geothermal Technologies Office’ USDE https://​www.ene​rgy.gov/​eere/​geo​ ther​mal/​elec​tric​ity-​gen​erat​ion. 32 ibid. 33 ibid. 34 ibid. 35 Sertaç Akar and others, ‘Global Value Chain and Manufacturing Analysis on Geothermal Power Plant Turbines’ (September 2018) Clean Energy Manufacturing Analysis Center https://​www.nrel.gov/​ docs/​fy18o​sti/​71128.pdf. 36 Nuclear Energy for a Net Zero World (IAEA 2021).

Changing Energy Inputs  41

(1) Traditional Nuclear Traditional nuclear power plants use controlled nuclear fission to generate electricity.37 Nuclear power plants generally rely on uranium as the fuel for nuclear fuel rods.38 The fission reaction in the fuel rods is used to heat water. The steam then passes through turbines to generate electricity.39 As with hydroelectric plants, the key element of the value chain for nuclear power plants is design, engineering, and construction. In addition, one significant concern is the procurement, handling, and storage of nuclear fuel.40 The key benefit of nuclear power stations is that they can meet baseload electricity requirements with few intermittence concerns.41 Nuclear power plants have several problems. First, nuclear power plants are very expensive and time-​consuming to build, costing as much as US$6.4 million per megawatt of nameplate capacity.42 This is between five to six times the cost of installation of solar per megawatt. Secondly, nuclear power plants are notorious for delays and cost-​overruns, as much as doubling the price per megawatt of nameplate capacity.43 Thirdly, the storage of spent fuel is environmentally problematic.44 One solution can be to recycle nuclear fuel.45 Such recycling leads to the use of mixed oxide fuels in reactors.46 This significantly mitigates the storage problem. Fourthly, in case of a malfunction, nuclear power plants can create an environmental catastrophe that can change the ecosystem for a prolonged period of time. (2) Modular Nuclear One alternative to reduce the cost of nuclear energy and reduce the environmental risk posed by nuclear energy is to modularize nuclear reactors. Typical nuclear reactors have a nameplate capacity of at least 700 MW.47 At this scale, plants must be built-​to-​suit and cause the cost overruns discussed in the previous section. It is now

37 David Bodansky, Nuclear Energy: Principles, Practices, and Prospects (2nd edn, Springer 2004) 29. 38 Internationalization of the Nuclear Fuel Cycle: Goals, Strategies, and Challenges (National Academies Press 2009) 16. 39 Charles D Ferguson, Nuclear Energy: What Everyone Needs to Know (OUP 2011). 40 Internationalization of the Nuclear Fuel Cycle (n 38). 41 Nuclear Energy for a Net Zero World (n 36) vi, 2. 42 ‘Crews Complete Closed Vessel and Safety Testing on Vogtle Nuclear Unit 3 Reactor’ (14 July 2020) Bechtel https://​www.bech​tel.com/​newsr​oom/​cover​age/​2020/​crews-​compl​ete-​clo​sed-​ves​sel-​ and-​saf​ety-​test​ing/​. 43 ‘Experts Predict Further Delays to Commercial Start of Vogtle-​3’ NuclearNewswire (11 June 2021) https://​www.ans.org/​news/​arti​cle-​2975/​expe​rts-​pred​ict-​furt​her-​delay-​to-​com​merc​ial-​start-​of-​vogt​ le3/​; Kristi E Swartz, ‘Plant Vogtle Hits New Delays; Costs Surge to Near $30B’ EnergyWire (18 February 2022) https://​www.een​ews.net/​artic​les/​plant-​vog​tle-​hits-​new-​del​ays-​costs-​surge-​near-​30b/​. 44 Ferguson (n 39) (‘For the next few hundred years, the substances of greatest concern are cesium-​ 137 and strontium-​90, which have about thirty-​year half-​lives. After a few tens of thousands of years after the creation of the spent fuel, the radioactive materials have decayed to the level of the original ore containing the uranium for the fresh fuel’). 45 ibid. 46 ibid. 47 Joanne Liou, ‘What are Small Modular Reactors (SMRs)?’ IAEA (4 November 2021) https://​www. iaea.org/​new​scen​ter/​news/​what-​are-​small-​modu​lar-​react​ors-​smrs.

42  How Can Energy Transition Take Place? possible to build small modular nuclear reactors that have much lower generating capacities with a nameplate capacity of between 10 and 300 MW.48 The key benefit of modular nuclear developments is that they can be built on a standardized platform, avoiding built-​to-​suit expenses of regular nuclear plants.49 Nevertheless, the technology at the current point in time is also still at an early stage.

C  Electrification of Transportation Electrification of transportation replaces traditional internal combustion engines with battery-​powered electric cars. The most developed battery technology for electric vehicles is the lithium-​ion battery. Lithium-​ion batteries rely on specialized and stretched lithium, cobalt, nickel, manganese, graphite, copper, and aluminium supply chains. Electrification of transportation will increase demand on the electric grid with demand expected to double in some key jurisdictions like the United States. Electric transportation requires an infrastructure of battery charging stations that is not yet ready to make the technology fully mass-​marketable.   

Changing inputs in transportation requires a technology capable of replacing the internal combustion engine. The currently leading policy approach is the electrification of transportation (battery-​powered electric vehicles).50 Lithium-​ion batteries, consisting of lithium, cobalt, nickel, manganese, graphite, copper, and aluminium are the currently dominant battery technology.51 Lithium-​ion batteries currently have maximum range of over 300 miles with a 45-​minute charging time at a 350 kW charging station.52 48 ibid. 49 Bruce Huber, ‘The New Nuclear? Small Modular Reactors and the Future of Nuclear Power’ (2020) 1 Notre Dame J Emerging Tech 458, 469–​73. 50 Stéphanie Bouckaert and others, Net Zero by 2050: A Roadmap for the Global Energy Sector (4th edn, IEA 2021); Jennifer Conrad, ‘China Is Racing to Electrify Its Future’ Wired (28 January 2022) https://​www.wired.com/​story/​china-​ev-​inf​rast​ruct​ure-​charg​ing/​; Philipp Kampshoff and others, ‘Building the Electric-​Vehicle Charging Infrastructure America Needs’ (18 April 2022) McKinsey https://​www.mckin​sey.com/​ind​ustr​ies/​pub​lic-​and-​soc​ial-​sec​tor/​our-​insig​hts/​build​ing-​the-​elect​ric-​ vehi​cle-​charg​ing-​inf​rast​ruct​ure-​amer​ica-​needs(acces​sed 3 March 2023); Nick Carey, ‘Europe Needs Ambitious Charging Plans for 130 mln EV by 2035: Report’ Reuters (8 February 2022) https://​www. reut​ers.com/​busin​ess/​autos-​tra​nspo​rtat​ion/​eur​ope-​needs-​ambiti​ous-​charg​ing-​plans-​130-​mln-​evs-​ by-​2035-​rep​ort-​2022-​02-​08/​. 51 ‘Raw Materials in Focus as Lithium-​Ion Battery Market Development Moves up a Gear’ (27 January 2017) Roskill https://​www.prn​ewsw​ire.com/​news-​relea​ses/​raw-​materi​als-​in-​focus-​as-​lith​ ium-​ion-​batt​ery-​mar​ket-​deve​lopm​ent-​moves-​up-​a-​gear-​611953​095.html. 52 Nicholas Wallace and Austin Irwin, ‘EVs with the Longest Driving Range, Ranked’ Car and Driver (7 June 2022) https://​www.caran​ddri​ver.com/​shopp​ing-​adv​ice/​g32634​624/​ev-​long​est-​driv​ing-​range/​;

Changing Energy Inputs  43 Electrification of transportation runs into several important hurdles. First, electrification requires a significant expansion of the energy grid (in the US, complete electrification would require a doubling of generation capacity).53 Secondly, supply chains for lithium-​ion batteries are strained at currently projected demand level, leaving little room for the mining output increase needed for significant, fast expansion.54 Thirdly, it is on unclear whether sufficiently many mineral reserves at all exist sustainably to replace internal combustion engines.55 Finally, electric vehicles are themselves expensive and require a complex roll out of charging station infrastructures creating serious obstacles even for the highest income economies.

D  Hydrogen Transportation Hydrogen-​based transportation solutions replace traditional internal combustion engines with hydrogen-​based engines. The most developed hydrogen transportation technology is the hydrogen fuel cell. The hydrogen fuel cell produces electricity and uses this electricity to power an electric engine. Hydrogen fuel cells rely on specialized and stretched platinum and iridium supply chains.

  

Hydrogen transportation requires an infrastructure of hydrogen fuelling stations that is currently not sufficiently well developed to make the technology globally or even nationally viable.

Another alternative to the electrification of transportation is hydrogen-​based transportation.56 Hydrogen can power personal transportation as well as commercial vehicles. One means to use hydrogen in transportation is hydrogen fuel cells. Hydrogen fuel cells create electricity by combining hydrogen and oxygen in Connor Hoffman, ‘2022 Lucid Air Dream Charges More Quickly Than Any Other EV’ Car and Driver (24 March 2022) https://​www.caran​ddri​ver.com/​news/​a39502​213/​2022-​lucid-​air-​dream-​perf​orma​ nce-​charg​ing-​test/​. 53 Nichola Groom and Tina Bellon, ‘EV Rollout will Require Huge Investments in Strained U.S. Power Grids’ Reuters (5 March 2021) https://​www.reut​ers.com/​arti​cle/​us-​usa-​weat​her-​grids-​autos-​insi​ ght/​ev-​roll​out-​will-​requ​ire-​huge-​inve​stme​nts-​in-​strai​ned-​u-​s-​power-​grids-​idUSKB​N2AX​18Y(acces​ sed 3 March 2023). 54 Bouckaert and others (n 50). 55 Emily Barone, ‘Lithium Is Key to Electric Vehicle Transition. It’s Also in Short Supply’ Time (26 May 2022) https://​time.com/​6182​044/​elect​ric-​vehi​cle-​batt​ery-​lith​ium-​short​age/​. 56 For a case in favour of hydrogen, see particularly Marco Alverà, The Hydrogen Revolution: A Blueprint for the Future of Clean Energy (Basic Books 2021).

44  How Can Energy Transition Take Place? an electrochemical cell.57 Just like battery operated vehicles, hydrogen fuel cells require specialized materials, and critically platinum and iridium.58 The key benefit of a hydrogen fuel cell is that does not require recharging. It instead requires refuelling. This dramatically increases the range of vehicles. It also provides significant advantages for vehicles requiring greater power. The problems of hydrogen transportation mirror those of electrification in some respect. Both will require new mineral resources that are currently not mined in the needed amounts in order to sustainably replace traditional vehicles. Similarly, both require a specialized infrastructure in order to function optimally (EV charging stations versus hydrogen fuelling stations). Finally, both require significant electricity generation in order to produce fuel (in one case, electricity to recharge batteries in the other hydrogen to produce electricity). Despite these drawbacks, hydrogen has significant potential because of its variability across different energy systems and its transportability.

III  Changing Greenhouse Gas Outputs and Concentrations Changing energy inputs is not the only means to reduce net emissions. Rather, it is also possible to affect greenhouse gas outputs and concentrations of traditional energy sources. This section will briefly discuss four such approaches. These approaches are not exclusive of each other but rather can be (and in the first three cases already are) deployed together. These approaches are increasing energy efficiency, expanding traditional carbon sinks, carbon capture utilization and storage (CCUS), and direct air capture (DAC). The approaches discussed below protect stakeholders relying on traditional energy systems and energy value chains such as oil and gas producing states and stakeholders in existing and complex energy value chains.59 The approaches discussed below further protect stakeholders relying on petrochemical inputs as part of industrial and agricultural value chains.60 Current oil and gas production makes available inexpensive and indispensable feedstock for these industrial and agricultural value chains.61 A significant reduction in oil and gas production will have 57 ‘Hydrogen Explained’ USEIA https://​www.eia.gov/​ener​gyex​plai​ned/​hydro​gen/​use-​of-​hydro​ gen.php. 58 Nadya Rauch, ‘A Critical Case Against Hydrogen Vehicles: a Raw Materials Perspective’ (17 December 2021) PtX Hub https://​ptx-​hub.org/​a-​criti​cal-​case-​agai​nst-​hydro​gen-​vehic​les-​a-​raw-​materi​ als-​pers​pect​ive/​. 59 Leonardo Sempertegui and Frederic G Sourgens, ‘The Importance of States and the Private Oil Sector for Successfully Implementing the Energy Transition’ (2021) 67 RMMLF-​INST 2; Margarita Balmaceda, Russian Energy Chains: The Remaking of Technopolitics from Siberia to Ukraine to the European Union (CoUP 2021). 60 See David Turk and others, The Future of Petrochemicals: Towards Sustainable Plastics and Fertilisers (IEA 2018). 61 ibid 27.

Changing Greenhouse Gas Outputs and Concentrations  45 devastating knock-​on effects on the value chains in question. These knock-​on effects can be developmentally significant since there is no clear substitution. For example, some approaches to fertilization in industrial farming rely on hydrocarbon components.62 The continued viability of traditional energy value chains also protects these other industrial and agricultural value chains, thus reducing short-​and medium-​term food insecurity.

A  Increased Energy Efficiency Increased energy efficiency reduces the energy intensity of energy consuming processes. In the context of the traditional fossil-​fuel-​based energy paradigm, increased energy efficiency reduces the output of greenhouses gases of energy consuming processes.   

In the context of non-​fossil-​fuel-​based energy paradigm, increased energy efficiency reduces the needed generation capacity to meet basic demand.

One means to reduce the intensity of greenhouse gas flows is increased energy efficiency. Energy efficiency is the measure that determines how much energy is spent in achieving a particular function requiring energy and how much energy is wasted in the process. An intuitive example is the fuel efficiency of cars. Assume a person has a daily commute of 41 miles (66 kilometres) of highway and city driving. Driving this distance in a 2001 Ford Mustang Bullitt would consume 2.3 gallons (8.71 litres) of gas (petrol) per day or 575 gallons (2.177 litres) of gas (petrol) per year.63 Driving this distance instead in a 2019 Fiat 500 would consume 1.4 gallons (5.3 litres) of gas (petrol) per day or 350 gallons (1.325 litres) of gas (petrol) per year.64 The Ford Mustang Bullitt would emit approximately 5.1 metric tons of CO2 in any given year on this commute.65 The Fiat 500 would emit approximately 3.1 metric tons of CO2 in any given year for the same commute.66 Energy efficiency in this scenario would reduce emissions CO2 by two metric tons or approximately 30 per cent under the same energy paradigm for the same distance. Any system using 62 ‘Fertilizers and Pesticides’ USDA https://​www.ers.usda.gov/​top​ics/​farm-​practi​ces-​man​agem​ent/​ fert​iliz​ers-​pes​tici​des/​. 63 ‘Cash for Clunkers: Is it for You? CNN Money’ https://​money.cnn.com/​galler​ies/​2009/​autos/​0907/​ gall​ery.guide_​to_​c​lunk​ers/​index.html. The yearly calculation assumes five weeks per year of driving with five working days. 64 ‘2019 Fiat 500’ USDE https://​www.fuel​econ​omy.gov/​feg/​nofra​mes/​41149.shtml. 65 See ‘Greenhouse Gas Emissions from a Typical Passenger Vehicle’ EPA https://​www.epa.gov/​ greenv​ehic​les/​gre​enho​use-​gas-​emissi​ons-​typi​cal-​passen​ger-​vehi​cle (listing ‘CO2 Emissions from a gallon of gasoline: 8,887 grams CO2/​ -​gallon’). 66 ibid.

46  How Can Energy Transition Take Place? energy can improve efficiency. For example, improving insulation of a building improves the energy efficiency (and reduces the greenhouse gas intensity) of heating or cooling the building.67 There is an obvious problem. Energy efficiency alone cannot bring greenhouse gas emissions to zero. It can drastically reduce them, but it cannot eliminate them. The reduction in greenhouse gas emissions through efficiency measures is therefore not a stand-​alone energy transition solution. Energy efficiency nevertheless is a critical component of input solutions as well as output solutions. In the input context, energy efficiency is critical because input approaches must replace existing generation with less new generation, given the strain on renewable energy value chains.68 Given its importance to output models and input models of energy transition, it is important to hybrid models, as well.69

B  Traditional Carbon Sinks Traditional carbon sinks absorb atmospheric CO2 at a gigaton scale. Traditional sinks include plants, oceans, and soil.

  

Traditional carbon sink management can assist in offsetting both CO2 emissions and reducing CO2 stock in the atmosphere with the potential to achieve net negative carbon emissions.

One way to address greenhouse gas stocks in the atmosphere is by protecting and expanding so-​called carbon sinks. Natural systems ‘absorb’ greenhouse gases like CO2. Most obviously, plants use CO2 in photosynthesis. One mature tree absorbs approximately 48 pounds of CO2 (21.8 kilograms).70 The CO2 output of a Bullitt driver would be offset by 234 such mature trees. The CO2 output of a Fiat 500 motorist would be offset by about ninety fewer trees (142 trees).71 Trees are not the only carbon sinks. One important carbon sink is the ocean. Oceans were previously estimated to absorb approximately two billion tons (that is,

67 For a discussion see Michael E Webber, Power Trip: The Story of Energy (Basic Books 2019) 168, 192. 68 Bouckaert and others (n 50). 69 See ibid; see also Webber (n 67) 244–​52. 70 Joanna Mounce Stancil, ‘The Power of one Tree: the Very Air We Breathe’ (3 June 2019) USDA https://​www.usda.gov/​media/​blog/​2015/​03/​17/​power-​one-​tree-​very-​air-​we-​brea​the. 71 Joe Matthews, ‘California’s Trees Need to Stop Just Standing There’ (15 October 2018) Zócalo https://​www.zoc​alop​ubli​csqu​are.org/​2018/​10/​15/​cali​forn​ias-​trees-​need-​stop-​just-​stand​ing/​ideas/​ con​nect​ing-​cal​ifor​nia/​; Jim Jacobs, ‘California Forests 80%-​600% Denser than 105 Years ago, UC Researcher Says Biomass Is One of the Answers’ GV Wire (15 September 2020) https://​gvw​ire.com/​ 2020/​09/​15/​cal​ifor​nia-​fore​sts-​80-​600-​den​ser-​than-​150-​years-​ago-​uc-​res​earc​her-​says-​biom​ass-​is-​one-​ of-​the-​answ​ers/​.

Changing Greenhouse Gas Outputs and Concentrations  47 two gigatons) per year.72 New studies suggest that the oceans might in fact absorb 2.8 to 2.9 gigatons of CO2 per year (to put this difference in context, it represents approximately 39 billion trees).73 Ocean sinks rely on two dominant mechanisms. First, ocean water itself is a sink because CO2 dissolves in water.74 Secondly, sea plants like phytoplankton absorb atmospheric CO2 and then are pumped by ocean currents to the seabed.75 Both phenomena are ecologically problematic. When CO2 dissolves in water, it creates carbonic acid (H2CO3), a toxic substance for marine life.76 Similarly, the boom in phytoplankton has significant potential negative repercussions for ecosystems.77 Finally, the soil is also an important carbon sink. Plants are a key CO2 sink. CO2 from plants in turn is stored in the soil as plants decompose. Depending on how the soil is used, the soil can rerelease the CO2 into the atmosphere or keep it stored. CO2 therefore can also be managed through soil-​based storage approaches as a traditional carbon sink.78

C  Carbon Capture, Utilization, and Storage (CCUS) Carbon Capture, Utilization, and Storage (CCUS) is a set of technologies capable of removing CO2 from smokestacks and other high concentration source points. CCUS traditionally relies upon absorption or adsorption chemically binding CO2. Once captured CO2 is permanently stored in geological structures for example by utilization in enhanced oil and gas recovery. CCUS projects are currently in early deployment at megaton scale.

  

CCUS deployment at scale assist in achieving net zero emissions even while using traditional fossil fuel-​fired electricity generation.

72 Jamie Shutler and Andrew Watson, ‘The Oceans Are Absorbing More Carbon than Previously Thought’ CarbonBrief (28 September 2020) https://​www.carb​onbr​ief.org/​guest-​post-​the-​oce​ans-​are-​ absorb​ing-​more-​car​bon-​than-​pre​viou​sly-​thou​ght/​. 73 Andrew Watson and others, ‘Revised Estimates of Ocean-​Atmosphere CO2 Flux Are Consistent with Ocean Carbon Inventory’ (2020) 11 Nature Communications 4422. 74 For an excellent introduction see ‘The Ocean, A Carbon Sink’ Ocean & Climate Platform https://​ ocean-​clim​ate.org/​en/​awaren​ess/​the-​ocean-​a-​car​bon-​sink/​. 75 ibid. 76 For an introduction to the chemistry and impact of ocean acidification see ‘Ocean Acidification’ USNOAA https://​www.noaa.gov/​educat​ion/​resou​rce-​coll​ecti​ons/​ocean-​coa​sts/​ocean-​acidif​i cat​ion. 77 Brian Palmer, ‘A Massive Surge in Plankton Has Researchers Pondering the Future of the Arctic’ (9 September 2020) NRDC https://​www.nrdc.org/​stor​ies/​mass​ive-​surge-​plank​ton-​has-​rese​arch​ers-​ ponder​ing-​fut​ure-​arc​tic. 78 Daisy Dunne, ‘Restoring Soils Could Remove up to “5.5bn Tonnes” of Greenhouse Gases Every Year’ Carbon Brief (16 March 2020) https://​www.carb​onbr​ief.org/​restor​ing-​soils-​could-​rem​ove-​up-​to-​ 5-​5bn-​ton​nes-​of-​gre​enho​use-​gases-​every-​year/​.

48  How Can Energy Transition Take Place? A further means for traditional energy systems to address greenhouse gas emissions is through carbon capture, utilization, and storage (CCUS). Rather than relying on trees, oceans, and soil, it is possible to remove a significant percentage of CO2 emissions from high concentration sources artificially.79 This process can be employed at the ‘smokestack’ of single plants like gas-​or coal-​fired power plants. It can also combine different high concentration sources in a distinct geographic area bringing together industrial and energy-​generation emission sources. The removal of CO2 emissions by traditional hydrocarbons-​fired electricity generators can turn these generators carbon neutral -​or close to carbon neutral—​despite using a fossil fuel. The most widely used carbon capture technology is chemical absorption. In chemical absorption, CO2 reacts with a solvent like ethanolamine compounds.80 Another alternative process is adsorption. Here, a sorbent (typically an amine) reacts with CO2.81 Other technological processes are currently in development. Once the CO2 is captured it needs to be utilized and/​or stored. To be effective as a long-​term solution, such storage needs to be permanent.82 One means to store CO2 permanently is to inject it in geological structures. CO2 is already utilized to enhance recovery from oil and gas fields.83 CO2 therefore would have both a useful function in extending the life of existing oil and gas deposits and a means of permanent storage. Currently, there are several prototype projects bringing CCUS technology to scale.84 CCUS is a policy tool that makes sense in the context of the traditional energy paradigm or in a hybrid approach to addressing energy transition. A pure input model would seek to displace such source points entirely. In the context of an input model, CCUS would only ever be relevant in industrial processes that are difficult to decarbonize completely or effectively (such as steel production). It therefore would not be a long-​term component of input-​based energy transition policy. Even here, however, it has a short-​and a medium-​term role to play, as evidenced for example by the IEA’s Net Zero 2050 report.85

79 ‘About CCUS, Technology Report’ (April 2021) IEA https://​www.iea.org/​repo​rts/​about-​ccus. 80 ibid. 81 ibid. For a review of processes see Elif Erdal and others, ‘Solid Amine Sorbents for CO2 Capture by Chemical Adsorption: A Review’ (2017) 3 Petroleum 37. 82 See ‘The Oxford Principles for Net Zero Aligned Carbon Offsetting’ principle 2 (September 2020) University of Oxford https://​www.smit​hsch​ool.ox.ac.uk/​sites/​defa​ult/​files/​2022-​01/​Oxf​ord-​Off​sett​ing-​ Pri​ncip​les-​2020.pdf. 83 See Owen L Anderson, ‘Geologic CO2 Sequestration: Who Owns the Pore Space’ (2009) 9 Wyoming LR 97. 84 2020 Annual Report at 10 (2020) OGCI https://​www.ogci.com/​ogci-​ann​ual-​repo​rts/​. 85 Bouckaert and others (n 50).

Changing Greenhouse Gas Outputs and Concentrations  49

D  Direct Air Capture Direct air capture (DAC) is an experimental set of technologies capable of removing CO2 from the atmosphere where it is present only in low concentrations. Different DAC approaches are currently at various early stage of experimental deployment.   

Successful DAC deployment at gigaton scale has the potential to achieve net negative carbon emissions.

The most ambitious technological approach to complement traditional carbon sinks is direct air capture (DAC). The goal of direct air capture is to remove CO2 from the air even when it is present in low concentrations. If such technology could be brought to a scale commensurate with natural carbon sinks, it would be possible to reduce the flow of CO2 emissions even in the context of the traditional energy paradigm and to remove additional CO2 from the atmosphere. Carbon engineering has attracted sizeable investment from Bill Gates and traditional energy companies.86 There a number of different approaches to direct air capture that are currently in development.87 One leading enterprise founded by Harvard Applied Physics Professor David Keith, Canadian Carbon Engineering Ltd, uses a ‘giant fan’ to pull air into a structure, where a potassium hydroxide solution chemically binds the CO2.88 Swiss ClimeWorks AG uses a ‘highly selective filter’ to capture CO2.89 Other processes would rely on electrochemical reactions.90 The technology is in the early stages of development. It therefore is currently not able to remove CO2 at anywhere near the gigaton scale needed. In addition, the cost of removal remains significant. Despite these challenges, direct air capture is an important medium-​term engineering solutions no matter the energy transition pathway chosen. The key benefit of direct air capture is that it is able to attack the root problem of climate change: the stock of greenhouse gases in the atmosphere. Not only that, it is possible to locate the needed installations variably, meaning that there is less chance of competition for surface land.

86 Kevin J Ryan, ‘This Bill Gates-​Backed Startup’s Solution to Global Warming? Giant Fans. No, Really’ Inc. (May 2019) https://​www.inc.com/​magaz​ine/​201​905/​kevin-​j-​ryan/​car​bon-​engi​neer​ing-​capt​ ure-​off​set-​neut​ral-​fuel.html. 87 Anja Chalmin, ‘Direct Air Capture: Recent Developments and Future Plans’ Geoengineering Monitor (16 July 2019) https://​www.geoeng​inee​ring​moni​tor.org/​2019/​07/​dir​ect-​air-​capt​ure-​rec​ent-​ devel​opme​nts-​and-​fut​ure-​plans/​. 88 ‘Our Technology’ Carbon Engineering https://​carbon​engi​neer​ing.com/​our-​tec​hnol​ogy/​. 89 ‘Direct Air Capture: A Technology to Remove CO2’ ClimeWorks AG https://​cli​mewo​rks.com/​co2-​ remo​val. 90 David Chandler, ‘MIT Engineers Develop a New Way to Remove Carbon Dioxide from the Air’ (24 October 2019) MIT https://​news.mit.edu/​2019/​mit-​engine​ers-​deve​lop-​new-​way-​rem​ove-​car​bon-​ diox​ide-​air-​1025.

50  How Can Energy Transition Take Place?

IV  Changing Climate Outcomes through Solar Radiation Management Solar radiation management (SRM) forces solar radiation back into space before its energy can be absorbed by atmospheric greenhouse gases. SRM methods can be environmentally harmful such as when they rely on atmospheric sulphate spraying.

  

Even if SRM methods themselves are not environmentally harmful, the alteration of the solar energy budget will have material impacts on global and regional climate systems, for example, by potentially weakening hydrological cycles.

A final tool that can be brought to bear is solar radiation management (SRM). Proposed for the first time as a serious policy solution by Nobel laureate Paul Crutzen in 2006, SRM is an emergency approach.91 SRM does not change energy inputs. Nor does it address the greenhouse gas balance in the atmosphere or otherwise reduce greenhouse gas emissions. Instead, this approach directly affects the global climate by reducing the amount of energy that enters into and remains in the atmosphere by affecting sunlight.92 SRM can be environmentally harmful. Depending upon the method used, it could cause acid rain, air pollution, and a depletion of the ozone layer.93 It also affects/​weakens the hydrological cycle, leading to complex interactions with climate effects on the hydrological cycle that are difficult to predict with accuracy.94 SRM is not an energy transition policy in its own right. It does not sustainably address climate change. It simply creates a form of artificial shade to drop global temperatures.95 The key benefit of solar radiation management is that it can be implemented almost immediately and reduce global temperatures with more or less precision in the very short term.96 It thus provides time for other solutions to be implemented without running the risk of hitting the tipping milestones discussed in Chapter 2. It is a (needed) climate tourniquet that can buy time for long-​term treatment without risking that the patient dies on the spot.97 At the same time, as 91 Paul J Crutzen, ‘Albedo Enhancement by Stratopheric Sulfur Injections: A Contribution to Resolve a Policy Dilemma’ (2006) 77 Climate Change 211. 92 ibid. 93 ibid. For other approaches see David Keith, A Case for Climate Engineering (Boston Review 2013). 94 Clive Hamilton, Earthmasters: The Dawn of the Age of Climate Engineering (YUP 2013). 95 Ken Caldeira and Goindasamy Bala, ‘Reflecting on 50 Years of Geoengineering Research’ (2017) 5 Earth’s Future 10. 96 ibid. 97 Lavanya Rajamani and Jacob Werksman, ‘Climate Change’ in Lavanya Rajamani and Jacqueline Peel (eds), The Oxford Handbook of International Environmental Law (OUP 2021) 492, 510.

Conclusion  51 with a tourniquet, prolonged use without treatment is itself highly dangerous and does not address the underlying injury. It is thus only ever a short-​term solution.

V Conclusion This chapter has outlined the different technological tools available to drive the energy transition. It began with an appraisal of tools supporting an input approach to energy transition like renewable energy sources (wind, solar, hydroelectric, and geothermal) and nuclear energy. It considered the various challenges, the value chains related to these input approaches would create, including supply chain challenges these renewable sources of energy face. The chapter then addressed how an input approach to energy transition would address transportation and briefly described the electrification and hydrogen solutions to transportation under such a paradigm. The chapter next discussed tools more generally associated with an output approach. These tools focused particularly on energy efficiency, traditional carbon sinks, carbon capture, utilization, and storage, and direct air capture. The chapter outlined that such tools have a significant role to play even in the context of an input model of energy transition because these approaches reduce the amount of energy that needs to be produced under the new paradigm and also permits a start on reducing greenhouse gas accumulations in the atmosphere. The chapter finally introduced solar radiation management as a short-​term tool to address global temperature increases. It pointed out that solar radiation management is a uniquely hazardous tool and that its deployment cannot replace a systemic approach to energy transition (whether premised on an input, output, or hybrid model). Solar radiation management is an emergency tool only and should be treated as such. As one considers the challenges discussed throughout the chapter, it should have become clear there is no single silver bullet to solving energy transition. Every solution outlined in this chapter is beset with serious policy challenges, as well as supply chain problems. It is therefore not realistic to submit that any one approach can in fact solve climate change and provide a one size fits all solution to energy transition. This conclusion is fully consistent with the discussion in the first chapter. Energy transition is a matter of hybrid approaches. It is not a matter of moving one lever. It is question of moving all levers in light of contextual demands. Only by moving all the levers in question will it be possible to achieve a solution to the monumental challenges lying ahead. A hybrid approach that uses all of the tools discussed in this chapter is the only approach that has a realistic chance of success. As the discussion so far also should make clear, moving all these levers at once will create significant governance challenges and thus legal problems. Every choice

52  How Can Energy Transition Take Place? has repercussions. Every choice requires analysis. Every choice creates the potential for conflict. The law of energy transition thus is not a matter of prescribing a single pathway. It is a matter of diligent work to enable the right institutional framework that sparks the right engagements and solutions deployment to achieve a solution for a problem we will solve on a global scale. How we do so is the subject of the following chapters.

4

Governance of Energy Transition Policies I Introduction Understanding energy transition governance requires an understanding of the actors who participate in international standards setting affecting the energy transition.1 As this chapter will outline, there are many different actors that have a hand in designing, drafting, and implementing these regimes. This means that the international legal principles of energy transition are not going to conform to hierarchical governance paradigms or come only from traditional legal sources. Quite to the contrary, there will be a certain amount of pre-​programmed chaos simply because of the number of actors involved in global rule-​making. This chapter will begin to outline that this chaos is not necessarily a net negative when solving a complex problem such as the energy transition. Rather, it is possible in principle to coordinate the different actors towards common ends. This kind of governance is known as polycentric governance—​a style of governance that involves multiple different actors coordinating their approach.2 As this chapter will outline, such polycentric governance is particularly useful in the context of a ‘bottom up’ governance regime. As this chapter will show, such bottom-​up governance involves more than just traditional state regulators. It invites a great number of other stakeholders to the table. These stakeholders include international organizations. Such organizations still remain somewhat anchored in the traditional state regulatory paradigm—​they are organizations created by states to assist in meeting shared goals. But it also invites additional stakeholders to the table. These stakeholders include sub-​state level actors like provinces, federal states, and cities. They also include the private sector and civil society. These stakeholders have regulatory power beyond the traditional state-​based paradigm. Importantly, however, these stakeholders use that power for sometimes different ends. As such, this broadening of the group of stakeholders is both a potential benefit—​it brings more actors together to achieve outcomes jointly. It can also create dissonance and as such can bring about a potential fragmentation discussed in the next chapter.

1 W Michael Reisman, The Quest for World Order and Human Dignity in the Twenty-​ first Century: Constitutive Process and Individual Commitment (Brill 2012) 284. 2 Elinor Ostrom, Understanding Institutional Diversity (PUP 2005) 271,

54  Governance of Energy Transition Policies This chapter begins with an introduction to the idea of polycentric and bottom-​ up governance. It then introduces each of the key stakeholders able to exert power to shape energy transition pathways. In doing so, it explains how these stakeholders can exercise such power. It also outlines the areas of greatest potential conflict potential as well as the areas of potential synergy.

II  The Idea of Bottom-​up and Polycentric Governance When one thinks of international governance paradigms, one frequently thinks of international diplomatic conferences.3 To exaggerate the features of this style of governance, these international diplomatic conferences painstakingly negotiate the terms of an international agreement. States then agree to these terms and (hopefully) comply with their commitments.4 Sometimes, states set up international organizations as part of these multilateral treaties to fulfil important administrative functions for the parties.5 This style of governance traditionally leaves little room for a multiplicity of actors or of ideas. It rather tries to settle once and for all how states are to behave and provide comprehensive solutions to global problems.6 Governance today frequently deviates from this hierarchical understanding, seeking instead to grow norms from the bottom up.7

A  Bottom-​up Governance Bottom-​up Governance Networks Bottom-​up governance progressively realizes agreed upon outcomes by means of voluntary efforts by regulatory stakeholders. Regulatory stakeholders engage with each other and form global networks.   

Global networks permit coordination of regulatory efforts to build towards outcomes through transparent exchange.

3 Expectations of the Copenhagen climate negotiations reflected this attitude. See Clive Hamilton, Earthmasters: The Dawn of the Age of Climate Engineering (YUP 2013) 8. 4 Timothy Meyer, ‘From Contract to Legislation: The Logic of Modern Lawmaking’ (2014) 14 CJIL 559, 569 (contrasting the traditional role of a diplomatic conference to bilateral prescriptive approaches). 5 Convention for the Pacific Settlement of International Disputes 1899, art 20. 6 On the practical limitations of this grand paradigm see Robert Cooper, The Ambassadors: Thinking about Diplomacy from Richelieu to Modern Times (Weidenfeld & Nicolson 2021) 85–​110, 380–​97 (discussing the Congress of Vienna and its aftermath and the European Coal & Steel Community and the remaining influence of established industry). 7 Anne-​Marie Slaughter, A New World Order (PUP 2005) 48–​68; see also Anne-​Marie Slaughter, ‘The Paris Approach to Global Governance’ Sustainability Now (28 December 2015) https://​www. proj​ect-​syndic​ate.org/​com​ment​ary/​paris-​agreem​ent-​model-​for-​glo​bal-​gov​erna​nce-​by-​anne-​marie-​ slaugh​ter-​2015-​12.

The Idea of Bottom-up and Polycentric Governance  55 Bottom-​up governance begins from the premise of voluntary participation in shared governance projects around joint goals.8 Individual contributions to the attainment of shared goals remains at the stakeholder level.9 Contributions are not mandated ex ante but rather develop organically. Bottom-​up governance does not leave each stakeholder to its own devices. Rather, it is premised in voluntary cooperation. Cooperation occurs in networks, in which participants exchange information and consult on policy design.10 Bottom-​up governance networks allow participants to build trust and expertise through multiple exchanges over time. This trust and expertise in turn creates and supports maturing reliance interests in future coordination and cooperation.11

B  Polycentric Governance The Benefit of Polycentric Governance Polycentric governance involves multiple overlapping state, international organization, corporate, and civic stakeholders in bottom-​up governance networks.

  

Polycentric governance is fruitful because it allows stakeholders to coordinate their diverse norm processes towards a harmonious achievement of common ends.

Bottom-​up governance still assumes that governance participants are states even as it shifts the manner in which diplomatic successes are achieved.12 Energy transition governance exceeds this state-​based approach and brings non-​state actors to the table. Elinor Ostrom developed a theory of such bottom-​up governance involving state and non-​state actors as ‘polycentric’ governance.13 Rather than just including state-​based actors, it now builds social capital beyond the state by involving as large

8 Slaughter, A New World Order (n 7) 142; see also Harold H Koh, ‘Triptych’s End: A Better Framework to Evaluate 21st Century International Lawmaking’ (2017) 126 YLJF 338. 9 Slaughter, A New World Order (n 7) 142. For further discussion see also Janet Koven Levitt, ‘Bottom-​Up International Lawmaking’ (2007) 32 YJIL 393. 10 Daniel Bodansky and others, International Climate Change Law (OUP 2017) 25. 11 Slaughter, A New World Order (n 7). For a full discussion of these concepts see Frederic G Sourgens, ‘Climate Commons Law: The Transformative Force of the Paris Agreement’ (2017) 50 NYU JILP 885. 12 See Koh, ‘Triptych’s End’ (n 8); Harold Koh, ‘Why Do Nations Obey International Law?’ (1997) 106 YLJ 2599. For the development of transnational legal process—​and the role of non-​state actors in it—​see Regina Jeffries, ‘Transnational Legal Process: An Evolving Theory and Methodology’ (2021) 46 Brooklyn JIL 311. To the extent that non-​state actors have a role, they tend to have a role to make international legal obligations ‘sticky’. Harold Koh, The Trump Administration and International Law (OUP 2019) 45. This focus thus remains on state-​to-​state paradigms even if it expands its gaze significantly beyond the role of states. 13 Ostrom (n 2) 281–​86.

56  Governance of Energy Transition Policies of a number of private and civil society stakeholders in decision-​making.14 This, in turn, can increase predictability and therefore trust around core energy transition questions throughout society.15 Decision-​making becomes more resilient because it is diffused through multiple institutions in which as large a number of affected persons have a say and thus can participate in deliberation.16 This polycentric approach therefore helps to push trust building all the way down through society rather than leaving it on the ethereal plane of sovereigns.17

III  State Actors Sovereign Energy Equality State actors engage with each other on the basis of formal sovereign equality, requiring that each state has an equal international legal capacity and is accorded an equal voice in international exchanges between sovereigns when discussing the energy transition. Sovereign equality means that every state may adopt its own energy policy as it deems appropriate and as is consistent with its international legal commitments (sovereign energy equality). Power differentials between states functionally introduce inequality in global energy transition policy-​making. Bottom-​up governance counteracts functional inequality by requiring consensus for collective energy transition decision-​making.

  

Nevertheless, bottom-​up governance itself remains susceptible to functional power differentials between states in advancing policy proposals in governance networks.

A  Formal Sovereign Equality The formal starting point to assess the role of states as norm authors in international law is the principle of sovereign equality.18 Each state is formally 14 ibid. 15 Matthew C Ives and others, ‘Navigating the Water Trilemma: A Strategic Assessment of Long‐ Term National Water Resource Management Options for Great Britain’ (2018) 32 Water & Env J 546. 16 Ostrom (n 2) 283. 17 ibid 281, 285–​86; Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action (CUP 2015) 100–​15. 18 UN Charter, art 2(1); Friendly Relations Declaration, GA Res 2625, UN GAOR, 25th Session, UN Doc A/​RES/​2625 (1970). The relevant parts of the Friendly Relations Declaration were treated as indicative of custom by the International Court of Justice. See eg Military and Paramilitary Activities in and against Nicaragua (Nicaragua v USA) [1986] ICJ 14, 133 (27 June 1986).

State Actors  57 equal.19 It is a corollary that no state may interfere in another’s internal affairs or coerce its foreign policy.20 In principle, sovereign equality must mean that every state may adopt its own energy policy as it deems appropriate.21 Formal sovereign equality in the energy context is complicated by the multiple and serious externalities of energy systems.22 States cannot plead sovereign equality as a defence to the allegation that energy policies perpetrate or perpetuate an internationally wrongful act—​there is no sovereign prerogative to violate international law.23

B  Functional State Power Differentials and Energy Transition Policy-​making The formal concept of sovereign equality in international energy transition is frequently tested in functional terms. While states are formally equal sovereigns, they have different economic, technical, cultural, military, and resource capabilities.24 These differences in capabilities between states create a de facto imbalance in the power of states.25 This imbalance affects the de facto ability of states to set their own energy agendas26 and influence global energy markets. This functional difference is heightened further when those economies condition equal access to their markets on energy systems compatible with their own energy visions. Carbon border adjustments mechanisms (CBAM) are one means to exercise this power.27 CBAMs pressure third states to adopt energy solutions they did not choose themselves to remain competitive sites for foreign investment and to enjoy access to export markets.28 Such pressuring is incompatible with international law when taken to the extreme. Importantly, it is possible for states to exercise their economic power in less extreme forms.29 19 See Friendly Relations Declaration (n 18). 20 See ibid. 21 See ibid. 22 The point is made forcefully from a philosophical perspective in Stephen M Gardiner, A Perfect Moral Storm: The Ethical Tragedy of Climate Change (OUP 2011) 59. 23 James Crawford, State Responsibility: The General Part (CUP 2013) 62. 24 See Bardo Fassbender, ‘Purposes and Principles, Article 2(1)’ in Bruno Simma and others (eds), The Charter of the United Nations: A Commentary, vol 1 (3rd edn OUP 2012) 133, 140–​43. 25 ibid. 26 Energy value chains are global in nature. Energy transition in particular disrupt these global energy value chains. These disruptions limit the ability of states (particularly smaller states with comparatively smaller economic capabilities) to make their own path. On this dynamic see generally Manfred Hafner and Simone Tagliapietra (eds), The Geopolitics of the Global Energy Transition (Springer 2020); Robin Mills, ‘A Fine Balance: The Geopolitics of the Global Energy Transition in MENA’ in Manfred Hafner and Simone Tagliapietra (eds), The Geopolitics of the Global Energy Transition (Springer 2020) 113, 133–​34. 27 On the mechanics of carbon border adjustments see Andrew Shoyer and others, ‘Carbon Leakage and the Migration of Private CO2 Emitters to Other Jurisdictions’ in Kevin R Gray and others (eds), The Oxford Handbook of International Climate Change Law (OUP 2016) 294. 28 See ibid. 29 See Alexander Zahar, Climate Change Finance and International Law (Routledge 2016).

58  Governance of Energy Transition Policies However, some states have significantly greater resource power. The world’s largest energy exporters are able in principle to disrupt the energy systems in third states by refusing to meet demand in those third states. No one can force states to sell natural resources and, as a matter of fact, calls increase from developed country-​based organizations to stop such sales. This dynamic similarly creates a power dynamic that international energy transition law must address.30

C  Bottom-​up Governance Networks Bottom-​up governance mitigates the impacts of these power differentials particularly when it is also combined with consensus-​based governance. The conference of the parties under the UNFCCC is one of example of this dynamic.31 The conference of the parties can only make decisions by consensus.32 The consensus-​based mechanism therefore provides states with a significant veto threat33 no matter their economic or resources power. At the same time, this counter-​balance should not be exaggerated.34 Threats are comparatively rare.35 In any event, there are a myriad of ways in which leading economies affect the trajectory of energy transition, for instance through support for specific energy technologies. Most of these are beyond the reach of international climate negotiations. The main benefit of bottom-​up networked governance is not so much the creation of a counterweight but rather the continued exchange between stakeholders. This continued exchange can provide a means to inform counterparties of the specific needs of different stakeholders ahead of time. It also can address information and design asymmetries as part of the networked engagement process.

IV  International Organizations The Impact of International Organizations on Energy Transition International organizations influence and impact global energy transition pathways by means of their agenda-​setting power and by their role in norm implementation.

30 On the historical development of this dynamic see Giuliano Garavini, The Rise and Fall of OPEC in the Twentieth Century (OUP 2019). 31 UNFCCC (9 May 1992) 1771 UNTS 107. 32 Joanna Depledge and Andrew Higham, ‘Foundations for the Paris Agreement’ in Daniel Klein and others (eds), The Paris Agreement on Climate Change: Analysis and Commentary (OUP 2017) 27, 32. 33 ibid. 34 See Daniel Bodansky and others (n 10) 75. 35 ibid.

International Organizations  59 Agenda-​setting power affects the framing of energy transition problems and conditions the order and manner in which they are addressed. International organizations have agenda-​setting and implementation power relative to their perceived expertise, leverage, and state participation base. International organizations can impact norm implementation directly or indirectly. International organizations impact energy norm implementation directly when they provide a platform for energy decisions of their members and monitor consequent developments.

  

International organization impact energy norm implementation indirectly through decisions that facilitate the creation of energy value chain nodes, such as through funding of energy projects or conditioning funding of energy projects on benchmarks set by the international organization.

International organizations have significant clout in energy transition norm and policy authorship. The two most important roles international organizations play is in agenda and policy-​setting and in norm implementation.

A  Agenda Setting: The International Energy Agency and Global Human Rights Organizations Agenda setting is a key function for policy-​making.36 Agenda setting focuses the attention of norm authors what problems they should solve.37 Further, agenda setting provides a roadmap of the order in which problems should be solved.38 This agenda setting power is critical to the trajectory of energy transition policies. The International Energy Agency (IEA) is one example of how such agenda setting materially informs norm authorship. Recent efforts by the IEA as part of its Net Zero by 2050 report have focused on pushing energy transition efforts that are almost entirely premised in an input model of energy transition discussed in Chapter 1. That is, the IEA sought to displace fossil fuels as quickly and as widely as possible.39 It did so on the basis of a climate change mitigation perspective. While the IEA failed to achieve an input model to energy transition, it was successful in including reference to a global net zero in the final document of the Glasgow Climate Pact.40 36 See Gralf-​Peter Calliess and Peer Zumbansen, Rough Consensus and Running Code: A Theory of Transnational Private Law (Hart Publishing 2010) 135 (discussing the importance of agenda setting diffuse norm authorship processes). 37 ibid. 38 ibid. 39 Stéphanie Bouckaert and others, Net Zero by 2050: A Roadmap for the Global Energy Sector (4th edn, IEA 2021). 40 Glasgow Climate Pact (CMA.3) 22.

60  Governance of Energy Transition Policies

B  Implementation: International Financial Organizations and OPEC Some international organizations are fora in which the implementation of energy policy is debated and realized. For example, international financial organizations like the World Bank and the International Monetary Fund (IMF) are particularly important for energy transition because they make available financing and financial instruments needed for the construction and implementation of energy infrastructure.41 Financing made available as part of World Bank and IMF loans provides better financial terms compared to the open market.42 This gives the World Bank and the IMF particular power over the implementation of energy transition projects.43 This power comes in part in the choice of projects to be funded. Questions have arisen whether the World Bank and IMF should fund fossil-​ fuel based projects.44 A decision not to fund such projects could have an immediate environmental impact by preventing their construction and cause a state to adopt less carbon intensive approaches. But it is just as likely that these economies will then either pursue traditional energy projects at a higher cost or that they will not pursue an improvement of their energy infrastructure, at all.45 In these latter two cases, the World Bank and the IMF would have had a negative development impact on the economies in question. The financial means of the World Bank and the IMF to make available development finance is of significant importance for energy transition pathways. A second example is the Organization of the Petroleum Exporting Countries (OPEC). OPEC is an international organization that represents different national views from those dominating the original Bretton Woods financial institutions.46 OPEC’s clout lies in the coordination of petroleum policies of member states, including decisions for the stabilization of prices in international oil 41 See ‘Results-​Based Financing in the Energy Sector, An Analytical Guide’ World Bank Energy Sector Management Assistance Program, Technical Report 004/​13 https://​openkn​owle​dge.worldb​ ank.org/​han​dle/​10986/​17481; ‘IMF asks Pakistan to Renegotiate CPEC Energy Deals Before Making Payments: Report’ Business Standard (9 June 2022) https://​www.busin​ess-​stand​ard.com/​arti​cle/​intern​ atio​nal/​imf-​asks-​pak-​to-​rene​goti​ate-​cpec-​ene​rgy-​deals-​bef​ore-​mak​ing-​payme​nts-​rpt-​122​0609​0043​ 6_​1.html ). 42 This development was not an original component of the Bretton Woods institutions, however. Rather, it took until 1962 for the World Bank to provide development finance. See David Malone and Rohinton Medhora, ‘Development’ in Jacob Katz Cogan and others (eds), The Oxford Handbook of International Organizations (OUP 2016) 410–​11. 43 Operational Manual, World Bank, para 8.60. 44 See Valerie Volcovici and others, ‘World Bank Revises Climate Policy But Stops. Short of Halting Fossil Fuel Funding’ Reuters (31 March 2021) https://​www.reut​ers.com/​arti​cle/​clim​ate-​cha​nge-​worldb​ ank-​exclus​ive-​int/​exclus​ive-​world-​bank-​revi​ses-​clim​ate-​pol​icy-​but-​stops-​short-​of-​halt​ing-​fos​sil-​fuel-​ fund​ing-​idUSKB​N2BN​3HE. 45 See Vilja Ramachandran, ‘The World Bank and IMF Are Getting It Wrong on Climate Change’ Foreign Policy (11 April 2022) https://​foreig​npol​icy.com/​2022/​04/​11/​the-​world-​bank-​and-​imf-​are-​gett​ ing-​it-​wrong-​on-​clim​ate-​cha​nge/​. 46 Garavini (n 30).

Sub-state Actors  61 markets.47 OPEC member countries discuss the economic and energy global outlooks, based on which the countries make sovereign decisions regarding the supply of petroleum in the world. This process nowadays includes non-​OPEC countries that partner with OPEC under the Declaration of Cooperation signed in December 2016 (commonly known as OPEC+​). Therefore, OPEC member countries, as well as all oil-producing countries, have a role in setting the global supply of petroleum. This coordination has been likened by some to the idea of an illegal cartel that sets anti-​competitive prices to preserve market share.48 This view of OPEC is perilously incorrect. OPEC member states are notoriously creative in their implementation of their decisions.49 Also, current production levels are not going to be increased through new development unless there is a reasonably certain market place for this new production. Further, the cost of development is critical to ascertaining the viability of new projects. Here, the decision of the extent to which financing will be made available has a direct impact on the cost of development. Parties’ suggestion that OPEC can at will increase production ad infinitum to meet demand spikes fail to understand essential elements of global petroleum markets, OPEC’s role in them and essential economic realities and national interests. OPEC has an obvious impact on energy transition by assisting in maintaining the economics of oil in such a way that permit global growth while also encouraging energy transition policies. It is on the whole unlikely that it is possible to set global energy transition policy against OPEC given the current role of oil in the global economy. OPEC and its member states therefore have an important role to play in the design and implementation of energy transition policies.   

V  Sub-​state Actors The Central Role of Sub-​state Actors in Energy Transition Sub-​state actors set and implement energy transition policies. Provinces, federal states, autonomous regions, cities and municipalities are relevant sub-​state actors. Provinces and federal states can have power over energy transition pathways by regulating electric utilities, set emissions standards, and devise and implement independent environmental policy. Cities and municipalities have power over energy transition pathways by zoning and city ordinances regulating business and residential permitting. 47 OPEC Statute, art 2(B). 48 Harry First and Darren Bush, ‘The U.S. Can Take on the Oil Cartel that Enables Putin, and Win’ NY Times (3 June 2022) https://​www.nyti​mes.com/​2022/​06/​03/​opin​ion/​gas-​pri​ces-​rus​sia-​opec.html. 49 For a full discussion of this creativity see Garavini (n 30).

62  Governance of Energy Transition Policies

  

Decisions by sub-​state actors add a crucial layer to polycentric energy transition governance.

Energy policy frequently is local policy as much as national or supranational policy. This section addresses the role regional and local actors have in setting and implementing energy transition policy.

A  Provinces and Federal States In federal states, provinces and federal states have significant regulatory authority. This regulatory authority includes the power to set important energy policies including the regulation of electric utilities and the setting of emissions standards and other environmental policy. The most famous such actor is the US state of California. California has set its own net zero targets and introduced measures that would ban the sale of new internal combustion engine cars.50 California is far from the only state to have enacted important energy policies independently of the national government. Canadian provinces like British Columbia and Ontario have similarly set independent climate and energy policies.51 The Canton of Bern, Switzerland, in September 2021 approved a constitutional amendment to enshrine Cantonal climate neutrality by 2050 as a legal obligation.52 Sabah, Malaysia recently announced efforts to use state powers to assist in the reduction of greenhouse gas emissions.53 The use of regulatory authorities by provincial authorities is a global phenomenon. These provinces and federal states can coordinate their actions with each other independently of their national governments. Again, the most famous such example is an emissions market initiative between several US states and Canadian provinces.54

50 Coral Dacenport and others, ‘California to Ban the Sale of New Gasoline Cars’ NY Times (24 August 2022) https://​www.nyti​mes.com/​2022/​08/​24/​clim​ate/​cal​ifor​nia-​gas-​cars-​emissi​ons.html. 51 Climate Change, British Columbia https://​www2.gov.bc.ca/​gov/​cont​ent/​envi​ronm​ent/​clim​ate-​ cha​nge; Climate Change, Ontario https://​www.onta​rio.ca/​page/​clim​ate-​cha​nge. 52 ‘Switzerland: Voters in Canton of Bern Approve Constitutional Amendment Codifying Climate Neutrality by 2050’ Library of Congress (6 October 2021) https://​www.loc.gov/​item/​glo​bal-​legal-​moni​ tor/​2021-​10-​06/​swit​zerl​and-​vot​ers-​in-​can​ton-​of-​bern-​appr​ove-​con​stit​utio​nal-​amendm​ent-​codify​ ing-​clim​ate-​neu​tral​ity-​by-​2050/​. 53 Ersie Anjumin, ‘Sabah Joins World Commitment on Climate Change’ Straits Times (15 August 2022) https://​www.nst.com.my/​news/​nat​ion/​2022/​08/​822​519/​sabah-​joins-​world-​com​mitm​ent-​clim​ ate-​cha​nge. 54 For a full discussion see Frederic G Sourgens, ‘States of Resistance’ (2019) 14 Duke J Const L & Public Policy 91.

The Private Sector  63

B Cities Cities similarly have an important role to play in energy transition.55 Cities normally do not have significant regulatory authority over energy markets as such because they remain integrated into a larger grid.56 Despite these limitations, cities have significant power through zoning rules and creative use of regulatory authority to encourage behaviour by city residents.57 Cities can reduce emission from the transportation sector by increasing the price for driving on city roads, while also investing heavily in public transportation.58 Cities can require that any new construction be more energy efficient and to include renewable energy generation.59 Cities could further require such generation capacity when issuing permits or licenses to businesses, and so on.60 These regulations can significantly alter the energy landscape and can affect national and global energy markets in potentially unexpected ways. Like states and provinces, cities have built networks to coordinate their regulatory responses and learn from the example of other cities. This network effect is likely to amplify the role of cities in energy transition policy-​making.61

VI  The Private Sector The Benefits and Risks of Private Sector ESG-​Based Participation in Energy Transition The private sector has an independent power to shape and implement energy transition pathways through (1) the management of the greenhouse gas intensity of private sector operations and (2) through private sector finance and investment decisions. The private sector currently manages the greenhouse gas intensity of its operations, internal value chains, and external supply chains and product use through ESG commitments relating to private sector scope 1, scope 2, and scope 3 emissions.

55 Kent E Calder, Global Political Cities: Actors and Arenas of Influence in International Affairs (Brookings Institution 2021) 163. 56 For one example (New York City) see Emily S Rueb, ‘How New York City Gets Its Electricity’ NY Times (10 February 2017) https://​www.nyti​mes.com/​inte​ract​ive/​2017/​02/​10/​nyreg​ion/​how-​new-​york-​ city-​gets-​its-​elec​tric​ity-​power-​grid.html. 57 Jolene Lin, Governing Climate Change: Global Cities and Transnational Lawmaking (CUP 2018) 891. 58 Cities and Climate Change (OECD 2010) 237. 59 Calder (n 55) 147, 200–​202. 60 See ibid 147 (discussing San Francisco’s requirement that new buildings have solar installations). The same logic could be applied to new businesses operating in old buildings—​that is, businesses could be required to retrofit existing buildings with solar capacities or otherwise enter into synthetic power purchase agreements with renewable operators to support renewable power generation in the amount of their actual energy use. 61 About GCCA, Global Cool Cities Alliance https://​globa​lcoo​lcit​ies.org/​about/​.

64  Governance of Energy Transition Policies ESG commitments regarding scope 1 emissions commit a business unit to emission levels by that business itself. ESG commitments regarding scope 2 emissions further commit a business unit to emission levels accounting not just its own direct emissions but also for greenhouse gas emissions coming from its supply chain. ESG commitments regarding scope 3 emissions finally commit a business unit to greenhouse gas emissions attributable to the use of the product or service by third parties. Scope 2 and scope 3 ESG commitments are potentially problematic because they may result in negative development impacts due to the relocation of projects solely to account for electricity generation or consumption profiles in specific jurisdictions, thus amplifying functional differences in sovereign power and sovereign energy equality. Financing and investment decisions on the basis of scope 1 to 3 emissions further amplify the structural impact of private sector decision-​making. Such financing and investment decisions can distort the fiscal balance between developing countries, international project companies and lenders, with regard to energy value chain components with a net redistribution of project income from host states towards financial rents created by the constriction of capital flows to such projects.

  

Private sector participation in polycentric energy transition governance is fruitful when it assists in governing up consistent with the principle of sovereign energy equality.

The discussion so far has focused exclusively on public actors. This misses from view the importance of other actors on energy transition pathways. One such key actor is the private sector.62 A detailed discussion of the influence of the private sector on energy transition pathways is beyond the scope of this chapter. Instead, this chapter will focus on two aspects in which the private sector has an independent ability to shape the realization of energy transition goals, (1) the management of the greenhouse gas intensity of the private sector by the private sector, and (2) the impact of finance and investment decisions by the private sector.

A  Private Sector Emission Management Efforts The private sector has a long history of self-​regulation. In the energy transition context, the most recent iteration of this self-​regulation is the focus by companies

62

See Reisman (n 1) 293–​303 (discussing the role of multinational companies on international law-​making).

The Private Sector  65 on environmental, social, and corporate governance (ESG).63 One of the pillars of ESG programmes regardless of industry is the introduction of corporate zero emission pledges.64 Greenhouse gas emissions are grouped into three ‘scopes’ or types.65 Scope 1 emissions are emissions of greenhouse gases by a specific business or company itself.66 Whether a particular emission is a scope 1 emission focuses on the ownership of or control over the source of the emission.67 Scope 2 emissions are emissions of greenhouse gas in electricity generation by third parties used by the business in its own operations.68 Scope 3 emissions further include greenhouse gas emissions attributable to the use of the product or service by third parties.69 A significant number of businesses have made emissions pledges that include not just scope 1 emissions but also consider scope 2 emissions. Others have been aggressive to include scope 3 emissions—​in part because these businesses can contribute to renewable energy value chains and thus market their climate-​ friendliness.70 These pledges are positive in that they internalize energy transition policies in international corporate chains. This pushes energy policy further down the supply chain and increases the resilience of energy transition pathways and the realization of energy transition goals against political shocks. Scope 2 and scope 3 emissions pledges can also be problematic. A scope 2 emission pledge can lead businesses to make siting decisions between different host states on the basis of local energy policy. This energy policy may be necessitated by local exigencies. It thus does not reward energy policy but rather amplifies contextual accidents. The same holds true with regard to scope 3 emissions. The manufacture of internal combustion engines leads to higher scope 3 emissions. Reducing scope 3 emissions would encourage a stop in their production. This would have a significantly negative impact in jurisdictions that could not electrify transportation due to an insufficient electricity infrastructure. Here, emissions would increase relative to the alternative as such a policy would force older generation engines to stay on the roads to meet demand. ESG emissions reduction pledges therefore are helpful

63 On the self-​regulatory nature of ESG see Stavros Gadinis and Amelia Miazad, ‘Corporate Law and Social Risk’ (2020) 73 VLR 1401, 1439. 64 See C Nicole Sullivan, ‘Balancing the ESG Equation’ (2021) 36 Natural Resources & Env 55, 56 (discussing net zero benchmarking). The author of the article is Assistant General Counsel at BASF. 65 Janet Ranganathan and others, The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (World Resources Institute and World Business Council 2004) 25. 66 ibid. 67 ibid. 68 ibid. 69 ibid. 70 For a critical analysis of the scope and ambition of net zero pledges see Jack Arnold and Perrine Toledano, ‘Corporate Net Zero Pledges: The Bad and the Ugly’ Columbia Center on Sustainable Development (1 December 2021) https://​ccsi.colum​bia.edu/​news/​corpor​ate-​net-​zero-​pled​ ges-​bad-​and-​ugly.

66  Governance of Energy Transition Policies in a broader policy context that is mindful of global energy value chains and economic supply chains. They are problematic outside of that context.

B  Lending and Investment The concerns outlined in the previous section are amplified when investment and lending decisions by private sector actors are measured on an ESG scale. As a general rule, the more types of finance and investors are available for a particular venture, the cheaper the financing and investment cost for the venture becomes. In most instances, this is a measure of risk and return.71 If lending and investment decisions are made on the basis of the scope 1 to 3 emissions of the borrower or recipient of investments, the equation changes drastically. In those circumstances, the cost of finance or investment for a venture with higher emissions is going to increase even if the risk profile of the venture has not otherwise changed.72 There are now fewer lenders or investors available to provide financing or investment. This places willing lenders and investors in a better position vis-​à-​vis the venture: they can expect to receive a higher return on their capital due to the relative lack of lenders or participants. This has four potential effects, only one of which is in fact desired. • First, it distorts global energy markets in favour of better-​capitalized players by eliminating competition from smaller players who have been starved of access to capital at sufficiently competitive rates. This in turn increases the return of large energy companies who now face less competition in energy bid rounds and decreases the state’s fiscal participation. • Secondly, this effect will be regionally amplified with greater distortions in riskier jurisdictions as higher returns are now possible on comparable projects in lower risk jurisdictions.73 Financing decisions on the basis of emissions therefore increase rents in capital exporting countries and decrease them in capital importing countries, all else being equal. • Thirdly, such a shift in markets is likely to invite geopolitical actors with access to capital onto the scene to achieve a strategic realignment. Such actors can 71 See Adam Lapidus, ‘Project Finance Transactions: Managing Interest Rate Risk’ (2020) 137 Banking LJ 428, 429. 72 For a discussion of current practice and the risks it entails see Torsten Ehlers and others, ‘The Pricing of Carbon Risk in Syndicated Loans: Which Risks are Priced and Why?’ Bank of International Settlements Working Paper No 946 (June 2021); Hartley Lefton and others, ‘Risky Business: How Carbon Emissions Are Impacting Lending Behaviour and Access to Capital’ McCarthy (14 October 2021) https://​www.mccar​thy.ca/​en/​insig​hts/​artic​les/​risky-​busin​ess-​how-​car​bon-​emissi​ons-​are-​impact​ing-​lend​ing-​behavi​our-​and-​acc​ess-​capi​tal. 73 See Witold Henisz and Bennet Zelner, ‘The Hidden Risks in Emerging Markets’ Harvard Business Review (April 2010) https://​hbr.org/​2010/​04/​the-​hid​den-​risks-​in-​emerg​ing-​mark​ets.

‘Civil Society’  67 make available finance that will provide significantly more favourable terms than those available on global markets in exchange for strategic influence. • Fourthly, in some cases, it might mean that ventures or projects are not in fact implemented. This would be the goal of increasing the cost of financing of projects with large scope 1 to scope 3 emissions. Importantly, the outcome that emissions heavy projects will not be implemented is not the most likely outcome. To the contrary, it is more likely that the project will still be implemented—​just on terms that are fiscally worse for developing countries and/​or limit their geostrategic discretion in foreign policy questions.

VII  Indigenous Peoples Indigenous peoples affected by energy transition value chains must be consulted in energy transition decision-​making as discussed more fully in Chapter 11.   

Indigenous peoples are a core and important actor in energy transition. The concerns relating to indigenous peoples—​and the definition of indigenous peoples—​ will be discussed in detail in Chapter 11.

VIII  ‘Civil Society’ The Constitutive Role of Civil Society in Energy Transition Governance Civil society is constitutive of all other actors guiding or implementing energy transition pathways (states, international organizations, the private sector, and peoples). Civil society conditions the authority of decision-​making by these other actors.   

Civil society is the determinant whether polycentric governance fruitfully coordinates different governance processes towards a joint goal.

The actors discussed so far in one way or another had a formal or at least direct role in global energy governance. The last actor in energy transition governance lacks such a direct role. At the same time, this last group is constitutive of the other actors discussed so far. This last actor is ‘civil society’. It is reasonably straightforward that civil society is constitutive of states and sub-​ state public actors. These public actors by definition can only authoritatively exercise control to the extent that civil society acquiesces in that exercise of control as fundamentally in line with its expectations of how power is wielded within the

68  Governance of Energy Transition Policies community.74 While current usage of the term is somewhat more colourful than its original Greek legal meaning, one still refers to those who wielded control without such sanction by civil society as ‘tyrants’ some 2,600 years hence.75 Civil society is also constitutive of the private sector. The private sector functions in markets. These markets are nothing without their marketplace—​their agora or forum. Civil society constitutes this marketplace.76 Civil society determines whether crypto-​currencies or tulips find a ready consumer base.77 Civil society determines whether a new product provided by the private sector is the next tulip or the next iPhone.78 In fact, it is the concerns coming from civil society that have largely led to a greater focus on ESG by large multinational companies.79 Civil society therefore has a significant influence on decision-​making. While civil society is constitutive of states, cities, and markets, it is frequently constitutive in a weak sense only. That is, civil society can be comparatively unwilling and unable to resist state and market actors and thus accept as authoritative deeply intrusive conduct by such state and market actors.80 Similarly, civil society can itself become a tool of control—​and sometimes a control tool wielded by state actors.81 To be a meaningful norm actor, civil society will need to be self-​ consciously independent. The global record in this regard is mixed.82 The dislocations caused by globalization and to be caused by climate change discussed in Chapter 2 have further weakened rather than strengthened civil society globally.83 The ability of civil society to participate as a strong partner in energy transition is

74 Reisman (n 1) 284. 75 Donald Kagan, Pericles of Athens and the Birth of Democracy (The Free Press 1991) 12. 76 Philippe Aghion and others, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations (HUP 2021) 300–​10 (discussing the relationship between civil society, markets, and the state from an economic perspective with a view to climate change and energy transition). 77 See Robert Z Aliber and Charles P Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises (7th edn, Palgrave MacMillan 2015) 134–​35 (discussing the Tulip bubble in detail). The role of financing acted as a catalyst for the bubbles. ibid. This catalyst still needed a market to act—​a civil society to enrapture with the promise of personal riches. 78 The iPad (the basis for the later iPhone) is a good example of this dynamic. The idea of tablet computing was not in fact new to Steve Jobs. It had previously arrived and more or less failed on multiple occasions. It is only a slight oversimplification to say that the difference between success and failure was the willingness of society to buy Mr Jobs’ product where it was unwilling to buy Mr Gates’. See Julie Bort, ‘The History of the Tablet, An Idea Steve Jobs Stole and Turned into a Game-​Changer’ Business Insider (2 June 2013) https://​www.busi​ness​insi​der.com/​hist​ory-​of-​the-​tab​let-​2013-​5. 79 See Imogen Rose Smith, ‘The Inconvenient Truth About ESG’ BNY Mellon (May 2020) https://​ www.bnymel ​lon.com/​us/​en/​insig ​hts/​aer ​i al-​v iew-​magaz​ine/​t he-​incon​veni​ent-​t ruth-​about-​esg. html (noting the sustained investor interest in ESG and noting the continued shortfalls caused by non-​standardized data). For a discussion of the same phenomenon from a legal perspective see Brett McDonnell and others, ‘Green Boardrooms?’ (2021) 53 Connecticut LR 335. 80 See Daron Acemoglu and James A Robinson, The Narrow Corridor: States, Societies and the Fate of Liberty (Penguin 2019) 33–​73. 81 See Daniel Mattingly, The Art of Political Control in China (CUP 2019). 82 See Francis Fukuyama, Identity: The Demand for Dignity and the Politics of Resentment (Farrar 2018). 83 See ch 2.

Conclusion  69 therefore hampered by the very need for energy transition even as climate change is creating strong grassroots civil society networks demanding to be heard. Even in this context, civil society is constitutive of energy transition efforts. It is constitutive ‘negatively’ as energy transition policies are bound to test the authority of markets and political institutions. Navigating these challenges can only occur with rather than against civil society. It is constitutive ‘positively’ as energy transition policies benefit from full participation by stakeholders, as will be shown in later chapters. Energy transition depends on civil society in that a successful transition would tend to strengthen it by strengthening human capabilities. Without a strengthened civil society the collective effort needed to see energy transition through may well fail under the collective strain climate change will impose on national and regional economies and social systems.

IX Conclusion This chapter has outlined the main actors that determine the international energy transition pathways open to us. These actors are authors of international norms. At the same time, they are also the subject of the norms in question. The chapter in particular has shown how these different actors interact with each other. It has shown that there is a fundamental tension between the international legal order premised in energy sovereign equality and the many different international and regional orders that compete with this international legal order. The chapter has shown that these actors frequently can act at cross-​purposes with one another. It has also shown that when they act at cross-​purposes, it is unlikely that a sustainable solution to energy transition can be found. This will be further explored in future chapters. Finally, it has shown how, when these actors work together, there is a chance of further strengthening energy transition pathways and to increase their resilience as well. The fundamental premise of this chapter was that any approach to international energy transition must ultimately embrace a bottom-​up, networked approach. Such an approach can in fact invite the different actors discussed in this chapter to the table. When it does so successfully, what results is polycentric energy transition governance. As discussed in this section, such polycentric governance is a key feature of any successful approach to complex resource problems like the energy transition. Having seen the different actors—​and how they might work at cross-​ purposes from each other, it is thus necessary to discuss a real impediment to the project of this book: legal fragmentation.

5

International Law-​making and Fragmentation I Introduction The complexity of the energy transition challenge means that many different areas of international law impact what and how energy transition policies can be implemented. The polycentric nature of energy transition governance increases the potential norm of authors contributing to the development of relevant international legal rules in these areas. Given the number of areas of international law and the diversity of norm authors, energy transition policies are likely to be subject to facially inconsistent international legal norms. This chapter will show that this ‘fragmentation’ of international law indeed frustrates the attempt to conceive a hierarchical, axiomatic international law of energy transition. It will outline that the fragmentation of international law is a consequence of polycentric, bottom-​up governance in international law. Chapter 6 will outline how this fragmentation could be addressed within the energy transition context as a conceptual matter. The chapter will provide a basic primer on how international law functions for a general audience. It will introduce the chief regimes governing energy transition (general international law (and threats to international peace and security posed by energy systems), international environmental law, international energy law, international economic law, international intellectual property law, international human rights law, international indigenous rights law, and international finance and transnational commercial law). As it introduces each new regime, it will present the potential for fragmentation by pointing to the inconsistency between some fundamental values at the heart of each enterprise. The chapter will conclude that overriding the fundamental values of any one enterprise is a dangerous proposition. Each value is weight-​bearing in the international system. Removing such a structural component therefore will have potentially catastrophic governance consequences. The next chapter will then address how it might be possible to harness these regimes towards a common end and thus establish a polycentric energy transition governance approach within the confines of existing law.

72  International Law-making and Fragmentation

II  International Treaty Regimes The Fragmentation of International Treaties in the Energy Transition Context The proliferation and expert-​led nature of contemporary treaty negotiations increases the specialization of international treaty regimes, creating the potential of conflict between different treaty regimes when multiple regimes can be seized of the same subject matter. This conflict makes it possible to observe a fragmentation of international law at the treaty level. Due to the cross-​cutting nature and complexity of energy transition, multiple treaty regimes can collide in the energy transition context. The principal treaty regimes that can collide with each other are:

  

(a) (b) (c) (d) (e) (f) (g) (h)

International climate law; international human rights law; international indigenous rights law; international trade law; international energy law; international investment law; the law of the sea; international humanitarian law.

Article 38 of the Statute of the International Court of Justice codifies the traditional catalogue of sources of international law.1 This catalogue recognizes three co-​equal sources of international law. These sources are (a) treaty obligations, (b) customary international law, and (c) general principles of law recognized by the family of nations.2 International treaties are by far the most straightforward source of international law. Although the analogies are not perfect and remain contested, treaties function like contracts between states (this analogy is most apt for treaties between two states on specific economic matters) or like legislation adopted by states to govern their own conduct (this analogy is most apt for multilateral treaties with complex governance mechanisms like the United Nations Convention on the Law of the

1 Statute of the International Court of Justice, art 38, 33 UNTS 993 (8 April 1946). For a discussion of art 38 see Alain Pellet and Daniel Müller, ‘Competence of the Court, Article 38’ in Andreas Zimmermann and others (eds), The Statute of the International Court of Justice: A Commentary (3rd edn, OUP 2019) 819. 2 Statute of the International Court of Justice, art 38, 33 UNTS 993 (8 April 1946); see also Pellet and Müller (n 1) 819.

International Treaty Regimes  73 Sea).3 The hallmarks of treaties is that states voluntarily agree and submit to their terms.4 Unsurprisingly, modern international law-​making therefore most clearly evokes the image of treaty negotiations. Treaty negotiations traditionally followed a top-​down governance approach.5 Top-​ down approaches stereotypically involved the same actors at ministerial or even head of state level.6 The outcomes were laborious but arguably reflected a consistent policy approach by all involved across treaties.7 Treaty negotiations today frequently follow an approach more consistent with a bottom-​up governance.8 Treaty negotiations today often involve a multiplicity of different stakeholders and allow for a significant amount of flexibility for future development of treaty standards by treaty practice. This is the case both in the context of bilateral, ‘contractual’ treaties and in the context of multilateral ‘legislative’ treaties.9 Thus, in the context of bilateral treaties such as bilateral investment treaties, the treaties in question are typically based on models of one or both of the concluding states.10 The model treaties, in turn, reflect broad commercial input from private industry, labour, and other stakeholders.11 In almost all instances, very little in the treaty text itself reflects a geopolitical compromise negotiated between senior diplomats.12 The treaties in question further use open-​ended provisions permitting for evolution of the actual obligation they impose over time.13 Similarly, multilateral agreements frequently involve significantly greater participation by specialized ministries with significant expertise in the subject matter of the treaties in question. A good example is the current model of multilateral climate negotiations. These negotiations rely as much on foreign ministry officials as they rely on government experts on energy and environment.14 Even within a 3 See Robert Jennings and Arthur Watts, Oppenheim’s International Law: Volume 1 Peace (9th edn, OUP 2008) 1204. 4 ibid 1198. 5 See ch 4. 6 Timothy Meyer, ‘From Contract to Legislation: The Logic of Modern Lawmaking’ (2014) 14 CJIL 559, 569. 7 See Douglas M Johnston, The Historical Foundations of World Order: The Tower and the Arena (Martinus Nijhoff 2008) 728 (discussing the heyday of multilateral treaty-​making of this kind). 8 See ch 4. 9 See Jennings and Watts (n 3) 1204. 10 See eg Ursula Kriebaum and others, Principles of International Investment Law (3rd edn, OUP 2022) 83. 11 See eg Paolo Di Rosa, ‘The New 2012 U.S. Model BIT: Staying the Course’ Kluwer Arbitration Blog (1 June 2012) http://​arbi​trat​ionb​log.kluwer​arbi​trat​ion.com/​2012/​06/​01/​the-​new-​2012-​u-​s-​model-​bit-​ stay​ing-​the-​cou​rse/​. 12 See ‘Flurry of Investment Treaties Signed at UN Forum on Least Developed Countries’ UN News (18 May 2001) https://​news.un.org/​story/​2001/​05/​9652. 13 Santiago Montt, State Liability in Investment Treaty Arbitration: Global Constitutional and Administrative Law in the BIT Generation (Hart Publishing 2009) 3. 14 See eg ‘Joint Statement Between the U.S. Environmental Protection Agency and the Ministry of the Environment of Japan on Continued Bilateral Environmental Cooperation’ EPA (16 May 2016) https://​arch​ive.epa.gov/​epa/​newsr​elea​ses/​joint-​statem​ent-​betw​een-​us-​enviro​nmen​tal-​pro​tect​ion-​age​ ncy-​and-​minis​try-​envi​ronm​ent.html; see also Christian Downie, The Politics of Climate Negotiations, Strategies and Variables in Prolonged International Negotiations (Edward Elgar Publishing 2014) 42–​43;

74  International Law-making and Fragmentation single government there can only be loose coordination between different treaty regimes given the specialized expertise-​driven treaty negotiation process. The negotiation of treaty programmes by different sets of stakeholders within a single government has (unsurprisingly) given rise to potential fragmentation. Such potential fragmentation develops because standards set out in specialist-​negotiated treaty programmes are implemented, applied, and interpreted by specialists as part of the internal implementation mechanisms of these treaties themselves.15 For example, treaties call for dispute resolution before unique specialized bodies, courts of tribunals like investor–​state arbitral tribunals,16 the WTO Dispute Settlement Body,17 or the European Court of Human Rights or the Inter-​American Court of Human Rights.18 Each of these courts and tribunals is increasingly specialized in the specific meaning of the provisions within the respective treaty programmes and refer back to earlier decisions made by the same or similar bodies.19 The same dynamic plays out outside of dispute resolution when legal standards are developed by stakeholders in specialized fora such as the Committee on Economic, Social and Cultural Rights or a conference of the parties under a multilateral treaty.20 This dynamic creates an increasingly self-​referential ‘regime’.21 This process has given rise to a number of treaty regimes that each develop independently from each other. Importantly, in the context of energy transition, these regimes have norms that overlap. This overlap can give rise to significant conflicts. Thus, some of the chief regimes are: Jochen A Frowein, ‘Legal Advice for Foreign Policy in Germany’ (2005) 23 WILJ 25, 29 (‘As far as multilateral treaty negotiations are concerned, the Federal Government has frequently called on experts from the academic community to take part in these negotiations and influence the outcome by their expertise’); Chiara Giorgetti, ‘The Role of Non-​Governmental Organizations in the Climate Negotiations’ (1998) Colo JIEL&P 115, 124–​26 (discussing the role of expertise in environmental treaty negotiations). 15 For a discussion of this phenomenon see Martti Koskenniemi, ‘Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law’ International Law Commission (13 April 2006) UN Doc A/​CN.4/​L.682. 16 Andrew Newcombe and Lluis Paradell, Law and Practice of Investment Treaties, Standards of Treatment (Kluwer 2009) 70–​74. 17 Ruth Mackenzie and others, The Manual on International Courts and Tribunals (2nd edn, OUP 2010); Mitsuo Matsushita and others, The World Trade Organization: Law, Practice, and Policy (3rd edn, OUP 2015) 83–​110. 18 Mackenzie and others (n 17). 19 On this phenomenon see Nico Krisch, Beyond Constitutionalism: The Pluralist Structure of Postnational Law (OUP 2010). 20 Philip Alston, ‘The Committee on Economic, Social and Cultural Rights’ in Frédéric Mégret and Philip Alston (eds), The United Nations and Human Rights: A Critical Appraisal (2nd edn, OUP 2020) 439, 453–​56 (discussing the role of the Committee in developing general comments); Daniel Bodansky and others, International Climate Change Law (OUP 2017) 142. 21 Andreas Fischer-​Lescano and Gunther Teubner, Regime-​Kollisionen: Zur Fragmentierung des globalen Rechts (Suhrkamp 2006). For a shorter English language version of their work see Andreas Fischer-​Lescano and Gunther Teubner, ‘Regime-​Collision: The Vain Search for Legal Unity in the Fragmentation of Global Law’ (2004) 25 MJIL 999. For an insightful reply see Andreas Paulus, ‘Commentary to Andreas Fischer-​Lescano and Gunther Teubner: The Legitimacy of International Law and the Role of the State’ (2004) 25 MJIL 1047.

International Treaty Regimes  75 • International climate law as developed under the UNFCCC, its Kyoto Protocol, and its Paris Agreement.22 • International human rights law as developed under the International Covenant on Civil Political Rights, the International Covenant on Economic, Social and Cultural Rights, as well as regional human rights treaties.23 • International indigenous rights law as developed under the ILO Convention 169, the UN Declaration on the Rights of Indigenous Peoples, and similar instruments.24 • International trade law as developed under the General Agreement on Tariffs and Trade, the General Agreement on Trade in Services, the Agreement on Government Procurement, the Agreement on Trade-​Related Aspects of Intellectual Property Rights, the Agreement on Trade Facilitation, the Agreement on Trade in Civil Aircraft, the Multilateral Agreement on Trade in Goods—​Antidumping, and other WTO Agreements.25 • International energy law as developed under the ECT.26 • International investment law as developed under bilateral and multilateral investment agreements.27 • The law of the sea as developed under the UN Convention on the Law of Sea.28 • International humanitarian law as developed under, for example, the Geneva Conventions.29 These conflicts are particularly salient for energy transition in the context of clashes between climate imperative under the climate regime and other regimes. The climate regime demands the reduction of fossil-​fuel-​based emissions.30 At the same time, such fossil fuel production is protected by international investment law.31 Similarly, the infrastructure depending on fossil fuels is central to the realization of core human rights like the right to food, water, and work.32 ‘Fragmentation’ arises 22 See Bodansky (n 20). 23 See Frédéric Mégret and Philip Alston (eds), The United Nations and Human Rights: A Critical Appraisal (2nd edn, OUP 2020). 24 See James Annaya, Indigenous Peoples in International Law (2nd edn, OUP 2004) 25 See Mitsuo Matsushita and others, The World Trade Organization: Law, Practice, and Policy (3rd edn, OUP 2015). 26 See Kaj Hobér, The Energy Charter Treaty (OUP 2020). 27 See Stephan W Schill, The Multilateralization of International Investment Law (CUP 2009). 28 See David J Attard and others (eds), The IMLI Manual on International Maritime Law: Volume I: The Law of the Sea (OUP 2014). 29 See Ben Saul and Dapo Akande (eds), The Oxford Guide to International Humanitarian Law (OUP 2020). 30 Justin Gundlach and Michael Gerrard, ‘Climate Change and Energy Transition Policies’ in Emma Lees and Jorge E Viñuales (eds), The Oxford Handbook of Comparative Environmental Law (OUP 2019) 531, 554. 31 For a discussion of this tension see Diane Desierto and Frédéric Sourgens, ‘Investment Law and Decarbonization’ in Tade Oyewunmi and others (eds), Decarbonisation and the Energy Industry Law, Policy and Regulation in Low-​Carbon Energy Markets (Hart Publishing 2020) 157. 32 E Christian Brugger, ‘Reflections on the Moral Foundations of a Right to Energy’ in Lakshman Guruswamy (ed), International Energy & Poverty, The Emerging Contours (Routledge 2016) 68.

76  International Law-making and Fragmentation when the key organs (whether dispute resolution organs or consultative bodies) of different regimes make broadly inconsistent demands of states or private actors with regard to the same underlying policy or conduct.33 This fragmentation occurs because these key organs do not perfectly reconcile their own decisions to the demands of organs from other regimes.

III  Customary International Law The Fragmentation of Customary International Law Customary international law is formed on the basis of widespread and representative state practice engaged in by states out of a sense of legal obligation. States engage in attempts at making customary international law for instance through coordinating practice before UN bodies. The attempts by states to crystalize new customary international law can collide and thus lead to fragmentation. This fragmentation is particularly pronounced in the context of decolonialization, impacting customary international legal norms relevant to energy transition.   

Fragmentation is similarly pronounced in the context of human rights and environmental norms.

It is possible to observe the same kind of fragmentation in customary international law. Customary international law is a distinct source of law and formally co-​equal to international treaties.34 A customary rule forms when there is widespread and representative state practice engaged in by states out of sense of legal obligation.35 One establishes the ‘practice’ element by proving how a critical mass of states acts with respect to a particular subject matter.36 One proves that states so conducted themselves out of a sense of ‘legal obligation’ by reference to what states say about their conduct (or could be imputed to say about their conduct, in any event).37 Traditionally, customary international law functioned somewhat like subconscious command. The rules were so obvious to everyone that they were not always

33 Koskenniemi (n 15). 34 Statute of the International Court of Justice, art 38, 33 UNTS 993 (8 April 1946); see also Pellet and Müller (n 1) 819. 35 See North Sea Continental Shelf Cases (Germany v Denmark, Germany v Netherlands) [1969] ICJ Rep 3, 42 (20 February 1969). 36 William Thomas Worster, ‘The Transformation of Quantity into Quality: Critical Mass in the Formation of Customary International Law’ (2013) 31 BUILJ 1. On the concept of critical mass see Adeno Addis, ‘The Concept of Critical Mass in Legal Discourse’ (2007) 29 Cardozo L Rev 97. 37 Ulrich Fastenrath, ‘Relative Normativity in International Law’ (1993) 4 EJIL 305, 325–​26.

Customary International Law  77 well articulated even if they were habitually followed.38 To provide a non-​legal example, most English speakers would instinctively know that the statements ‘he wore pants green’ is grammatically questionable even if the statement ‘he stood on pastures green’ is not.39 Custom traditionally teased out these deep rules of international practice and did not try to create such custom consciously and with intentionality. Since around the end of the Second World War, and thus the beginning of both the Cold War and decolonialization, states and other stakeholders have become more actively engaged in trying to create custom with intentionality.40 Partly, this move can be attributed to the failure of states to achieve constitutive agreements by concluding the kind of sweeping multilateral treaties discussed in the last section. Partly, this move can also be seen to reflect a growing community of states following decolonization—​a community of states that now sought to reject the deeper vestiges of colonialism hardwired into pre-​existing customary international law made without the consent of these new states and, more importantly, without the consent of the communities within those new states.41 States can attempt to create custom by introducing resolutions before the General Assembly of the United Nations.42 Such (successful) attempts have included the Friendly Relations Declaration already discussed in Chapter 4.43 They further include the Resolution recognizing Permanent Sovereignty over Natural Resources.44 These declarations were core parts of the creation of a new international order during decolonization.45 Such resolutions can then be used either as

38 See ibid. That is why the sense of legal obligation had to be imputed. The rules were habitual in the true sense. 39 For a discussion of such examples as legally deeply significant see Rodolfo Sacco, ‘Legal Formants: A Dynamic Approach to Comparative Law (Installment II of II)’ (1991) 39 AJCL 343, 384–​ 85 (using the examples ‘three dark suits’, ‘three suits dark’, and ‘the meadows green’). 40 On this chronology see Michael P Scharf, Customary International Law in Times of Fundamental Change, Recognizing the Grotian Moment (CUP 2013). 41 For a discussion of these moments in the development of international law see M Sornarajah, The International Law on Foreign Investment (3rd edn, CUP 2010) 183. For a deeper philosophical context see Adom Getachew, Worldmaking After Empire: The Rise and Fall of Self-​Determination (PUP 2020) 144–​68. 42 Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion) [1996] ICJ Rep 226, 254–​55. For a discussion of the decision in the broader historical context of International Court of Justice decisions see Jean d’Aspremont, The Discourse on Customary International Law (OUP 2021) 14–​39. 43 See Case Concerning Military and Paramilitary Activities in and against Nicaragua (Nicaragua v US) [1986] ICJ Rep 14, 133 (27 June 1986). It is interesting that the customary nature of the resolutions is somewhat elided (but still implicitly recognized) in some authoritative commentary. See on this score Robert Jennings and Arthur Watts, Oppenheim’s International Law: Volume 1 Peace (9th edn, OUP 2008) 333–​39. 44 Case Concerning Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v Uganda) [2005] ICJ Rep 168, 251 (19 December 2005); see also Pierre-​Marie Dupuy, Ginevra Le Moli, and Jorge Viñuales, ‘Customary International Law and the Environment’ in Lavanya Rajamani and Jacqueline Peel (eds), The Oxford Handbook of International Environmental Law (2nd edn, OUP 2021) 388. 45 Case Concerning Armed Activities on the Territory of the Congo (n 44).

78  International Law-making and Fragmentation evidence of state conduct or as evidence of state statements about the legal obligation to act in a certain manner. Centrally—​ and perhaps counterintuitively—​ customary rules can fragment just as easily as treaty rules. One example of such fragmentation is extreme. It involves the attempt by newly decolonialized states to use their majorities in the UN General Assembly to create a new international economic order.46 Around the same time as this push began, capital exporting states sought to counteract this very order by concluding bilateral treaties that were arguably inconsistent with the General Assembly resolution.47 These states tried to use treaty practice as evidence of evolving customary norms.48 Here, states sought to create the predicate for radically different customary international legal rules governing international economic law. Strictly speaking, these clashes should have been resolved by a more granular understanding of state practice to establish customary rules. State practice should look to state actions in furtherance of UN General Assembly resolutions or a record of realization of bilateral treaty obligations, not the resolution or treaty itself. The statements in the resolution or the treaty are not practice for the primary rule they seek to establish—​they are practice of how resolutions and treaties are negotiated and concluded. Words only exceptionally perform themselves (‘I pronounce you husband and wife’ being a famous example of such exceptional circumstances).49 This distinction is frequently blurred in international legal practice as stakeholders actively seek to use words to reflect practice, be it in different directions. Most examples of fragmentation in customary international law are far less extreme versions of the same phenomenon. That is, there is an attempt by stakeholders to create customary international law by using multilateral mechanisms like international treaty bodies. These attempts ate intended to move international law in a particular direction. In attempting to move international law in a particular direction, there is a risk of fragmentation precisely because there is friction between different simultaneous efforts to influence international law. One such example is the General Assembly Resolution recognizing a right to a clean environment.50 The right to a clean environment includes the right to a 46 See Sornarajah (n 41) 183. For a deeper philosophical context see Adom Getachew, Worldmaking After Empire: The Rise and Fall of Self-​Determination (PUP 2020) 144–​68. 47 For a discussion see Sornarajah (n 41); Andrew Guzman, ‘Why LDCs Sign Treaties that Hurt Them: Explaining the Popularity of Bilateral Investment Treaties’ (1998) 38 VJIL 639; Jason Webb Yackee, ‘Pacta Sunt Servanda and State Promises to Foreign Investors before Bilateral Investment Treaties: Myth and Reality’ (2008) 32 FILJ 1550. For a detailed analysis see Frederic G Sourgens, A Nascent Common Law: The Process of Decisionmaking in International Legal Disputes between States and Foreign Investors (Brill 2015). 48 For a full discussion of the problem see Sourgens (n 47) 260–​62. 49 John Langshaw Austin, How to Do Things with Words (2nd edn, HUP 1975). For a discussion of ‘the husband and wife’ example chosen in this text (although sadly not of #sophiefromromania) see Diane Coyle, Cogs and Monsters: What Economics Is, and What It Should Be (PUP 2021) 23. 50 The Human Right to a Clean, Healthy and Sustainable Environment, GA Res 76/​3000 (28 July 2022) UN Doc A/​76/​L.75 (2022).

General Principles of Law  79 livable climate.51 A universal right to a livable climate would require states to take action to mitigate climate effects of their economies to the maximum extent possible given their current circumstances. This obligation would in principle apply regardless of the developmental status of the state in question.52 While some states may have less relative ability to mitigate climate effects compared to others, they would arguably be obligated to maximize their efforts nonetheless.53 Such an obligation is potentially inconsistent with the principle of differentiated responsibility recognized in climate treaties—​that is, developing states have an obligation to mitigate climate effects to the extent they receive financing from developed countries.54 To the extent they receive no such aid, states would remain within their rights to focus their own resources exclusively on climate adaptation. The right as developed by the General Assembly resolution would be in conflict with the principles developed in the international climate treaty regime. Such clashes can occur because the stakeholders attempting to create custom do not have all the information. Specialized ministries advance their own international mission also through the stimulation of customary norms. They do not always communicate with competing domestic stakeholders. They certainly do not always coordinate with competing global stakeholders. This means that fragmentation can easily occur in the customary international law realm.

IV  General Principles of Law General principles of law can fragment to the extent that relevant comparative legal research asks only a narrow research question and extends principles so derived beyond their reasonable scope.   

General principles of law are a further source of international law.55 General principles of law are established on the basis of comparative law research. This research 51 Olivia Johnson, Carla Lewis, and Janet Whittaker, ‘UN General Assembly Adopts Landmark Resolution on Right to a Healthy Environment’ Clifford Chance (2 August 2022) https://​www.cli​ffor​ dcha​nce.com/​insig​hts/​resour​ces/​blogs/​busin​ess-​and-​human-​rig​hts-​insig​hts/​2022/​08/​un-​gene​ral-​ assem​bly-​ado​pts-​landm​ark-​res​olut​ion-​on-​right-​to-​a-​heal​thy-​envi​ronm​ent.html. 52 See The Human Right to a Clean, Healthy and Sustainable Environment (n 50). The declaration mentions economic development only in a preamble and calls for cooperation in that context. It does not otherwise facially include a direct reference to differentiated responsibility. 53 The idea would be one of progressive realization. See Ben Saul and others, The International Covenant on Economic, Social, and Cultural Rights: Commentary: Cases and Materials (OUP 2014). 54 See eg Philippe Cullet, ‘Differentiation’ in Lavanya Rajamani and Jacqueline Peel (eds), The Oxford Handbook of International Environmental Law (2nd edn, OUP 2021) 319. The point is one of solidarity that subtly distinguishes a regime in which there is common but differentiated responsibility and one in which there is an obligation progressively to realize a human right. See ch 7. 55 Statute of the International Court of Justice, art 38, 33 UNTS 993 (8 April 1946); see also Pellet and Müller (n 1) 819.

80  International Law-making and Fragmentation can determine the existence of a general principle of law generally recognized by state law.56 To the extent that this general principle is generally consistent with existing international law, it functions not just as a rule of domestic law.57 It also functions as a rule of international law. Such principles do not typically lend themselves to active law-​making as domestic laws are passed primarily for a domestic purpose. Yet, the convergence of legislative activity in the environmental and energy sector creates a further possibility to determine the existence of new international legal norms. These norms can fragment for the same reason that customary international law can fragment as the manner in which a comparative legal inquiry is framed can drastically affect the outcome.58 This may to some extent be more of an academic than a real problem. Stakeholders only rarely go to the trouble of seeking to prove a general principle of law.59 Stakeholders tend to be more adept at creating the predicate for customary rules. The reason for this preference is reasonably intuitive—​one affects customary rules through advocacy and lobbying. That is a process that is reasonably well known to stakeholders from the domestic arena. General principles of law are the province of comparative lawyers. Such comparative lawyers are far less likely to be ‘scholactivists’ (a neologism to describe academics engaged in publications for the sake of supporting activism). They certainly are more difficult to move quickly to the recognition of a desired rule. There is thus a functional limitation on the fragmentation of general principles.

V  Unilateral Acts Unilateral acts of states extend norms binding a state internationally beyond traditional sources of international law, creating a potential new forum for fragmentation and norm collision.   

There is an additional means of creating international legal obligations not recognized in the Statute of the Court but instead recognized by the Court in its jurisprudence. The Court has recognized that states can bind themselves by means of 56 Catherine Redgwell, ‘General Principles of International Law’ in Stefan Vogenauer and Stephen Weatherill (eds), General Principles of Law: European and Comparative Perspectives (Hart Publishing 2017) 5, 12–​14 (noting the availability of such research but noting the rarity of such attempts); Fabián O Raimondo, General Principles of Law in the Decisions of the International Courts and Tribunals (Brill 2008) 45. 57 Hugh Thirlway, The Law and Procedure of the International Court of Justice: Fifty Years of Jurisprudence, vol 2 (OUP 2013) 1203–​204. 58 For a discussion of ‘type I’ and ‘type II’ errors (false positives and false negatives) in the comparative legal literature see Matthias Siems, Comparative Law (CUP 2022) 268. 59 Redgwell (n 56) 12–​14.

Unilateral Acts  81 unilateral acts.60 Such acts require a state to take definitive action.61 States must have an intent at the time of taking the action to be bound on the international plane.62 The target audience for the action would reasonably rely on the new obligation imposed by the state on itself in organizing its own affairs.63 When this is the case, the state, having unilaterally bound itself, cannot arbitrarily change course. One important example of such unilateral acts in energy transition is the practice of states to submit nationally determined contributions pursuant to the Paris Agreement, setting out their respective ambitions and programmes to make progress towards the reduction of greenhouse gas emissions.64 These statements are not binding as a matter of the Paris Agreement itself.65 To the extent that a state wishes to give greater comfort to third states, it is possible for it to signal that it considers its unilateral act binding on it and invite reliance on the act.66 One such example is the original nationally determined contribution submitted by the US in the run up to the conclusion of the Paris Agreement.67 This document contained firm commitments, exchanged with key allies, in the form of the Clean Power Plan and its commitment to reduce the reliance by the US on coal-​fired power.68 While the Clean Power Plan never went into effect under US law on the federal level due to its purported reversal by the Trump administration, the US nevertheless met the goals set out in the Clean Power Plan ahead of schedule due to action by sub-​ national and private market actors.69 Many of these actors expressly noted that they were acting to meet the commitments made by the US on the international stage, ie they acted because they recognized a reliance interest in third states.70 Unilateral acts lead to a splintering of binding international norms. Unilateral acts do not need to comply with the domestic constitutional order to be binding 60 Guiding Principles Applicable to Unilateral Declarations of State Capable of Creating Legal Obligations, Report of the International Law Commission, 58th session, UN Doc A/​61/​1, GAOR, 61st session, Supplement No 10 (2006). 61 ibid principles 1, 7. 62 ibid principle 1. 63 See ibid. principle 10. The requirement of reliance vel non remains a contentious issue. A detailed discussion is beyond the scope of this chapter. For more detail see Frédéric G Sourgens, ‘Keep the Faith: Investment Protection Following the Denunciation of International Investment Agreements’ (2013) 11 Santa Clara J Intl L 335. 64 Benoit Mayer, The International Law on Climate Change (CUP 2018) 119. 65 Daniel Bodansky, ‘The Legal Character of the Paris Agreement’ (2016) 25 Rev European, Comparative & Intl Env L 142; Harold H. Koh, Triptych’s End: A Better Framework to Evaluate 21st Century International Lawmaking’ (2017) 126 YLJF 338. 66 Mayer (n 64) 119. 67 See eg Remarks on the Paris Agreement on Climate Change, 2016 Daily Compilation of Presidential Documents 66 (5 October 2016). 68 First US NDC (3 September 2016). 69 Todd Snitchler, ‘How We Passed the Clean Power Plan Target a Decade Early’ Electric Power Supply Association (28 May 2020) https://​epsa.org/​power-​sec​tor-​meets-​clean-​tar​get-​a-​dec​ade-​early-​ tha​nks-​to-​comp​etit​ive-​mark​ets/​. 70 For a full analysis of the first US (intended) nationally determined contribution as a unilateral act see Frédéric G Sourgens, ‘Climate Commons Law: The Transformative Force of the Paris Agreement’ (2018) 50 NYU JILP 885.

82  International Law-making and Fragmentation on the international plane.71 This means that states can bind themselves by way of inconsistent unilateral acts. This is not just a theoretical possibility. Rather, it is a matter of different governmental stakeholders causing the highest-​ranking government officials to make inconsistent representations to different international stakeholders. Thus, a president can promise a foreign investor building a coal-​fired power plant that the plant will be permitted to operate for thirty years. A foreign minister within months can promise that the state in question will phase out all coal-​fired power plants in five years’ time. Under the right circumstances, both promises are unilateral acts, having binding international legal effect. Fragmentation is preprogrammed given that these promises are fundamentally inconsistent with each other.

VI  Conclusion: Polycentric Governance and Fragmentation The potential for fragmentation outlined in this chapter is a direct consequence of the polycentricity of international norm authors.72 Different groups have an ability to impact norm-​making at different levels of global energy transition policy processes. This means that international energy transition appears to fragment precisely along the lines of different stakeholder groups and their impact on the overall norm-​making processes. The overwhelming academic view of this sort of fragmentation is negative. It views fragmentation as a sign of the relative weakness of international norm-​ making processes compared to domestic law in particular. Scholarship (correctly) points out that this fragmentation cannot be brought to heel by using international legal tools alone.73 These legal tools set out priority rules for the interpretation of international legal norms. Thus, the more specific obligation will be given application over the more general obligation.74 The later in time obligation will displace an earlier in time obligation.75 To the extent that it is possible to harmonize different treaty rules that appear to clash with each other, the one that can harmonize or systemically integrate such rule is to be given preference.76 Such legal tools do not stand much of a chance to confront international legal fragmentation. Different stakeholders address the same underlying conduct in 71 W Michael Reisman and Mahnoush Arsanjiani, ‘The Question of Unilateral Governmental Statements as Applicable Law in Investment Disputes’ in Pierre-​Marie Dupuy and others (eds), Völkerrecht als Weltordnung: Common Values in International Law: Essays in Honour of Christian Tomuschat (Norbert P Engel 2006) 409. 72 See ch 4. 73 Fischer-​Lescano and Teubner (n 21). 74 Mark E Villiger, Customary International Law and Treaties (Martinus Nijhoff 1985) 36. 75 ibid. 76 Campbell McLachlan, ‘The Principle of Systemic Integration and Article 31(3)(c) of the Vienna Convention’ (2005) 54 ICLQ 279.

Conclusion: Polycentric Governance and Fragmentation  83 inconsistent manners by drafting different and inconsistent specialized rules. The clash thus is not between a general and a specific rule. To the contrary, the nature of international law-​making leads to a clash between different specialized rules. To declare one more on point is to beg the question how one arrived at that assessment without expressing a preference for the rule one wishes to apply. The different rules are adopted more or less simultaneously, thus making a last in time rule pointless: even if it could be applied at one point, the norm-​making activity of different stakeholders is ongoing, meaning that last in time would lead to a constant flip-​flopping of international legal rules and thus chaos. Systemic integration, further, is likely to be impossible when different norm actors are more or less on collision course with each other. These stakeholders hold on to the primacy of their respective values and would not fairly give an inch to systemic integration of relevant norms—​that is, were it applied, these norm actors would use whatever power available to them to make an end run around the result. (For example, the determination that the Energy Charter Treaty (ECT) is consistent with EU law is leading some EU Member States to simply leave the ECT.)77 The answer to such fragmentation therefore cannot lie in technical rules alone. Rather, it is necessary to reach a functional vantage point from which to assess the different demands and value claims of the relevant norm actors participating in polycentric governance. When one does so, it is possible to look at the phenomenon of fragmentation in a different light. Rather than seeking to harmonize rules, it is necessary to balance and harmonize values of the various norm actors and to do so in a meaningful and active fashion rather than on the basis of a formal application of conflict rules. This recommendation sounds like an exhortation of politics. That is, when there is fragmentation, it sounds like one needs to engage in political discourse to bring about a détente in fragmenting normative forces. Law would have little to do with such an enterprise other than to provide the canvas on which these norm actors express their perspectives.78 While this is certainly one view of international law and fragmentation—​and an important one at that—​it is not the only one. Quite to the contrary, the idea of polycentric governance is a governance ideal, after all. This means that law as a form of ordering is central to it. This centrality of law means that there must be some means by which law as law can bring about a coordination and harmonization of norms governing energy transition. The next chapter provides such an account before then delving into the specific (apparently fragmented) components governing energy transition.

77 Frédéric Simon, ‘Poland Drafts Law to “Terminate” Controversial Energy Charter Treaty’ Euractiv (2 September 2022) https://​www.eurac​tiv.com/​sect​ion/​ene​rgy/​news/​pol​and-​dra​fts-​law-​to-​termin​ate-​ contro​vers​ial-​ene​rgy-​char​ter-​tre​aty/​. 78 For such a position see Krisch (n 19) 296.

6

Polycentricity, Fragmentation, and the Energy Trilemma I Introduction The fragmentation of international legal norms governing energy transition policies is the consequence of polycentric, bottom-​up governance. Specialized networks increasingly determine the content of international legal norms and interpret and apply these norms within a closed regime. Each regime looks to its own expertise as a basis for the predominant value governance ought to maximize. This can lead to significant clashes between specialized regimes touching on energy transition policies.1 Chapter 5 established that there is no ready means of reconciling fragmentation internally; that is, it would suggest that international law in general and the law governing energy transition specifically cannot be reconciled by legal means. Rather, under different regimes the best one can hope for is ‘to creat[e]‌loose relationships between fragments of the law’.2 The relationship between these fragments cannot be legally determined but is rather a matter of politics pure and simple.3 As Gunther Teubner and Andreas Fischer-​Lescano put it with habitual dramatic panache, lasciate ogni speranza.4 This understanding of fragmentation is at odds as a matter of principle with the idea of polycentric governance introduced in Chapter 4. Different norm processes might in fact coordinate with each other in order maximally to realize multiple outcomes at the same time. In this setting, norm processes do not command one to abandon all hope, as Teubner and Fischer-​Lescano suggest. Rather, each legal regime, and each stakeholder community constituting the regime, lends assistance

1 See ch 5. 2 Andreas Fischer-​Lescano and Gunther Teubner, ‘Regime-​Collisions: The Vain Search for Legal Unity in the Fragmentation of Global Law’ (2004) 25 MJIL 999, 1017. 3 Nico Krisch, Beyond Constitutionalism: The Pluralist Structure of Postnational Law (OUP 2010) 283–​96; Martti Koskenniemi, From Apology to Utopia: The Structure of International Legal Argument (CUP 2005) 196. 4 See Fischer-​Lescano and Teubner (n 2) 1017. Teubner and Fischer-​Lescano reproduce Dante Alighieri’s inscription above the entrance to Hell in Canto III line 9 of The Inferno. For an English language translation of the passage see Dante Alighieri, The Divine Comedy (Henry Wadsworth Longfellow trans, Sterling Publishing 2016) 21–​29.

86  Polycentricity, Fragmentation, and the Energy Trilemma to the other and supports it through independent action aimed at a common goal through mutual trust-​building and collaboration. This chapter argues that the apparent fragmentation outlined in Chapter 5 can become a good, polycentric version of mutually supportive fragmentation rather than a race-​to-​norm collision or political confrontation between disparate norm authors and actors. To do so, one must look at energy transition as a holistic process to meet all of the goals outlined in Chapter 2 rather than just some of them. This holistic approach reveals that the goals outlined in Chapter 2 create a governance trilemma of climate imperatives, equitable energy access, and energy security. This trilemma can be resolved only through balancing and not through hierarchical preferences. This chapter outlines that such rebalancing is possible within a legal framework by deploying a correlative rights framework. This chapter will outline the theoretical underpinnings of such an approach. The remainder of the book will then apply this theoretical approach to formulate the international legal principles of energy transition.

II.  The Energy Trilemma and Fragmentation Trilemmas arise when problems respond to three sets of incommensurate demands that are in partial conflict with each other. In a trilemma, maximizing one set of demands can reduce the realization of another set of demands. Proverbially, one cannot have one’s cake and eat it, too. A trilemma would add a competitive dimension to the well-​worn cake metaphor and assume that more than one person has the ability to eat the cake and that each person values eating the cake more than seeing it being eaten by others. At the same time, the point of a trilemma is that too much maximization of any one limb leads to a destruction of a shared resource, leaving everyone with less cake than could have been available. Trilemmas are therefore solvable—​but only to the extent one departs from a logic of self-​centred maximization towards a collaborative approach. Law is a core support beam for such collaboration to occur.5

A  Trilemmas and Commons The Energy Trilemma The regulatory fragmentation of energy transition regimes can be explained by reference to an energy trilemma.



5

Carol Rose, Property and Persuasion (Routledge 2019) 35–​37.

The Energy Trilemma and Fragmentation  87 The energy trilemma describes a situation in which it is facially impossible to maximize three values at the same time (eg the maximization of any one value can lead to the reduction of another and the maximization of two values on its face implies a reduction in the third). In the context of energy transition, it is facially impossible simultaneously to maximize energy equity, energy security, and the environmental sustainability of energy systems.

  

Solving such a trilemma requires a balancing of the different limbs of the trilemma against each other rather than the individual maximization of any one limb on its own even if this results in sub-​optimal outcomes as seen from the perspective of any one limb of the trilemma viewed on its own.

Commons are a well-​known area in which trilemmas can arise. The real-​world problem of water governance in conditions of significant scarcity is a good example.6 Here, there are legal property rights to water.7 The manner in which these property rights are set up precisely determines the conflict between different limbs of the trilemma. To secure one’s own water access, one must appropriate water quickly to avoid weakening one’s own claim. Increasing the speed of appropriation aims to strengthen long-​term water-​security expectations (appropriation sets a relative future use right as against other users as well as a present interest). As everyone acts in the same way, the water reservoir is brought to the point of collapse, risking wasting significant water resources through short-​term competitive overuse.8 Trilemmas can be solved. Incommensurate demands within trilemmas are only in partial conflict with each other. They can be balanced against each other because all participants share a joint interest in the sustainability of the underlying common pool resource. When demands are balanced against each other, allocations create mutually stabilizing support-​beams for the future enjoyment, growth, and development of the resource. Crucially, to achieve such a result requires governance 6 See Burke Griggs, ‘Beyond Drought: Water Rights in the Age of Permanent Depletion’ (2014) 62 Kansas LR 1263; Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Public Actions (CUP 2015) 104–​10. See also Garrett Hardin, ‘The Tragedy of the Commons’ (1968) 162 Science 1243, 1243–​44. This example is ahistorical as kinship and religious tradition in fact imposed effective social constraints on commons use. Francis Fukuyama, The Origins of Political Order (Farrar, Straus & Giroux 2011) 66–​69. 7 Burke W Griggs and James Butler Jr, ‘Groundwater in the American West: How to Harness Hydrogeological Analysis to Improve Groundwater Management’ in Pat Mulroy (ed), The Water Problem: Climate Change and Water Policy in the United States (Brookings Institution 2017) 113, 120. 8 Matthew C Ives and others, ‘Navigating the Water Trilemma: A Strategic Assessment of Long‐ term National Water Resource Management Options for Great Britain’ (2018) 32 WEJ 546; Carol M Rose, ‘Energy and Efficiency in the Realignment of Common-​Law Water Rights’ (1990) 19 J Legal Stud 261, 266.

88  Polycentricity, Fragmentation, and the Energy Trilemma regimes that provide trust-​building incentives for cooperative management of a shared resource.9

B  The Energy Trilemma Energy systems respond to a trilemma. The most obvious limb of the energy trilemma is climate sustainability.10 If energy systems do not respond to climate sustainability, energy systems end up destroying themselves: climate change destroys economic activity and consequently energy demand.11 Climate change obviously has more serious ramifications than the destruction of energy value chains. Still, climate sustainability is a demand internal to energy systems and energy value chains rather than an external constraint placed upon them.12 Energy systems and value chains must be climate compliant to self-​sustain.13 Energy policy must account for environmental and climate sustainability of energy systems and energy value chains as a whole.   

Energy systems can only be sustained if energy is affordable for potential energy users (energy equity).14 Energy users need inexpensive energy access to make economic choices (eg what job to take), social choices (eg where to live), and cultural choices (eg how to communicate).15 If energy systems undermine energy equity through drastic price spikes, energy users are likely to defect from the energy system by means of self-​help (eg Texans buying generators after the 2021 Texas winter storm in record numbers) or through spontaneous social action (the yellow vest protests in France).16 Both negatively affect the potential rate of return 9 Elinor Ostrom, Understanding Institutional Diversity (PUP 2005) 263; Ostrom (n 6). 10 See chs 2, 5; Philippe Sands and Jacqueline Peel, Principles of International Environmental Law (4th edn, CUP 2018) 295–​323. 11 ‘The Turning Point: A New Economic Climate in the United States’ Deloitte (January 2022) (estimating mid-​term costs to US economy alone at US$14.5 trillion) https://​www2.deloi​tte.com/​cont​ ent/​dam/​Deloi​tte/​us/​Docume​nts/​about-​deloi​tte/​us-​the-​turn​ing-​point-​a-​new-​econo​mic-​clim​ate-​in-​ the-​uni​ted-​sta​tes-​janu​ary-​2022.pdf . 12 On the importance of this internal nature of the imperative see Niklas Luhmann, Theory of Society, vol 1 (Rhodes Barrett trans, SUP 2012). 13 Indeed, oil-​producing states have long recognized the need for economic and energy diversification. See Giuliano Garavini, The Rise and Fall of OPEC in the Twentieth Century (OUP 2019) 176. The same is true in the oil industry. See Leonardo Sempertegui and Frederic Sourgens, ‘The Importance of the State-​owned and Private Oil Sector for Successfully Implementing the Energy Transition’ (2021) 67 RMMLF/​FNREL 2. 14 See Daniel Yergin, The New Map: Energy, Climate, and the Clash of Nations (Penguin 2020) 55–​59. 15 This is certainly at the core of the Glasgow Climate Pact’s understanding of development. See Glasgow Climate Pact (CMA.3) 54. 16 Neelam Bohra, ‘Almost 70% of ERCOT Customers Lost Power During Winter Storms, Study Finds’ Texas Tribune (29 March 2021) https://​www.texas​trib​une.org/​2021/​03/​29/​texas-​power-​out​

The Energy Trilemma and Fragmentation  89 for energy investments as they depress the real economy. Without a robust real economy, energy systems fail as there is an insufficient customer base for generation and thus no incentive for further investment in energy systems.17 Sustaining energy equity, like climate sustainability, is an internal demand rather than an external constraint for energy system governance. Energy equity can collide with climate sustainability as already outlined in Chapter 2 (although such a clash is certainly not necessary given that renewable generation is among the cheapest form of new utility scale generation as discussed in Chapter 3).18 Energy systems and energy value chains must provide access to energy, at the lowest possible cost, on a fair and non-​discriminatory basis to foster human and economic development.   

Finally, energy systems require energy security.19 Energy security is threatened when energy systems cannot deliver energy sufficient to meet demand in a predictable, reliable, and resilient manner.20 Energy security is obviously internal to energy systems. Without energy security, energy systems come under significant stress. Avoiding such stress is an inherent internal value for energy systems. Energy security is in potential conflict with environmental sustainability and energy equity as discussed already (Chapter 2).21 At the same time, market-​based energy value chains can at least partially support energy security and climate sustainability.22 Energy systems and energy value chains must reliably and resiliently deliver energy when and where it is needed.   

age-​ERCOT/​; Paul Takahashi, ‘As Generators Fly Off the Shelves After Winter Storm, Some Texans Opt to Build Their Own DIY Version’ Houston Chronicle (14 June 2021), https://​www.houst​onch​roni​ cle.com/​busin​ess/​arti​cle/​Home-​genera​tor-​dem​and-​along-​with-​ingenu​ity-​16244​832.php; Mathilde Martin and Mine Islar, ‘The “End of The World” vs. The “End of The Month”: Understanding Social Resistance to Sustainability Transition Agendas—​A Lesson from the Yellow Vests in France’ (2021) 16 Sustainability Science 601. 17 Abhijit V Banerjee and Esther Duflo, Good Economics for Hard Times (Public Affairs 2019) 188. 18 See chs 2 and 3. 19 Daniel Yergin, ‘Ensuring Energy Security’ (2006) 85 Foreign Affairs 69; Yergin (n 14) 59, 84–​89, 160 (discussing US, Chinese, and EU energy security concerns). 20 For a detailed analysis of energy security see ch 9. 21 See ch 2. 22 See Yergin (n 19) 69; Yergin (n 14) 59 (discussing US shale through an energy security lens); Pamela Barnes and Ian Barnes, The Politics of Nuclear Energy in the European Union, Framing the Discourse, Actors, Positions and the Dynamics (Barbara Budrich Publishers 2018) 94–​116.

90  Polycentricity, Fragmentation, and the Energy Trilemma

C  Polycentric Energy Commons Governance Balancing the demands of the energy trilemma requires a context-​driven, development-​ focused coordination of overlapping decision-​ making processes involving all actors drafting and implementing energy transition policies and norms.   

The kind of inconsistency between values underlying a trilemma suggests two things: first, fragmentation is likely to occur (and in fact it does occur along the lines outlined Chapter 5); secondly, it is the kind of fragmentation that lends itself to polycentric governance. Trilemmas lead to fragmentation because different norm actors align more closely with one limb of the trilemma.23 In the context of the energy trilemma, this means that some norm actors will champion norms that are more aligned with energy equity concerns, while others will champion energy-​security-​ based norms or energy-​sustainability-​based norms.24 At the same time, these conflicts can be resolved and fragmentation harnessed into polycentric governance. Any solution to a trilemma that does not balance the incommensurate values founding the trilemma is not internally stable. Each limb of a trilemma, if ignored, can cause the collapse of the entire enterprise subject to the trilemma. Energy systems fail to the extent that energy systems are not environmentally sustainable and equitable and secure.25 In the final analysis, it is in the ultimate self-​ interest of all norm actors to cooperate with each other despite their different value preferences. It is this drive to cooperation that permits commons governance to take hold.26 Actors internalize all three values of the trilemma in their own semi-​independent norm processes differently. Polycentric governance therefore ends up supporting the same overall idea of ‘trilemma equilibrium’ even if each attempt accomplishes a different, context-​dependent equilibrium point. Like a street artist climbing on top of chairs balancing one on top of another, each successive chair will have different a tilt than the one beneath it. However, even as each balance point is different, the chair tower must balance as a whole or not at all. Like the climbing street artist, this balancing of energy governance must be dynamic because energy systems themselves are not stable. Energy systems are subject to internal or ‘endogenous’ growth cycles within the energy industry that constantly disrupt supply patterns through innovation. Two such recent disruption included (1) the rapid decrease in cost of producing oil and



23

See section A below. See chs 4, 5. 25 See section B below. 26 Rose (n 5) 35–​37. 24

Three Legal Principles  91 gas from shale, and (2) the rapid decrease of the price of utility scale solar facilities.27 Energy systems further are embedded in the heart of the real economy.28 They internalize economic predictions about future economic growth (and thus demand) patterns in long-​term decision-​making.29 These predictions can be incorrect.30 This disrupts supply pattern in energy systems simply as a function of the typically large and long-​term investment decisions in the energy sector. This alone means that energy governance is subject to basic market cycles—​something that swings in oil prices, for example, in the twenty-​first century readily suggest.31 At the same time, the balancing of energy governance must account for external or ‘exogenous’ shocks. These shocks include the disruption caused to energy systems by wars. These shocks also include policy decisions to intervene in energy systems to redirect them (eg energy transition). These exogenous shocks heighten the volatility in energy systems, underscoring again that balancing energy governance is not a ‘one-​off ’ task but rather a constant process of decision-​making by the core stakeholders and norm authors governing energy systems to keep a viable course for energy systems in the face of significant internal and external turbulence. This leaves the question of how to accomplish such a balance. The answer is one that is in fact reflected in legal logic—​the logic of correlative rights. Rather than having a fragmenting order that is shaped exclusively by politics and political norm collisions, it makes sense to speak of distinctly legal principles as a means of energy transition governance; pace Gunther Teubner and Andreas Fischer-​Lescano, not all hope is lost, after all.32

III  Three Legal Principles The polycentric governance of energy transition pathways can rely on the commons governance principles of correlative rights, reasonable use, and waste.   

Three legal principles can help to rebalance the energy trilemma. These three legal principles are the principles of (a) correlative rights, (b) reasonable use, and

27 See generally Philippe Aghion and Peter Howitt, Endogenous Growth Theory (MIT Press 1998). 28 For a provocative account for the link between energy systems, the real economy, and political decision-​making see Timothy Mitchell, Carbon Democracy: Political Power in the Age of Oil (Verso 2013). 29 For such modelling see World Oil Outlook 2045 (OPEC 2022). 30 For example, the 2008 Financial Crisis was not widely predicted. See Jeremy Siegel and others, ‘Why Economists Failed to Predict the Financial Crisis’ Knowledge at Wharton (13 May 2013) https://​ knowle​dge.whar​ton.upenn.edu/​arti​cle/​why-​eco​nomi​sts-​fai​led-​to-​pred​ict-​the-​financ​ial-​cri​sis/​. 31 ‘Global Price of Brent Crude’ Federal Reserve Economic Data (FRED) Federal Reserve Bank of St Louis (3 January 2023) https://​fred.stl​ouis​fed.org/​ser​ies/​POIL​BREU​SDM. 32 Fischer-​Lescano and Teubner (n 2) 1017.

92  Polycentricity, Fragmentation, and the Energy Trilemma (c) waste. While these principles are deeply rooted in law—​without them, a regime of property law would be hard to imagine—​the point here is not to derive general principles that would be applicable as such to energy transition. Rather, the point is that a legal reconciliation of normative fragmentation occurring in the context of the energy trilemma is indeed possible. Before delving into each of the separate ideas, it is prudent to explain the assertion that, without them, any idea of property law would be hard to imagine. A hermit has little need for property law. He or she lives alone and, as such, his or her claim to use or ownership rights is practically unchallenged and purely metaphysical (or theological).33 The idea of ‘property’ makes sense only in community. Once there is community, the idea of full ownership to the exclusion of community can never quite be absolute. The very point of property law is to delimit what is mine from what is autrui’s. This entails that nothing can be absolutely mine. If it were, there would be no need for delimitation. In actuality, property rights must therefore be relative.34 If property rights are by nature relative, it is natural that property law would develop notions of correlative rights, reasonable use, and waste. Correlative rights make visible the relative nature of property. Reasonable use defines the outer limits of someone’s property rights in their community. And waste defines someone’s duties to their immediate neighbours and their successors. These principles balance the energy trilemma because each limb of the trilemma ‘lives in community’ with the others. A limb of a trilemma of necessity can only exist if it is accompanied by the others. The presence of one entails the presence of the others. To say that something is affordable is to ask for how long it might remain so. This question entails concerns of sustainability as well as security. To say that something is secure is to say that it will not disappear for environmental reasons and can in fact be reliably (that is affordably) produced over long durations of time. To care about environmental sustainability entails action in the world for the benefit of society—​and this benefit is measured again in terms of affordability and security. If limbs of a trilemma live ‘in community’ with each other, the principles of property law governing incommensurable property interest should be instructive to balancing the incommensurability inherent in the trilemma relationship. Each limb would be like a separate property owner owning in a shared community with the other limbs. Correlative rights, reasonable use, and waste would therefore help

33 That is not to say that such metaphysical questions were not deeply important to the development of the history of ideas. See Richard Tuck, Natural Rights Theories, Their Origin and Development (CUP 1979) 20–​22 (discussing the disagreement on natural dominium, properietas, possessio, usufructus, ius utendi, and simplex usus facti between Dominicans and Franciscans in the thirteenth century). 34 One intriguing argument is that property rights are not only relative but also of necessity communicative. See Nestor Davidson, ‘Property and Relative Status’ (2009) 107 MLR 757, 760.

Three Legal Principles  93 to conceptualize how we might facilitate property ownership in such a community into the future without destroying the very resources we care about. Importantly, these very concepts are also relevant to energy law. Property law is always close at hand when energy value chains are at issue. Energy depends on resource extraction.35 Resource extraction is one of the most salient areas in which correlative rights, reasonable use, and waste have developed. To say that energy is a matter of correlative rights, reasonable use, and waste therefore should be intuitive to lawyers in the field.

A  Correlative Rights and Reasonable Use Correlative rights arise when different stakeholders hold facially independent property rights in a manner so that the ability to exercise their respectively own property rights is affected by the exercise of their own potentially conflicting property rights by other stakeholders.   

The first fundamental principle of commons governance is the correlative nature of rights. Correlative rights require reasonable use by correlative rightholders of their rights. Reasonable use is a property law principle.36 This property law principle is a general principle of law.37 The reasonable use general principle governs the enjoyment of ‘correlative rights’.38 Correlative rights are rights that are held by a number of persons each as individual rights. These individual rights can only be realized at all to the extent that the other rightholders use their own rights in a reasonable and cooperative fashion.39 The law of nuisance is at the heart of correlative rights.40 The law of nuisance requires anyone to desist from the unreasonable use of a right to the extent it does harm to others.41 What is ‘unreasonable’ is defined by the standards of the community of relevant correlative right holders.42 Nuisance is well-​known in the common 35 See ch 3. 36 Griggs and Butler (n 7); on the development of reasonable use in the water law context see also Rose (n 5) 165–​68. 37 For a full derivation of this general principle see Frederic G Sourgens, ‘Cyber-​Nuisance’ (2021) 42 PJIL 1005. 38 Rose (n 5) 165–​68, 175. 39 ibid. 40 Ravan v Greenville County 434 SE2d 296, 306 (Court of Appeals, South Carolina 1993); Joseph A Schremmer, ‘Pore Space Property’ (2021) Utah LR 1, 6; Laura Spitz and Eduardo M Peñalver, ‘Nature’s Personhood and Property’s Virtues’ (2021) 45 HELR 67, 91. 41 Jill M Fraley, ‘Liability for Unintentional Nuisances: How the Restatement of Torts Almost Negligently Killed the Right to Exclude in Property Law’ (2018) 121 West Virginia LR 419, 451. 42 Case Civ A 44/​76 Ata Textile Company Ltd v Schwartz 30(iii) PD 785 (1976) (Israel).

94  Polycentricity, Fragmentation, and the Energy Trilemma law of property and in mixed jurisdictions. It is also at home in civil law jurisdictions. Here, it has been theorized invariably as abus de droit, troubles de voisinage, or through the extension of Roman law actions such as the actio negatoria.43 The same principle is also well-​known in non-​Western legal systems such as shari’a and also underlies contemporary principles of Chinese law and legislation.44 Reasonable use in principle gives rise to a negative obligation to desist from unreasonable uses as well as some positive obligations affirmatively to use property in a reasonable manner. Use is reasonable if it is consistent with community standards such that ‘the rights [of correlative right holders] facilitate full and proper development of [shared] resources’.45 Reasonable use therefore implies an obligation of reasonable participation in the development and the upkeep of the shared resource. This conclusion is an express component of reasonable use in the commons literature.46 It also reflects the state of nuisance law pursuant to which correlative rights can be enforced.47 The exercise of correlative rights requires the reasonable use of one’s own rights in a manner that is consistent with the community standards set by the community of stakeholders holding correlative rights.   

Reasonable use is not a fault-​based standard. A person does not have to act negligently.48 Rather, such a person can act with the maximum prudence possible.49 Yet, owing to the effect of the use of the right on the rights of others, the use of the right can nevertheless be deemed unreasonable.50 Reasonable use therefore does not consider the unreasonable use of a right by a rightholder to be a wrongful act. Instead, reasonable use demands more than not acting wrongfully. It demands cooperation towards the joint realization of rights when any one person’s enjoyment of such rights depends on the conduct of others.

43 Zigurds L Zile, ‘Judicial Control of Land Use in France’ (1960) 45 Cornell LR 288, 289; Annie Chamoulaud-​Trapiers, Droits des Biens (2nd edn, Breal 2007) 167; Tikhon Podshivalov, ‘Models of Actio Negatoria in the Law of Russia and European Countries’ (2019) 7 Russian LJ 128, 133; Eugene Petit, Traité Élémentaire du Droit Romain (Librairie Novelle de Droit et de Jurisprudence 1906) 773. 44 Guiguo Wang and Wei Zhenying, Legal Developments in China: Market Economy and Law (Sweet & Maxwell 1996) 414; Richard Zhang and Benoit Mayer, ‘Public Interest Environmental Litigation in China’ (2017) 1 Chinese J Envl L 202; Omar A Bakhashab, ‘Islamic Law and the Environment: Some Basic Principles’ (1998) 3 Arab L Quarterly 287, 287–​88. 45 David E Pierce, ‘Developing a Correlative Rights Doctrine to Accommodate Development of Oil and Gas in Arkansas’ (2015) 68 Arkansas LR 407, 420. 46 Ostrom (n 6). 47 Michele Steinberg and Meghan Housewright, ‘Addressing Vacant Property in the Wildland Urban Interface’ (2019) 55 Idaho LR 59, 74. 48 Fraley (n 42); Chamoulaud-​Trapiers (n 43) 167. 49 See Ata Textile Company Ltd v Schwartz (n 42). 50 ibid.

Three Legal Principles  95 Finally, reasonable use standards are dynamic that change with community standards. Reasonable use tracks and governs use patterns ‘in real time’. Reasonable use standards are therefore a particularly helpful legal governance tool in the context of rapidly changing circumstances.51 Reasonable use of correlative rights causes norm actors to understand and internalize the normative pull of all three values of the energy trilemma, rather than demanding an outright preference for one such value.52 The principle of reasonable constrains preference—​any preference cannot lead to an unreasonable impairment of other values within the trilemma so long as a path is available that leaves all values better off.53 Energy systems rely on the coordinated and reasonable use of a fundamentally shared bundle of resources that make energy systems work. Energy systems are heavily interdependent and require coordinated use for anyone to have reasonably secure access to energy. The reasonable use of energy resources is a precondition for their proper functioning.54 The proper functioning of energy systems and energy value chains is crucial to the realization of rights because of the central role that energy plays as an engine for the global economy.55 But just as importantly, energy access is central to access to communication (and therefore sociability) and education (and therefore culture).56 Because of this fundamental nature of energy to our very way of life, any policy choice affecting energy transitions deeply affects world society as a whole. A failure by stakeholders in a community of correlative rightholders to use their rights reasonably can lead to both the short-​term impairment and the long-​ term destruction of any ability to use energy systems or energy value chains by energy system participants.   

The failure of coordinated and reasonable use of energy systems is destructive in both the short and the long term. Exogenous shocks can inflict significant 51 One famous example is Spur Industries v Del E Webb Development Co 494 P2d 700 (Ariz 1972). For a discussion of the relevance of the case in the renewable energy context see Troy A Rule, ‘A Downwind View of the Cathedral: Using Rule Four to Allocate Wind Rights’ (2009) 46 San Diego LR 237, 237–​38. 52 In this sense, it helps to avoid peril of hierarchies and their inversion leading to inevitable instability within a given discourse. See Jack Balkin, ‘Deconstructive Practice and Legal Theory’ (1987) 96 Yale LJ 743, 746–​72. 53 This is reasonably close to a requirement of Pareto optimality in that a course of action may not leave one value relatively worse off. To the extent that all values necessarily are made worse off, it is possible to posit a ‘least worse off ’ course of action that protects against the worst reduction of outcomes of any one value. Other preferences remain possible. Amartya Sen, Development as Freedom (Anchor Books 1999) 117. Each of these configurations could make use of a reasonable use of correlative rights logic. 54 This is true even in the context of traditional oil and gas resource management in the context of privately owned mineral rights. See David E Pierce, ‘Carol Rose Comes to the Oil Patch: Modern Property Analysis Applied to Modern Reservoir Problems’ (2011) 19 Penn State Env LR 241. 55 See ch 3. 56 ibid.

96  Polycentricity, Fragmentation, and the Energy Trilemma short-​term economic pain and cause a realignment of energy markets.57 They can have mid-​term to long-​term consequences as energy value chains attempt to rebalance supply with demand.58 In both instances, defection from global energy value chains can permanently degrade these value chains. At the same time, reasonable use of energy systems is mutually reinforcing and stabilizing. Energy markets become more resilient the more coordinated actors in the energy market conduct themselves. Such coordinated action reduces uncertainty and builds trust. This trust is a condition for the polycentric governance of energy systems.59 Stable energy systems in turn allow for reliance interests from the real economy in energy systems to form. The possibility of such secure reliance interests allows bottom-​up networked governance of energy systems to bear fruit. Reasonable use is thus central to a governance logic capable of ‘defragmenting’ global legal principles governing energy transition.

B Waste Stakeholder holding correlative rights must refrain from a use of their rights in such a way that reduces the present or future sustainability of energy systems themselves.   

The third principle of commons governance is the prohibition of waste.60 The prohibition of waste is the opposite of reasonable use.61 The principle of reasonable contains both positive obligations of cooperative maintenance and negative obligations to abstain from unreasonable conduct.62 One core negative obligation correlative rightholders owe each other is to avoid waste. Use of a resource as to which rightholders hold rights correlatively that creates waste is unreasonable because it leads to waste. Waste is unreasonable use. The concept of waste is helpful because its logic operates along two axes crucial for energy transition. First, waste classically applies to temporal correlative

57 See Giuliano Garavini, After Empires, European Integration, Decolonialization, and the Challenge from the Global South 1957-​1986 (Richard R Nybakken trans, OUP 2012) 201–​40 (situating earlier north–​south dialogues in a broader energy systems picture). 58 Josefine Fokuhl and Todd Gillespie, ‘Germany Revives Coal as Energy Security Trumps Climate Goals’ Bloomberg (21 December 2022) https://​www.bloomb​erg.com/​news/​artic​les/​2022-​12-​22/​germ​ any-​retu​rns-​to-​coal-​as-​ene​rgy-​secur​ity-​tru​mps-​clim​ate-​goals#xj4y7v​zkg. 59 Ostrom (n 6) 172–​73 (discussing how trust can be built by light external nudging to realign norm actor expectations). 60 See Monika U Ehrman, ‘One Oil and Gas Right to Rule Them All’ (2018) 55 Houston LR 1063, 1069. 61 See Michael Pappas, ‘Anti-​Waste’ (2014) 56 Arizona LR 741, 776. 62 Rose (n 5) 217.

Three Legal Principles  97 rightholders holding sequential present and future interests—​ie future generations.63 Secondly, waste also applies spatially to correlative rightsholders holding correlative rights at the same time. Here, the concept of ‘waste’ is typically a public rather than a private law concept. However, even this public law concept has private law origins in the idea of correlative rights and reasonable use and therefore is helpful in explaining what ‘waste’ is.64 There are three forms of waste. First, waste can occur ‘voluntarily’ or ‘affirmatively’:65 a rightholder acts with purpose to diminish the value of a shared resource (clear-​cutting of a forest by a holder of a life estate). Secondly, waste can occur ‘permissively:’66 a rightholder impairs the property by omitting to act (disrepair).67 Finally, waste can be ‘ameliorative’ when property is altered to the apparent improvement of property.68 Here, the question of waste is a choice to which property can be put in the future. What comparator to use to establish waste is controversial. This problem is particularly pronounced in the context of ameliorative waste.69 The question of what constitutes ‘destruction’ and what constitutes ‘improvement’ is largely a question of how one goes about valuing (eg conservation versus economic growth).70 The law has not consistently used a single yardstick even within a single tradition—​ let alone across different legal traditions.71 For ‘waste’ to present a valuable addition in the current context, it is therefore important to explain its purpose and then to address how the apparent conflict might be functionally resolved. The reasonable use of correlative rights looks to the conduct of the user in the first place. It looks to the shared resource in which correlative rights are held to determine the rights of a person with a property interest in the resource. Waste intriguingly is not about the user but about the resource

63 See John A Lovett, ‘Doctrines of Waste in a Landscape of Waste’ (2007) 72 Missouri LR 1209; Jedediah S Purdy, ‘The American Transformation of Waste Doctrine: A Pluralist Interpretation’ (2006) Cornell LR 653, 658. 64 Rose (n 5) 126: ‘[C]‌ustom, in short, can tame and moderate the dread rule of capture that supposedly tends to turn every common into a waste’. This ‘prevention of waste’ concerns public rights (as opposed to private rights). As David Pierce explains, ‘[t]raditionally, public rights in oil and gas have been created by state oil and gas “conservation” laws. Therefore, any definition of private rights in oil and gas must also account for the public good element of oil and gas’. David E Pierce, ‘Carol Rose Comes to the Oil Patch: Modern Property Analysis Applied to Modern Reservoir Problems’ (2011) 19 Penn State Envl LR 245. 65 See Samuel Niiro, ‘An Injury to the Inheritance: Locating an Affirmative Obligation to Climate Adaptation in the Law of Waste’ (2019) 52 Columbia J Law & Social Probs 653, 664. 66 Jill M Fraley, ‘Modern Waste Law, Bankruptcy, and Residential Mortgages’ (2019) 41 Cardozo LR 535, 535–​39 (noting also the erosion of the distinction). 67 ibid. 68 For a masterful discussion of ameliorative waste from a comparative law vantage point see Sally Brown Richardson, ‘Reframing Ameliorative Waste’ (2017) AJCL 335. 69 ibid. 70 ibid 377–​78. 71 ibid.

98  Polycentricity, Fragmentation, and the Energy Trilemma itself. The purpose of waste is to preserve the resource in its own right. Waste concepts impose positive obligations on property rightholders simply by virtue of their ownership interest. To see waste as centred on the resource allows a different functional lens.72 Functionally, the use of a resource can create waste in two related ways. First, use can destroy the resource base. Over-​extraction from a water or oil reservoir can cause the reservoir itself to collapse.73 If the reservoir collapses, the remainder of the water or oil that could have been produced is lost. The destruction of this resource base is clearly wasteful.74 It is wasteful despite the fact that no one owner acts wrongfully or with fault. Rightholders simply seek to use their rights for otherwise ordinary personal gain and do not act so as to intentionally bring about the collapse of the reservoir. It is further wasteful despite the fact that no one correlative rightholder individually caused the collapse. Waste imposes obligations to refrain from collective as well as individual use. Use is finally wasteful despite the fact that it is not negligent. The destruction of the reservoir occurs precisely because all correlative rightsholders act precisely like each other in seeking to extract their share of the resource as quickly as possible. Their conduct therefore cannot be said to violate a duty in tort or delict. Waste, in other words, is principally a property law principle because it attaches to the maintenance of correlative property rights as such and does not attach to personal conduct. Secondly, use of a resource can lead to the loss of a share of a resource even if it does not destroy the resource base. Over-​extraction can trap part of the resource as to which rightholders hold rights correlatively even without destroying the resource base completely. In this setting, collective action places some of the resource beyond the ability of any rightholder to produce. This trapping of a resource is similarly wasteful. It is wasteful despite the fact that it, too, is not intentional, is the result of collective action rather than individual conduct, and is not negligent. To avoid waste requires collective action—​collective action that again benefits all because rights can only be sustainably enjoyed together. That is the case even when those in a resource community enjoy their rights competitively. The correlative rightsholders in an oil reservoir may very well compete with each other to maximize their respective share from the reservoir. But they can only compete with each other by cooperating with each other as non-​cooperative conduct risks to bring down the reservoir as a whole. Cooperation therefore can go hand in

72 It is also possible to return waste to a rightholder perspective rather than a resource perspective. ibid 382. This shift would to some extent tend to collapse waste into correlative rights completely—​but would place a premium on understanding future interest holders as correlative rightsholders. This shift is less helpful in the current context of preserving energy systems as such. It is this functional reason that we propose a different resolution of the comparator for waste. 73 Ostrom (n 6) 103–​10; Rose (n 5) 127. 74 Ehrman (n 60) 1069.

Three Legal Principles  99 hand with some competition. It just needs to be creative rather than destructive competition.75 Energy transition requires cooperation across energy equity, energy security, and energy sustainability to avoid waste. Such waste could have catastrophic consequences all the way to the collapse of the underlying energy systems. Avoiding such waste requires tools to secure reasonable cooperative uses of energy resources and to the progressive realization of what those resources support. This understanding of the principle of waste, like the principle of reasonable use of correlative rights, helps to coordinate action in the energy trilemma. It sets limits for the competence of actors. It does so not through the lens of the rights and interests of other actors, but based on the preservation of the shared resource itself (energy systems, writ large). These limits are premised in a full realization of the resource. This means that the idea of waste adds a layer of positive duties of upkeep of the shared resource so as to allow its full realization into the future. Waste is more than a negative constraint—​it is also a positive, resource-​centred mandate. This mandate introduces the core element of inter-​generational sustainability of resources (here energy systems) into de-​fragmenting legal principles governing the energy transition. This dimension is critical to the legal principles discussed in the following chapters. Waste importantly can do so while anchoring intergenerational sustainability concerns in energy systems themselves. It thus provides a means to guide energy transition internally and provide an energy system internal logic for future governance.

75 In the beginning of a new energy paradigm, such creative competition requires coordination between competitors typically prohibited by competition law. At times, this coordination was the purview of regulators such as the Oklahoma Commerce Commission and the Texas Railroad Commission in the early days of oil development in the US. See Daniel Yergin, The Prize, The Epic Quest for Oil, Money and Power (Free Press 2008) 232–​34. At other times, this coordination occurred at corporate level in the shadow of competition law enforcement. See Mitchell (n 28) 55. At yet other times, this coordination occurs on the inter-​state level. See Garavini (n 13) 216–​53. In all cases, the logic of such creative coordination remains fundamentally consistent with the ideals of competition law. It serves to protect marketplaces within which competition sustainably can take place as waste destroys markets. Waste thus also provides a criterion for competition law enforcement—​if coordination itself creates waste or an unreasonable use of resources, it can no longer be justified on this basis.

PART II

T HE E N E RGY T R A NSI T ION PR INC IPL E S

7

The Climate Principles I Introduction This part introduces the substantive international legal principles governing energy transition. This chapter will outline five principles from international climate law that are of critical importance for the governance of energy transition. These principles are: (1) the climate-​specific no harm principle; (2) the sovereign choice of means principle; (3) the principle of climate-​specific common but differentiated responsibility as cooperation; (4) the climate impact assessment and monitoring principle; and (5) the climate-​specific precautionary principle. These principles are by no means the only principles of international climate law. Most centrally, principles of climate law dealing with adaptation to climate change do not feature directly in the climate law principles examined in this chapter.1 Adaptation related principles are discussed in the context of other chapters. This chapter must therefore should not be read in isolation. It must be considered in the context of what follows. As outlined in the following chapters, energy transition must follow facially inconsistent principles. This means that the principles outlined here must be viewed in the context of the whole of the principles developed in this part. Importantly for this work of reconciling the disparate international legal principles governing energy transition, this chapter will relate back the principles developed here to the correlative rights lens developed in the last chapter. This link is intended as a thread to guide the reader through the substantive principles developed in this part. This leaves the question of methodology—​how does this chapter propose to develop principles of climate law that are relevant for energy transition? The chapter is guided first and foremost by the development of climate law itself. It will therefore anchor the principles developed here in the relevant provisions of the Paris Agreement, the Katowice Protocol, and the Glasgow Climate Pact. It will place these principles in their historical context as climate law developed over time. It will explain how these climate law principles relate to and differ from their originator principles in general international law and international environmental law. This historical view is intended to aid in an understanding of the principles as they 1 See Paris Agreement, art 7; Irene Suárez Pérez and Angela Churie Kallhauge, ‘Adaptation (Article 7)’ in Daniel Klein and others (eds), The Paris Agreement on Climate Change: Analysis and Commentary (OUP 2017) 196.

104  The Climate Principles sit today so as to orient the reader about the potential for false friends even within international environmental law (common but differentiated responsibility in climate law is not necessarily the same concept as elsewhere in international environmental law). The point then is to provide an authoritative assessment of where climate law stands today in relation to energy transition governance processes. This chapter will do so by going principle by principle. Yet, these principles are introduced in order so as to reveal the conceptual linkages between them and to present a coherent climate perspective for the governance of future energy transition pathways.

II  Climate Principle 1: The Climate-​specific No Harm/​Harm Prevention Principle Energy Transition Principle 1







  

(1) States collectively must act diligently so as to prevent an accumulation of greenhouse gases in the atmosphere such as to cause an increase of average global temperatures in excess of well below 2oC above pre-​ industrial levels. (2) Each state acts diligently when it endeavours to limit its net emissions to a fair portion of global emissions in collaboration with the community of states as measured against the state’s correlative rights determined by its historical relative contribution to greenhouse gas accumulations. (3) The measured emission of greenhouse gases as such does not constitute pollution giving rise to a liability of the state causing the emission in question. (4) The emission of greenhouse gases in excess of a global share of emissions consistent with a reasonable use of energy systems and energy value chains gives rise to an obligation to reduce, abate, or offset the greenhouse gas emissions in excess of the reasonable share.

A  The General Harm Prevention The harm prevention principle originates from the Trail Smelter arbitration between the US and Canada.2 The US commenced the proceedings against Canada

2 See Philippe Sands and Jacqueline Peel, Principles of International Environmental Law (4th edn, CUP 2018) 206–​11.

Climate-specific No Harm/Harm Prevention Principle  105 under a special agreement between both countries.3 The US claimed that SO2 from the Consolidated Mining and Smelting Company smelter plant at Trail, British Columbia, caused environmental damage across the border in the US state of Washington in violation of international law.4 The Trail Smelter tribunal concluded that SO2 from stacks at the Trail smelter was carried down wind, impacting US.5 The Trail Smelter tribunal adopted a remedial US law nuisance logic.6 The emission constituted a nuisance requiring both the payment of damages and abatement.7 The 1972 Stockholm Declaration first codifies the harm prevention principle as follows: ‘States have . . . the sovereign right to exploit their own resources pursuant to their own environmental policies, and the responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction.’8 The principle was included in future constitutive statements of international environmental law principles, such as the 1992 Rio Declaration.9 The International Court of Justice since recognized this principle as customary international environmental law.10 The currently dominant harm-​prevention paradigm casts the principle as a delictual liability rule.11 Understood as a delict, harm prevention requires both harm and fault to establish liability. Consistent with such a delictual paradigm, harm prevention is not a strict liability rule—​that is, the no-​harm principle is not an obligation of result.12 Rather, it is an obligation of conduct with a procedural and a substantive element.13 Procedurally, states must investigate whether certain activity is likely to rise to future harm and consult and communicate with affected stakeholders.14 Substantively, state conduct must aim actually to prevent harm.15 Liability lies only if both elements are met and there is harm.16 3 Trail Smelter Arbitration (US v Canada) III UN RIAA 1905, 1907 (16 April 1938 and 11 March 1941). 4 ibid 1907, 1917. 5 ibid 1923. 6 ibid 1925. 7 ibid 1919, 1965. 8 1972 Stockholm Declaration on the Human Environment, principle 21; for a discussion see Jutta Brunnée, Procedure and Substance in International Environmental Law (Brill 2020) 68–​69; Jutta Brunnée, ‘Harm Prevention’ in Lavanya Rajamaji and Jacqueline Peel (eds), The Oxford Handbook of International Environmental Law (2nd edn, OUP 2021) 269, 271–​72. 9 1992 Rio Declaration, principles 2, 14; Leslie-​Anne Duvic-​Paoli and Jorge Viñuales, ‘Principle 2’ in Jorge Viñuales (ed), The Rio Declaration on Environment and Development: A Commentary (OUP 2015) 107; Makane Mbengue, ‘Principle 14’ in Jorge Viñuales (ed), The Rio Declaration on Environment and Development: A Commentary (OUP 2015) 383, 398. 10 See eg Legality of the Threat or Use of Nuclear Weapons (Advisory Opinion) [1996] ICJ 226, 242 (8 July 1996); Gabčíkovo-​Nagymaros Project (Hungary v Slovakia) (Judgment) [1997] ICJ Rep 7Gabc (25 September 1997); Pulp Mills on the Uruguay River (Argentina v Uruguay) [2010] ICJ 14, 55–​56 (20 April 2010). For a fuller discussion see Brunnée, Procedure and Substance (n 8) 70–​72. 11 See Edith Brown Weiss, Establishing Norms in a Kaleidoscopic World (Brill 2020) 162–​63. 12 Brunnée, Procedure and Substance (n 8) 63. 13 ibid. 14 See ibid 32. 15 ibid. 16 ibid; Pulp Mills on the Uruguay River (Argentina v Uruguay) (n 10) 49. On the final limb see Patricia Birnie and others, International Law and The Environment (3rd edn, OUP 2009) 517 (discussing

106  The Climate Principles The harm prevention principle has an alternative, correlative-​rights based justification that better fits the demands of energy transition governance. According to this conception, the over-​development of a resource inconsistent with community standards would be considered an abuse of right without regard to fault. In this context, harm prevention would become a collective enterprise of the dynamic governance of a shared resource community by affected members.17 This understanding of the harm prevention principle as a principle of collective resource management is consistent with the 1972 Stockholm Declaration, read as a whole. The goal of harm prevention is to secure ‘a life of dignity and well-​being’ for all human beings.18 Human well-​being requires ‘careful planning and management’ of ‘natural resources of the earth’ as a whole.19 The goal of such planning and management is to ‘maintain . . . and, wherever practicable, restore . . . and improve’ the ‘capacity of the earth to produce vital renewable resources’—​again with a global focus.20 Wildlife heritage and habitat again require global attention to achieve economic development consistent with conservation.21 Centrally, for energy transition, the ‘non-​renewable resources of the earth must be employed in such a way as to guard against the danger of their future exhaustion’ and moreover they must be employed ‘to ensure the benefits from such employment are shared by all mankind’.22 Pollution management focuses on a global shared space.23 Centrally for the proposition of this book, the harm prevention principle ultimately can be grounded in a realization of ‘[e]‌conomic and social development . . . and for creating conditions on earth that are necessary for the improvement of the quality of life’.24 This conception of harm prevention avoids governing down to meet the bare minimum liability standard below which conduct would be wrongful and governs up instead to fulfil the goal of human development through environmental stewardship.25 objective responsibility as follows ‘When applied to accidental injury emanating from nuclear installations, this concept focuses on the conduct of the state in failing to meet its obligation of diligent control, and is distinguishable from fault only in eliminating subjective elements of intention or recklessness. Responsibility in such cases is neither strict nor absolute since it cannot be established by proof of damage alone. But where nuclear damage is the result of some internationally prohibited activity, such as the dumping of radioactive waste at sea, or atmospheric nuclear tests, objective responsibility results not from a failure of due diligence, but simply from the harm caused in deliberate violation of international law’). 17 For a full development of this understanding of harm prevention see Frederic G Sourgens, ‘Cyber-​ Nuisance’ (2021) 42 PJIL 1005. 18 1972 Stockholm Declaration, principle 1. 19 ibid principle 2. 20 ibid principle 3. 21 ibid principle 4. 22 ibid principle 5. 23 ibid principle 6. 24 ibid principle 8. 25 The difference is masterfully explained in the private law work of Alan Miller and Ronen Perry. See Alan Miller and Ronen Perry, ‘The Reasonable Person’ (2012) 87 NYU LR 323; Alan Miller and Ronen Perry, ‘Good Faith Performance’ (2013) 98 Iowa LR 689.

Climate-specific No Harm/Harm Prevention Principle  107

B  Applying the Harm Prevention Principle to Climate Law As greenhouse gas emissions clearly cause climate harm, the harm prevention principle would on its face require that states must act diligently to prevent precisely this harm. Such an understanding is consistent with—​but by no means compelled by the UNFCCC. The first principle in the Convention codifies that ‘developed country Parties should take the lead in combatting climate change and the adverse effects thereof ’.26 The recognition that climate change has the potential to lead to ‘adverse effects’ implies a recognition that at some point, continued greenhouse gas emissions violate the harm prevention principle.27 It further spells out an obligation to prevent such adverse effects subject to other principles in the UNFCCC.28 This leaves two threshold questions for the application of the harm prevention principle in the climate context. The first question concerns quantitative thresholds. At what level do greenhouse emissions reach a point to constitute legally cognizable climate harm, ie adverse effects of climate change? Without an answer to this question, it is not possible to set a greenhouse budget against which to judge whether conduct by a state constitutes a violation of the harm prevention principle. The second question is one of thresholds of causation. How should one go about assigning the remaining greenhouse gas budget? And who should be made responsible for what part of the exhaustion of that budget? This point is typically articulated in terms of difficulty of proof of attribution.29 Conceptually, however, the problem goes deeper: the first ton of CO2 emitted was not harmful given its own limited warming potential. It is the accumulation and, one could say, the ‘last’ ton of CO2 emitted that triggers climate tipping events. The problem is that CO2 remains in the atmosphere between 300 and 1,000 years, ie it is the continued presence of old emissions that bring the world to the brink of the greenhouse gas budget.30 When the emissions were not immediately harmful when emitted but are harmful a century later after further emissions, how should burdens be distributed under the harm prevention principle? 26 UNFCCC, art 3(1). 27 See Duvic-​Paoli and Viñuales (n 9) 107, 116. For a more detailed discussion see Michael G Faure and André Nollkaemper, ‘International Liability as an Instrument to Prevent and Compensate for Climate Change’ (2007) 26A Stanford Env LJ 123, 140–​42, 145. 28 See Duvic-​Paoli and Viñuales (n 9) 107, 116. This reading is not a compelled conclusion. The definition of adverse effects of climate change does not in itself assist in pinning down the mechanisms bringing about such effects by way of the introduction of some pollutant that can cross national boundaries. UNFCCC, art 1(1). Further, the formulation of the first principle of the UNFCCC quoted above uses the mood ‘should’ thus calibrating that no obligation as of yet compels developed states to act despite their past historical emissions. Read together, this would suggest that UNFCCC parties precisely reject the stronger view of the no-​harm principle that historical emissions constituted transboundary pollution. The UNFCCC therefore is ambiguous on this important point in ways that allowed the further development of climate law in the manner outlined below. 29 Daniel Bodansky and others, International Climate Change Law (OUP 2017) 45. 30 Alan Buis, ‘The Atmosphere: Getting a Handle on Carbon Dioxide’ NASA (9 October 2019) https://​clim​ate.nasa.gov/​news/​2915/​the-​atm​osph​ere-​gett​ing-​a-​han​dle-​on-​car​bon-​diox​ide/​.

108  The Climate Principles This problem is particularly acute in the traditional fault-​based understanding of the harm prevention principle. From today’s perspective, it is beyond doubt that the historical contributions of the Great Powers in the nineteenth and early twentieth century caused climate change. This does not mean that the states emitting greenhouse gases failed to act diligently as a procedural matter at that time. A fault-​ based understanding of the harm prevention principle therefore tends to create practical obstacles to climate mitigation governance. Importantly, the same is not true in the context of a reasonable use understanding of the harm prevention principle. Here, the question is precisely not one of fault. Rather, harm prevention looks to apportion and manage collective cumulative use.31 This cumulative use would allow one to establish a greenhouse gas budget that accounts for past contributions whether or not those contributions were wrongful ex tunc. As outlined in the remainder of this section, it is this reasonable use principle that underpins the harm prevention principle in contemporary climate law.

C  The Paris Agreement and the Glasgow Climate Pact The Paris Agreement has resolved the first threshold question. The Paris Agreement sets as a target to hold ‘the increase in global average temperatures to well below 20C above pre-​industrial levels’.32 It further aims to ‘pursu[e]‌efforts to limit the temperature increase to 1.50C above pre-​industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change’.33 This threshold means that it is possible to calculate with some reasonable accuracy the remaining greenhouse gas budget remaining before the temperature goal becomes all but impossible to meet.34 This threshold has found acceptance in global constitutional jurisprudence.35 At the same time, the Paris Agreement target does not view greenhouse gas emissions as pollution as such. The Paris Agreement seeks to ‘reach global peaking of greenhouse gas emissions as soon as possible, recognizing that this will take longer for developing countries’.36 It further seeks to ‘achieve a balance between anthropogenic emissions by source and removals by sinks of greenhouse gases in the second half of ’ the twenty-​first century.37 The Paris Agreement does not unrealistically 31 1972 Stockholm Declaration, principle 5. 32 Paris Agreement, art 2(1)(a). 33 ibid. 34 Myles Allen and others, ‘Summary for Policymakers’ in Valérie Masson-​Delmotte and others (eds), Global Warming of 1.50C (Intergovernmental Panel on Climate Change 2019) 3, 12. 35 See ch 15; see also Bundesverfassungsgericht (BVerfG) (24 March 2021) 157 Entscheidungen des Bundesverfassungsgerichts (BVerfGE) 270 (Neubauer). 36 Paris Agreement, art 4(1). 37 ibid.

Climate-specific No Harm/Harm Prevention Principle  109 insist on an elimination of greenhouse gas emissions, as such. It further does not even insist on a removal of such emissions at the source. Rather, the Paris Agreement approaches greenhouse gas as an externality to be managed collectively by the global community consistent with the procedures set out in the Paris Agreement. This approach fits a reasonable use rationale given the express focus on development in the Paris Agreement.38 The Paris Agreement also indirectly addresses the second threshold question whether or when greenhouse emissions constitute an international wrong in its provision on loss and damage.39 The Paris Agreement sets up a ‘cooperative and facilitative’ response to loss and damage.40 It stands in the context of a longer line of negotiated decisions that avoided assigning individual responsibility for past emissions.41 These emissions thus appear neither to be considered compensable pollution or attributable to any one actor. At first blush, this approach risks treating loss and damage solely through a forward-​looking lens; viewed as such, it does not make whole affected parties for the significant losses they have already suffered because of climate change.42 The treatment of loss and damage in the Paris Agreement sets the scene for a more fulsome legal conception of, and response to, loss and damage.43 Loss and damage must be ‘address[ed]’, not just ‘minimized’—​ie losses suffered must be redressed.44 At the same time, the responsibility for addressing loss and damage lies with the global community collectively.45 This is consistent with a reasonable use rationale as opposed to an individual liability rationale: the Paris Agreement treats loss and damage as an issue to be redressed regardless of the fault of any one state or any group of states in causing it. In principle, the Paris Agreement is consistent with collective action that aims to restore full human development for all who have suffered loss and damage (even if it does not itself compel this result). This rationale is maintained in the Glasgow Climate Pact. It reaffirms the mitigation goal of the Paris Agreement with a further resolution to aim increases to the lower 1.50C warming figure.46 It further expressly includes reference to carbon budgets by reference to the Paris Agreement as a yardstick for action under the Paris Agreement.47

38 See ibid arts 2(1), 6(4)(a). 39 ibid art 8. 40 ibid art 8(3). 41 Linda Siegele, ‘Loss and Damage (Article 8)’ in Daniel Klein and others (eds), The Paris Agreement on Climate Change: Analysis and Commentary (OUP 2017) 224, 225–​28. 42 See ibid. 43 See ibid 228–​29. 44 Paris Agreement, art 8(1). 45 ibid art 8(3). 46 Glasgow Climate Pact (CMA.3), 20–​21. 47 ibid 3.

110  The Climate Principles The Glasgow Climate Pact comes closer than any prior climate agreement to treating CO2 emissions as pollution as such. The parties to the Glasgow Climate Pact expressly recognize that the lower warming target requires ‘reducing global carbon dioxide emissions by 45 per cent by 2030 relative to 2010 levels and to net zero around mid-​century’.48 The parties further ‘emphasize[] the urgent need for Parties to increase their efforts to collectively reduce emissions through accelerated action and implementation of domestic mitigation measures’ by way of domestic mitigation actions.49 Despite this language, the Glasgow Climate Pact must be read as continuing on the path of the Paris Agreement. The Glasgow Climate Pact makes clear that CO2 emissions remain permissible to the extent they are abated.50 It continues to take a collective, development-​based view of mitigation pathways.51 It thus on its face continues with a path of collective management of reasonable use rather than individual state responsibility for harm prevention. The Glasgow Climate Pact further continues on the pathway of collective responses to loss and damage (rather than individualized responsibility). It acknowledges more strongly than the Paris Agreement the fact of past loss and damage from climate change.52 The Glasgow Climate Pact continues to avoid assigning individualized fault.53 At the same time, it also implicitly places the financial burden for a response to loss and damage on developed countries.54 This is a cognizable move vis-​à-​vis the Paris Agreement.55 It is a move that remains consistent with collective action rather than individual responsibility. Yet, it is a move that by no means secures outcomes needed to address loss and damage from climate change. The climate-​specific harm prevention principle in sum does not currently operate as a liability rule. It rather outlines the means to manage global greenhouse gas mitigation efforts. It also provides a collective framework for the response and redress to loss and damage based on a human development perspective. This approach can only successfully continue to supplant a liability perspective inherent in international environmental literature to the extent that it meets the dual promises of mitigation outcomes and loss redress. At this point, climate law is on a trajectory to support such outcomes. However, it does not alone compel let alone secure them.



48 49 50 51 52 53

54 55

ibid 22. ibid 26. ibid 36. ibid 32, 39. ibid 61. ibid 61–​74. ibid 63, 64, 70. Compare Glasgow Climate Pact (CMA.3) 61–​74 with Paris Agreement, art 8.

Climate Principle 2: Sovereign Choice of Means  111

III  Climate Principle 2: Sovereign Choice of Means Energy Transition Principle 2





  

(1) Each state has a free choice of means of progressive emissions reductions to meet its obligations diligently to prevent climate harm (Energy Transition Principle 1) consistent with the principle of sovereign energy equality. (2) States communicates their choice of means to implement their energy transition policies in nationally determined contributions submitted pursuant to the Paris Agreement. (3) The reasonableness of a state’s choice of means to exercise its correlative rights is assessed taking into account a state’s emission pathways in the context of the state’s development, history, and economic diversification efforts.

The sovereign choice of means of achieving greenhouse gas mitigation is central to the architecture of energy transition governance. It is a corollary of sovereign equality as applied to energy systems.56 International climate law since the Copenhagen climate negotiations in 2009 follows a bottom-​up networked governance approach.57 In practice, bottom-​up governance in climate law is implemented through the nationally determined contributions (NDCs) to emissions reduction mechanism codified in Articles 3, 4, and 9 of the Paris Agreement.58 The principle of sovereign choice of means conditions and overlaps with the climate-​specific harm prevention principle. The flexibility inherent in the choice of means codified in the Paris Agreement creates significant obstacles for a fault-​ based regime with teeth.59 The flexibility means in practice that any fault-​based approach would probably crystallize liability too late to avoid a climate collapse: at that point, emissions significantly in excess of any reasonable emissions target would already have entered the atmosphere by the time such climate responsibility could be invoked.

56 See ch 4. 57 See Bodansky (n 29) 351; Harold Koh, ‘Triptych’s End: A Better Framework to Evaluate 21st Century International Lawmaking’ (2017) 126 YLJF 338, 351; for a more mixed assessment of the Copenhagen summit see Cinnamon Carlarne and others, ‘International Climate Change Law: Mapping the Field’ in Kevin R Gray and others (eds), The Oxford Handbook of International Climate Change Law (OUP 2016) 3, 12. 58 See particularly Paris Agreement, arts 3, 4(2), 4(3), 4(9), 9(1). The mechanism was first agreed in Lima in 2014. Report of the Conference of the Parties on its Twentieth Session, held in Lima from 1 to 14 December 2014, Lima Call for Climate Action, Draft Decision 1CP/​.20, UN Doc FCCC/​CP/​2014/​ 10/​Add.1 (1 February 2015) 8–​15. 59 Paris Agreement, art 4(2).

112  The Climate Principles The flexibility of the Paris Agreement instead suggests that it is premised in collective action towards reasonable use. It supports collective action by embedding NDCs in a transparency framework and supporting NDCs by means of a context-​ driven capacity building effort.60 It further holds out global financing opportunities and market-​based and non-​market-​based mechanisms to support the achievement of NDCs by developing countries.61 It establishes the baseline for a reasonable use paradigm by transparent creating community standards against which the reasonableness of mitigation efforts can be measured.62 The choice of means principle facilitates the grassroots creation of new global energy value chains and new energy markets by focusing on shared innovation around next generation energy technology on an accelerated timescale.63 As will be discussed in the context of the third climate principle of climate-​specific cooperative common but differentiated responsibility, these energy value chains will grow around a new economic paradigm. NDCs of many developing states (and particularly oil producing developing states) throughout intend to diversify their economies away from fossil-​fuel dependence.64 This economic diversification in turn will further accelerate the creation of a new, collective, sustainable global energy paradigm consistent with the climate ambitions of the Paris Agreement and Glasgow Climate Pact.65 The flexibility in sovereign approaches means that the climate specific harm-​ prevention principle is best understood as a reasonable use principle that imposes on all states an obligation of reasonable use of the climate system. This understanding does not treat greenhouse gas emissions as wrongful because of their climate impact. Rather, it looks to the reasonableness of the emission in the broader developmental scheme as a core factor to guide decisions as to which emissions to reduce and where to reduce them. Greenhouse gas emissions therefore are not all equal in the eyes of the law, even if their physical effects are equal in the climate system.

IV  Climate Principle 3 and Development Principle 1: Climate-​specific Common but Differentiated Responsibility as Cooperation Energy Transition Principle 3 (1) All states have a common responsibility to prevent climate harms by acting individually and collectively to hold the increase of average global temperature in excess of well below 2oC above pre-​industrial levels. 60 ibid arts 3, 11, 11(2), 13. 61 ibid art 6, 9(1). 62 ibid art 3. 63 ibid art 10(2), (5). 64 Leonardo Sempertegui and Frederic Sourgens, ‘The Importance of the State-​Owned and Private Oil Sector for Successfully Implementing the Energy Transition’ (2021) 67 RMMLF/​FNREL 2–​1. 65 ibid.

Climate Principle 3 and Development Principle 1  113



  

(2) States have a differentiated responsibility to cooperate with each other so as to contribute to the effort to transition energy systems and energy value chains, taking account of their historical roles, technical and financial capabilities, and developmental needs. (3) States fulfil their obligation to cooperate by means of providing financial support, technology transfer and fair access to international trade and investment sufficient to permit states to diversify their respective economies consistent with their sovereign choice of means (Energy Transition Principle 2) and to share fairly in the economic, social, and cultural benefits and burdens of a post-​transition economic order.

A  The General Principle of Common But Differentiated Responsibility Contemporary international environmental law historically coincided with the decolonialization movement in international law. Contemporary international environmental law dates its beginnings to the 1972 Stockholm Principles.66 This coincides the passage of core decolonialization documents by developing states such as the 1974 UN General Assembly Declaration on the Establishment of a New International Economic Order.67 In some instances, states pursued environmental stewardship and decolonialization together as part of the same discourse. Perhaps surprisingly to contemporary readers, oil producing states in the Global South stood at the vanguard of this combination of decolonialization as environmental stewardship in international affairs.68 Differentiated responsibility combines the logic of decolonialization and international environmental law.69 Global environmental degradation could be seen through a lens of responsibility.70 Global North economies reaped the benefit of resource extraction and inflicted the costs of this extraction disproportionately on

66 See Peter H Sand, ‘Origin and History’ in Lavanya Rajamani and Jacqueline Peel (eds), The Oxford Handbook of International Environmental Law (2nd edn, OUP 2021) 50, 59 (discussing the emergence of international environmental law as a discipline). 67 ‘Declaration on the Establishment of a New International Economic Order’ General Assembly Resolution No 3201 (1 May 1974) UN Doc A/​RES/​S-​6/​3201. For a discussion of NIEO and its impact on policy-​making in Bretton Woods financial institutions see James Thuo Gathii, ‘Good Governance as a Counter Insurgency Agenda to Oppositional and Transformative Social Projects in International Law’ (1999) 5 Buffalo Human Rights LR 107, 117–​20. For a historical discussion see Adom Getachew, Worldmaking after Empire (PUP 2019); see also Antony Anghie, Imperialism, Sovereignty and the Making of International Law (CUP 2004). 68 Giuliano Garavini, The Rise and Fall of OPEC in the 20th Century (OUP 2019) 227–​28. 69 Sands and Peel (n 2) 246. 70 See Malavika Rao, ‘A TWAIL Perspective on Loss and Damage from Climate Change: Reflections from Indira Gandhi’s Speech at Stockholm’ (2022) 12 Asian J Intl L 63, 70.

114  The Climate Principles their former colonies.71 This created a structural imbalance between the Global North and the Global South, leading to attempts to push back against trade law principles such as most-​favoured nation treatment on developmental grounds.72 Applied in the environmental context, this understanding of differentiated responsibility implied first that developing states could and should place a policy premium on development (meaning that they should be exempted from obligations that could impair development).73 Just as potently, differentiated responsibility through this lens also works in tandem with the harm prevention principle. Environmental harm could be linked to wrongfulness in development patterns in the Global North.74 These patterns were wrongful because they deprived states in the Global South of meaningful ability to participate in self-​governance under colonial and mandate rule.75 This wrongfulness entailed a duty to repair. The principle of common but differentiated responsibility was highly controversial. Particularly, the normative basis for the principle continued to be contested (responsibility versus capability). This conflict is apparent in the Stockholm Principles. Principle 23 sets out that ‘[w]‌ithout prejudice to such criteria as may be agreed upon by the international community, or to standards which will have to be determined nationally, it will be essential in all cases to consider the systems of values prevailing in each country, and the extent of the applicability of standards which are valid for the most advanced countries but which may be inappropriate and of un-​warranted social cost for the developing countries’.76 This formulation of the principle focuses on values and on social costs but does not invoke a concept of responsibility in advanced countries but leaves the door open for future international agreement. The next important development for the common but differentiated responsibility is the watershed report on sustainable development by the World Commission on Environment and Development, named the Brundtland Report for its chair Norwegian Prime Minister Gro Harlem Brundtland. The report was published in 1987. It took a position that incorporated elements from both the

71 For such a structural argument advanced by a Columbia University political theorist and historian see Timothy Mitchell, Carbon Democracy Political Power in the Age of Oil (Verso 2011). 72 Philippos Spyropoulos and Theodore Fortsakis, The Common but Differentiated Responsibility Principle in Multilateral Environmental Agreements (Wolters Kluwer 2009) 50. 73 Philippe Cullet, ‘Principle 7’ in Jorge Viñuales (ed), The Rio Declaration on Environment and Development: A Commentary (OUP 2015) 229, 231–​32. 74 Mitchell (n 71). 75 Getachew (n 67). 76 1972 Stockholm Declaration, principle 23. On the importance of principle 23 for the development of the common-​but-​differentiated-​responsibility principle see Sands and Peel (n 2) 246; Cullet (n 73) 231–​32. Some accounts do not trace the principle as far back as Stockholm but begin with the 1992 Rio Declaration. Weiss (n 11) 171.

Climate Principle 3 and Development Principle 1  115 social cost driven principle of differentiation and a more robust principle of differentiation premised in structural global inequalities.77 It is this compromise version of the differentiation—​one that can be read both in terms of responsibility and capability—​that has since become the classical expression of the principle. This compromise version was codified in Principle 7 of the Rio Declaration on Environment and Development. It begins that ‘[s]‌tates shall cooperate in a spirit of global partnership to conserve, protect and restore the health and integrity of the Earth’s ecosystem’.78 It then goes on to introduce the responsibility point underlying the Global South view of differentiation: ‘In view of the different contributions to global environmental degradation, States have common but differentiated responsibilities’.79 The closing provision, however, again softens the idea and premise the operative responsibility on developed countries in terms of technologies and financial resources rather than on compensation for past contributions to environmental degradation: ‘The developed countries acknowledge the responsibility that they bear in the international pursuit of sustainable development in view of the pressures their societies place on the global environment and of the technologies and financial resources they command’.80 In short, while the principle of common but differentiated responsibility is generally accepted as a principle of international environmental law, its exact contours and substance remain hotly contested along these lines.

B  The General Principles of Cooperation and Solidarity General international law and international human rights law recognize the principles of cooperation and solidarity. Cooperation is at the heart of the UN Charter and human rights treaties such as the International Covenant on Economic, Social and Cultural Rights.81 The most recent—​and for current purposes, the most important—​document to codify these principles is the UN Draft Convention on the Right to Development.82 The principle of solidarity is more tenuously anchored

77 See Our Common Future (World Commission on Environment and Development 1987) 27 para 13 (‘Such inequalities represent great differences not merely in the quality of life today, but also in the capacity of societies to improve their quality of life in the future. Most of the world’s poorest countries depend for increasing export earnings on tropical agricultural products that are vulnerable to fluctuating or declining terms of trade. Expansion can often only be achieved at the price of ecological stress. Yet diversification in ways that will alleviate both poverty and ecological stress is hampered by disadvantageous terms of technology transfer, by protectionism, and by declining financial flows to those countries that most need international finance’). 78 1992 Rio Declaration, principle 7. 79 ibid. 80 ibid. 81 UN Charter, arts 1(3), 11(1), 13, 56; ICESCR, arts 1(2), 2(1), 11(1)–​(2). 82 Convention on the Right to Development (Draft 2) preamble 9, arts 12, 13.

116  The Climate Principles in positive treaty obligations but rather operates as a background principle of international law providing a why, how, and how far cooperation must reach.83 The principle of cooperation is a cornerstone of the UN system. Article 1(3) of the UN Charter states that a purpose of the UN system is to ‘achieve international co-​operation in solving international problems of an economic, social, cultural, or humanitarian character, and in promoting and encouraging respect for human rights and for fundamental freedoms for all without distinction as to race, sex, language, or religion’.84 The Covenant on Economic, Social, and Cultural Rights requires states to cooperate ‘with a view to achieving progressively the full realization of the rights recognized in the present Covenant’.85 Article 13 of the Draft Convention on the Right to Development sets out a specific list of concrete obligations the duty to cooperate entails. The chapeau of Article 13(1) states that the state parties ‘reaffirm and shall implement their duty to cooperate with each other through joint and separate action’.86 The choice of ‘reaffirms’ already in the first draft confirms that Article 13 codifies existing international legal obligations under the duty to cooperate, meaning that the list is illustrative despite its character as a draft treaty.87 The strengthening between the first and second draft of the convention from ‘undertake to implement’ to ‘shall implement their duty’ represents a strengthening of the obligation to cooperate within the broader duty to protect, respect, and fulfil the right to development codified in the draft.88 The specific obligations relevantly include obligations to encourage ‘development assistant and financial flows including foreign direct investment’, to enhance ‘North-​South, 83 On solidarity see the seminal Rüdiger Wolfrum, Solidarity and Community Interest: Driving Forces for the Interpretation and Development of International Law (Brill 2021). The first draft of the UN Draft Convention the Right to Development focused narrowly on a cooperation-​based understanding of solidarity. Convention on the Right to Development (Draft 1), art 3(g). It is premised on the draft declaration on human rights and international solidarity prepared by Virginia Dandan. ibid art 3, comment 11. The discussion of solidarity here goes beyond the concept of solidarity developed in the draft declaration. It requires affirmatively the sharing in losses on the basis of solidarity in a manner that is not fully articulated in the current draft declaration. See Draft Declaration on the Right to International Solidarity, arts 2(a), 7, UN Doc A/​HRC/​35/​35, annex (25 April 2017). The concept of preventive solidarity is consistent with the discussion here in so far as it goes ‘[b]‌eyond international cooperation’. Report of the Independent Expert on Human Rights and International Solidarity, Virginia Dandan (19 July 2017), 46, UN Doc A/​72/​171/​. The report on its face appears to stop short of the obligations outlined here. The same is true for the work of the next independent expert to continue the work on solidarity. See Obiora Okafor, ‘International Solidarity and the Extraterritorial Application of Human Rights: Prospects and Challenges’ (19 April 2022) UN Doc A/​HRC/​50/​37, 32-​34; Obiora Okafor, ‘International Solidarity in Aid of the Realization of Human Rights during and after the Coronavirus Disease (Covid-​19)’ (13 April 2021) UN Doc A/​HRC/​47/​31, 6. A full discussion of the difference in approach is beyond the scope of this chapter. 84 UN Charter, art 1(3). 85 ICESCR, art 2(1). 86 Convention on the Right to Development (Draft 2), art 13(1). 87 See Convention on the Right to Development (Draft 1), art 13 comment 2 (‘Paragraph 1 of draft article 13 is formulated in a way that it reaffirms the legal normativity of the duty to cooperate in international law flowing from the Charter of the United Nations. It further incorporates an undertaking by States to implement this duty they have undertaken in the Charter’). 88 See ibid, art 13 comment 1; Convention on the Right to Development (Draft 2), art 13(1).

Climate Principle 3 and Development Principle 1  117 South-​South and triangular regional and international cooperation on access to science, technology innovation’, as well as to enhance ‘the development, transfer, dissemination and diffusion of environmentally sound technologies to developing countries on favourable terms, including on concessional and preferential terms, as mutually agreed’.89 None of these specific obligations further ‘constitute new obligations on [s]‌tates’.90 These obligations are obligations of conduct that require states to engage with each other on the subject matters listed and to then proceed in discussions in good faith on the subject matter in question.91 The duty to cooperate centrally does not require states to make specific concessions or even to reach agreement or make specific contributions under the duty to cooperate.92 The principle of solidarity further strengthens the procedural nature of the duty to cooperate by limiting the ability of states to avoid cooperative outcomes. It requires collective action that takes into account more than just national self-​ interest.93 Rather, solidarity requires that states take into account the interests of other states as well as to promote and protect the rights of peoples and individuals as well as future generations.94 At core, the principle of solidarity aims ‘to overcome societal inequalities and injustices’.95 It aims at the collective achievement of global conditions sufficient to support human dignity.96 Solidarity overcomes some limitations of cooperation. Cooperation does not itself require the reaching of an agreement on mutually agreeable terms but rather allows the parties not to reach agreement, at all, to the extent that reaching agreement is contrary to their interests.97 Solidarity on the other hand requires that cooperation reaches outcomes. States must act to support individuals, peoples, and states, and must give preference to the dignity interests of those individuals, peoples and states over their own national commercial interest. The second and current draft of the Convention on the Right to Development reflects this strengthened role of cooperation in the context of the right to development.98 89 Convention on the Right to Development (Draft 2), art 13(4)(f)–​(h)(i). 90 Convention on the Right to Development (Draft 1), art 13 comment 6. 91 By analogy see Frédéric G Sourgens, Good Faith in Transnational Law: A Pluralist Account (Brill 2022) 180–​205. 92 Convention on the Right to Development (Draft 1), art 13 comment 6. 93 Wolfrum (n 83) 398–​99. 94 ibid. 95 Christian Tomuschat, Human Rights: Between Idealism and Realism (3rd edn, OUP 2014) 431. 96 See Sir Hersch Lauterpacht, An International Bill of the Rights of Man (OUP 2013) 68. 97 Convention on the Right to Development (Draft 1), art 13(4)(g). 98 Arguably, the second draft of the UN Convention on the Right to Development moves closer to this understanding of cooperation and solidarity. The second draft of the UN Convention includes solidarity in the chapeau of article 13(2). Further, the second draft strengthens the requirements of achieving outcomes. Compare Convention on the Right to Development (Draft 1), art 13(2)(b) with Convention on the Right to Development (Draft 2), art 13(2)(b). The same theme continues in the changes to article 13(3). The first draft required that ‘States Parties undertake to ensure that financing for development, and all other forms of aid and assistance given or received by them, whether bilateral, or under any institutional or other international framework, are consistent with the provisions of the present Convention’. Convention on the Right to Development (Draft 1) (emphasis added). The second

118  The Climate Principles State-​to-​state cooperation therefore becomes a procedural means to show solidarity. Should inter-​state cooperation fail, states must find other means of support individuals, peoples and future generations to the maximum of available resources nonetheless.99 Solidarity in particular has been linked already to the principle of common but differentiated responsibility. Specifically, the concept of responsibility to act (rather than to cooperate towards action) is inherent in the notion of common responsibility.100 This common responsibility requires action by states for the benefit of third persons.101 Common but differentiated responsibility requires action by developed states even as it lessens the burden on states that are less able to contribute on an equal footing.102

C  The Climate-​specific Principle of Common But Differentiated Responsibility in the UNFCCC The UNFCCC introduced the common-​but-​differentiated-​responsibility principle to climate law by combining it with harm prevention.103 It implemented differentiation by means of an annex method, limiting responsibility to states listed in the annex.104 Originally, the annex was intended to evolve.105 As a matter of this treaty practice, it has not in fact evolved.106 The UNFCCC approach proved ultimately unworkable because of the take-​ off of economic globalization after the conclusion of the UNFCCC in 1992.107 The same goods that were previously produced and consumed in states subject to responsibility to reduce greenhouse gas emissions were now produced

draft significantly strengthens this obligation by removing mention of ‘undertake’ and requiring that ‘States Parties shall ensure that financing for development and all other forms of aid and assistance given or received by them, whether bilateral, or under any institutional or other international framework, are in compliance with internationally recognized development cooperation principles and consistent with the provisions of the present Convention’. Convention on the Right to Development (Draft 2), art 13(3). 99 Convention on the Right to Development (Draft 2), art 13(2); see also Convention on the Right to Development (Draft 1), art 12 comment 2. 100 Rüdiger Wolfrum, ‘Solidarity’ in Dinah Shelton (ed), The Oxford Handbook of International Human Rights Law (OUP 2013) 401, 408. 101 ibid. 102 ibid. 103 UNFCCC, art 3(1). 104 Bodansky and others (n 29) 120. 105 ibid 122. 106 ibid 123. 107 For a more critical appraisal see Matthias Herdegen, Principles of International Economic Law (2nd edn, OUP 2016) 14–​25.

Climate Principle 3 and Development Principle 1  119 in third states (while still being predominantly consumed in the developed economies). This scissoring of production and consumption leads to important accounting questions as to who should be deemed ‘responsible’ for emissions, producers or consumers.108 Yet, this debate is caught in a logic of a ‘pre-​ globalized’ economy. Production and consumption patterns deeply influence and constitute each other as the natural experiment of the Covid-​19 epidemic has shown.109 Attempts to disaggregate them for emissions accounting purposes therefore seeks to create regulatory benefits that find only tenuous footholds in the economic reality that production and consumption are inextricably interlinked. The problems of a strict principle of common-​but-​differentiated responsibility go deeper than an accounting problem. It created incentives to move more resource intensive, and older, production processes to developing states without also increasing local and global sustainability of production processes at the same time. This would bring industrial, pollution-​intensive parts of supply chains to developing states rather than parts of supply chains that would fuel local innovation. While allowing for industrialization in developing countries, this form of development tends to export expiring paradigms that limit the ability of developing states to participate in innovation rents.110 As a practical matter, the common-​but-​differentiated-​responsibility principle proved politically disastrous. It sidelined the US from the Kyoto Protocol as the US was a leading economy losing industrial jobs to then emerging economies.111 The developmental impact of exempting competitors from the costs of a climate-​ conscious energy infrastructure within the US led to the unanimous rejection by the US Senate of the Kyoto Protocol before it was even signed by the Clinton administration.112 This strict principle therefore proved problematic all around precisely because of the arbitrage it created—​arbitrage that ultimately does not benefit the world society as a whole, nor developed economies in the short term, or developing economies in the medium term.

108 See eg Arnold Tukker, ‘Consumption-​based Carbon Accounting: Sense and Sensibility’ (2020) 20 Climate Policy 1. 109 For one study see Walter Leal Filho and others, ‘The Influence of the Covid-​19 Pandemic on Sustainable Consumption: An International Study’ (2022) 34 Environmental Science Europe 54. 110 See Declaration on the Establishment of a New International Economic Order, UN General Assembly Resolution 3201 (S-​VI) (1 May 1974) 4(c). See also Carlota Perez, Technical Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages (Edward Elgar Publishing 2002) 65, 85 (‘So each great surge rolls out to the periphery supporting development with the last wealth-​producing capacities of its mature technologies, meeting at the end its final defeat (or transformation) by the new paradigm’). Alessio Terzi, Growth for Good: Reshaping Capitalism to Save Humanity from Climate Catastrophe (HUP 2022) 57–​58. 111 See Cass R Sunstein, ‘Of Montreal and Kyoto: A Tale of Two Protocols’ (2007) 31 HELR 1, 4. 112 ibid.

120  The Climate Principles

D  The Fusion of Common But Differentiated Responsibility and Cooperation after the Paris Agreement The approach to common but differentiated responsibility fundamentally shifted with the Copenhagen climate negotiations. The focus turned away from an exemption from climate obligations by virtue of common but differentiated responsibility to a focus again on common responsibility.113 This common responsibility nevertheless maintained the idea of significantly greater responsibility in traditional industrial powers. The new approach to achieving both goals at the same time was to link climate outcomes in traditionally exempted jurisdictions to financing from traditionally burdened states.114 The Copenhagen approach began to fuse together the principles of common but differentiated responsibility and cooperation. The Copenhagen Accord looked to both Annex I and non-​Annex I parties to take action with regard to climate change.115 It now tied this action to a specific warming goal.116 This action by non-​ Annex I parties was premised expressly in the idea of international cooperation.117 This cooperation would include commitments to establish appropriate forms of climate finance to support mitigation efforts by previously exempted parties.118 Just as importantly, it would also go hand-​in-​hand with transfer of technology.119 The Copenhagen climate negotiations achieved only a political agreement.120 Consequently, the switch in perspective inherent at Copenhagen was not yet reflected in international climate law. The Paris Agreement fully reflected the switch. Article 2 of the Paris Agreement continues to insist that the instrument ‘will be implemented to reflect equity and the principle of common but differentiated responsibilities and respective capabilities, in light of different national circumstances’.121 Appreciably, however, the content of common but differentiated responsibility shifted. Thus, Article 3 provides that ‘all Parties are to undertake and communicate ambitious efforts . . . with a view to achieving the purpose of this Agreement as set out in Article 2’.122 Article 2 commits to ‘[h]‌olding the increase in the global average temperature to well below 2oC above pre-​industrial levels and pursuing efforts to limit the increase to 1.5oC above 113 This principle is an imperfect analogue to the principle of common and shared responsibility. On this principle see Weiss (n 11) 176. 114 For a full discussion of this link see Alexander Zahar, Climate Change Finance and International Law (Routledge 2016). 115 Copenhagen Climate Accord 5. 116 ibid 1. 117 ibid 1–​3. 118 ibid 5, 10. 119 ibid 11. 120 For a discussion of Copenhagen Accord negotiations see Bodansky and others (n 29) 110–​12; Harold Koh, ‘Twenty-​First Century International Lawmaking’ (2012) 101 GeoLJ 1, 14. 121 Paris Agreement, art 2(2). 122 ibid art 3.

Climate Principle 3 and Development Principle 1  121 pre-​industrial levels’.123 This common commitment by all states is premised in the provision of significant climate finance from developing to developed states.124 The Glasgow Climate Pact has further strengthened this link between cooperation and common but differentiated responsibility. Climate finance became a core part of the Glasgow Climate Pact. The Pact emphasized ‘the need to mobilize climate finance from all sources to reach the level needed to achieve the goals of the Paris Agreement, including significantly increasing support for developing countries Parties, beyond 100 billion per year’.125 The Pact further took developing states to task for failing to meet the USD 100 billion per year goal by 2020 and again urges a meeting of this goal.126 This focus on climate finance again highlights the core shift in perspective to cooperation as a means to achieve global climate action. The perhaps most critical shift in the Glasgow Climate Pact pushes further in the direction of cooperation. The Glasgow Climate Pact establishes a warming goal (consistent with the Paris Agreement). It also establishes an emissions reduction goal associated with that warming goal.127 This emissions reduction goal is to achieve a ‘just transition to net zero emissions by or around mid-​century, taking into account different national circumstances’.128 The Glasgow Climate Pact sets a global net zero goal as opposed to leaving the timing of it to Paris Agreement member states. This global goal dispenses with the idea of national exemptions from net emission reductions on the basis of development. It thus reverses the strict principle of differentiated responsibility from the UNFCCC annexes and replaces it with a cooperative paradigm instead. At the same time, the new, cooperative common responsibility paradigm highlights that justice is a co-​equal criterion to emission reduction.129 It thus demands solidarity from developed states in securing such justice in transition to bring about equality and equity in the global economic order at the same time as securing emission reductions. What emerges after Glasgow is a distinctly cooperation and solidarity-​based constitutive climate order geared to achieving energy transition outcomes. Cooperation requires states to conduct discussions towards the achievement of shared goals such as the progressive global realization of the right to development with honesty and reasonableness (ie in good faith).130 This cooperation centres on transfer of technology that permits the diversification of all economies and societies towards an economically and environmentally sustainable future.131 123 ibid art 2(1)(a). 124 ibid arts 2(1)(b), 9(3), 9(6), 11. By way of context, the commitment was expected to be US$100 billion per year. Bodansky and others (n 29) 111. 125 Glasgow Climate Pact (CMA.3), 43. 126 ibid 44–​46. 127 ibid 20–​22. 128 ibid 32. 129 ibid 32. 130 See Convention on the Right to Development (Draft 1), art 13 comment 1. 131 Convention on the Right to Development (Draft 2), art 13(4)(b).

122  The Climate Principles This concept of cooperation is at the heart of the human right to development.132 After Glasgow, this idea of cooperation anchors climate law, as well.133 Solidarity requires the achievement of outcomes around shared goals beyond merely conducting discussions in good faith towards that end—​it requires shared sacrifice for a common good.134 The combination of a warming goal with a goal of a global net zero emission world by or around mid-​century achieved by means of a just transition is a commitment to such solidarity.135 The developing world also committed to the goal of net zero by or around mid-​century.136 In return, world society as a whole (and led by developed nations) commits to more than just procedural cooperation.137 It commits to bring to bear the resources it takes to achieve the goal without regard to national benefit.

E  Climate Management as Development-​based Correlative Rights Much of the new understanding of common but differentiated responsibility as cooperation remains to be implemented. Most glaringly, developed states have failed to meet even their basic climate finance promises of US$100 billion annually.138 As the Glasgow Climate Pact highlights, US$100 billion annually in climate finance will continue to miss the mark of needed resources and commitments.139 As it stands, solidarity is off to a rocky start and risks offloading significant financial and developmental burdens on developing states. A commons correlative-​rights-​based governance approach provides a good blueprint for next steps. Both correlative rights and climate law seek to protect a common corpus for current and future right holders against unreasonable and wasteful conduct. This approach requires the development of community standards and, through community standards, of trust.140 The transparency mechanisms in climate law support this goal.141 The key insight of a correlative-​rights-​based commons-​governance approach is how to deal with under-​performance and infractions. Hard-​handed naming-​ and-​shaming or sanctioning tends to be counter-​productive. Instead, the conspicuous and context-​appropriate assistance to remedy under-​performance and 132 ibid art 13(4)(f)–​(h). 133 See eg Glasgow Climate Pact (CMA.3), paras 50, 60. 134 Wolfrum (n 83) 398–​99; Tomuschat (n 95) 431; see also Lauterpacht (n 96) 68. 135 Glasgow Climate Pact (CMA.3), 20–​22, 32. 136 ibid 32. 137 ibid. 138 ibid 43. 139 See ibid 44–​48. 140 See ibid. 141 See Elinor Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action (CUP 2015) 82–​87.

Climate-specific Impact Assessment and Monitoring  123 occasional infractions is more successful in supporting the shared achievement of communal outcomes. Neighbours can conspicuously see each other working towards a common end.142 The Glasgow Climate Pact—​on the shoulders of the Copenhagen Accord and Paris Agreement—​helpfully continues to build towards such practices.143

V  Climate Principle 4: Climate-​specific Impact Assessment and Monitoring Energy Transition Principle 4 (1) States must implement climate specific impact assessment and monitoring tools as set out in the Paris Agreement and related agreements. (2) States and non-​state actors must use these assessments and monitoring tools as part of their due diligence processes to implement the energy transition principles.   

The principles developed so far can only function if there is sufficient data to determine progress towards climate outcomes. Such data must be gathered at the outset through initial impact assessments and thereafter through monitoring. Customary international law requires states to conduct and consider impact assessments when there is a high likelihood of transboundary pollution leading to significant environmental harm in one or more neighbouring states.144 Such assessments must outline the specific potential environmental impacts of the planned activity, provide alternatives that might avoid environmental impacts, as well as outline measures to avoid them. Depending on the circumstances, it further requires consultations with affected states to satisfy the procedural elements of the harm-​prevention principle.145 Customary international law also recognizes a duty to continue to monitor environmental impacts after a project has been implemented.146 The classic international environmental law obligations are significantly augmented by international climate agreements. The UNFCCC requires that states include climate change considerations in their environmental impact assessment mechanisms.147 Further, states commit to the development, updating

142 See ibid. 143 See Koh (n 57). 144 See Pulp Mills on the Uruguay River (Argentina v Uruguay) (n 10) 83; Certain Activities/​ Construction of a Road (Costa Rica v Nicaragua) [2015] ICJ 665, 706 (16 December 2015). 145 Certain Activities/​Construction of a Road (Costa Rica v Nicaragua) (n 144) 706. 146 See Gabčíkovo-​Nagymaros Project (Hungary v Slovakia) (Judgment) (n 10) 78; see also ch 13. 147 UNFCCC, art 4(1)(f).

124  The Climate Principles and publishing of national source-​specific emissions, sinks, and mitigation programmes,148 as well as to promote scientific cooperation and data exchange.149 The UNFCCC imposes additional reporting requirements on annex I parties.150 The Paris Agreement similarly builds on these monitoring and reporting obligations. Reporting begins with the submission of an NDC.151 NDCs must be updated every five years.152 In addition, states must report national emission and sink inventories, NDC implementation data, and climate impact information.153 This information supports an expert review of climate action,154 as well as a climate stock-​take.155 The Glasgow Climate Pact mobilized these reports for further action. It highlighted early efforts by states updating, and increasing the ambition of, their NDCs.156 At the same time, it used the data to highlight the underperformance of collective goals in the first round of NDCs.157 This analysis supported commitment to scale up collaborative coordinated increased efforts to reduce net emissions.158 The Glasgow Climate Pact lent further urgency to this call by increasing the speed of collective analysis of NDCs to update NDC synthesis reports annually.159 Viewed together, these monitoring and reporting tools provide a means to govern up. NDCs support increasingly ambitious global climate action.160 Transparent, synthesized reporting allows for a neighbourly monitoring of progress—​and provision of support and expertise—​to increase action.161 This increased transparency is instrumental to building trust and community standards needed to secure incremental but exponentially increasing progress towards mitigation goals.

VI  Climate Principle 5: Climate-​specific Precaution Energy Transition Principle 5



(1) Stakeholders must act with precaution in devising and implementing energy transition approaches.

148

ibid art 4(1)(a)–​(b). ibid arts 4(1)(g)–​(h). 150 ibid art 4(2)(a)–​(b). 151 ibid art 4. 152 ibid art 4(9). 153 ibid art 13(7)(a)–​(c). 154 ibid art 13(11). 155 ibid art 14. 156 Glasgow Climate Pact (CMA.3), 24. 157 ibid 25. 158 ibid 26–​27. 159 ibid 30. 160 ibid 24. 161 ibid 30. 149

Climate Principle 5: Climate-specific Precaution  125   

(2) Precaution requires that stakeholders not take the lack of scientific certainty as a means for inaction. (3) In order to act with precaution, stakeholders must act on the basis of the presumption that the worst-​case scenario developed in nascent best scientific research will be validated in further research.

A  The Precautionary Principle in General International Law The precautionary principle remains controversial in general international law.162 It remains unclear whether the precautionary principle forms part of general customary international law. It also remains unclear what, precisely, a customary international law rule of precaution would require. Despite these difficulties in general international law, the precautionary principle is a weight-​bearing component of international environmental law. The foundational 1972 Stockholm Declaration only implicitly makes reference to precaution.163 Principle 14 of the Stockholm Declaration simply provides that ‘[r]‌ational planning constitutes an essential tool for reconciling any conflict between the needs of development and the need to protect the environment’.164 The Stockholm Declaration does not specify, whether, when or how precautionary approaches would be considered rational—​even if rational planning by implication includes precaution as a tool. This uncertainty was significantly reduced in the 1992 Rio Declaration. Principle 15 of the Rio Declaration states that ‘[w]‌here there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-​effective measures to prevent environmental degradation’.165 Different international environmental treaties have adopted varying formulations of the precautionary principle since around the time of the Rio Declaration.166 Despite this initial uncertainty, it is possible to break the precautionary principle into three elements. First, the precautionary principle has a threat element: it applies in the face of a specific kind of threat. Frequently, this first element requires not just any threat but instead requires a threat of serious or irreparable damage.167

162 This section draws on work previously published in Frédéric G Sourgens, ‘The Precaution Presumption’ (2021) 31 EJIL 1277. 163 Leading commentators invariably place the birth of the precautionary principle after the 1972 Stockholm Conference. See eg CUP Sands and Peel (n 2) 230; Birnie (n 16) 154; Weiss (n 11) 196. This predominant genealogy of the precautionary principle assumes a specific kind of precaution (one that proved and continues to prove somewhat controversial). A different genealogy treating precaution as discerning judgment is very much consistent with the 1972 approach even as it builds on it. On balance, we see merit in such an approach focused on discerning judgment. 164 1972 Stockholm Declaration, principle 14. 165 1992 Rio Declaration, principle 15. 166 See eg Sands and Peel (n 2) 230–​40; Birnie and others (n 16) 159–​64; see also Weiss (n 11) 199–​200. 167 See 1992 Rio Declaration, principle 15.

126  The Climate Principles Secondly, the precautionary principle applies when there is an uncertainty element: a state is prohibited from, or at the very least cautioned against, using scientific uncertainty as a reason for inaction.168 Thirdly, precaution requires a proactive protection measure: the state adopts measures that anticipate, prevent, or minimize the threat element.169 The second element is at the heart of the precautionary principle. Precaution concerns action in the face of a lack of scientific certainty. The precautionary principle requires that such uncertainty should not excuse inaction. Precaution thus is about our manner of understanding and anticipating the kind of threats codified in the threat element. Precaution acts epistemically; that is, it relates to knowledge or the validity of claims about the world, particularly when these claims justify counter-​measures. There are different ways in which one can deploy this second epistemic uncertainty element. First, it is possible to use precaution as a means to reverse burdens of proof.170 Although academically popular, this treatment of the epistemic element has been rejected in jurisprudence.171 Secondly, it is possible to use precaution as a means to lower standards of proof.172 This use of precaution is more nuanced than a reversal of standards of proof. However, this epistemic element does not fare well in the context of competing precautionary claims. How should one act when one course of action appears to create a serious threat to public health but the alternative course of action appears to create a serious economic threat?173 This understanding of precaution would be epistemically blind when made to choose between different paths each claiming a precautionary reason. This second way of interpreting precaution therefore would lead back to inaction (something which the principle itself enjoins) or to arbitrary action. Neither approach is epistemically tenable. Thirdly, one can view precaution as a means to formulate a presumption.174 This presumption would require decision-​makers to assume that the reasonable worst-​case scenario anticipated by nascent scientific discourse is in fact correct. This approach infers a reasonable worst-​case scenario from limited scientific evidence and extrapolation. It uses this worst-​case scenario as a basis for a precautionary measure prescribed by the precautionary principle. This approach allows one to contest the validity of the inference as well as to provide alternative scientific evidence. Further, when two competing precautionary claims are weighed against

168 Sands and Peel (n 2) 240. 169 ibid. 170 Caroline Foster, Science and the Precautionary Principle in International Courts and Tribunals, Expert Evidence, Burden of Proof and Finality (CUP 2011) 240–​80; Sands and Peel (n 2) 249. 171 See Pulp Mills on the Uruguay River (Argentina v Uruguay) (n 10) 71. 172 Birnie and others (n 16) 157. 173 This, notoriously, was the scenario faced by policy-​makers confronting Covid-​19. 174 This section draws on work previously published in Sourgens (n 162).

Climate Principle 5: Climate-specific Precaution  127 each other, it is possible to proceed on the assumption that the worst-​case scenario drawn by each will in fact prove correct to make a determination as to the most prudent course of action. Given its benefits, the third theory most aligns with the epistemic goals of the precautionary principle. Scientific uncertainty is not a reason for inaction because it can be overcome by way of extrapolation. At the same time, scientific uncertainty also does not compel specific action all of its own. It thus remains epistemically humble. This treatment of the precautionary principle lines up again with the 1972 Stockholm Declaration—​it provides a way to explain what it means to act rationally by providing a procedural explanation of discerning judgment. This consistency is a final reason to prefer the third explanation of precaution.

B  The Climate-​specific Precautionary Principle The climate regime includes two complementary versions of the precautionary principles. Both versions reproduce the general approach to the precautionary principle outlined above. While there is at this point strong scientific consensus on the threat posed by climate change, there remains significant scientific uncertainty about the severity and potential trajectories of climate change. There is therefore continued need for the precautionary principle to guide energy transition decision-​making. The UNFCCC codifies the precautionary principle in Article 3(3).175 Article 3(3) can be broken down into the three elements: threat (‘serious or irreversible damage’), uncertainty (‘lack of full scientific certainty’), and precautionary measures (‘take precautionary measures to anticipate, prevent or minimize the causes of climate change and mitigate its adverse effects’).176 With regard to the precautionary-​measures element, the UNFCCC provides further that ‘policies and measures to deal with climate change should be cost-​effective so as to ensure global benefits at the lowest possible cost’.177 The verb mood choice of ‘should’ indicates that precautionary measures are permissive. At the same time, the only limitations placed on precautionary measures concern cost-​effectiveness. The Paris Agreement does not re-​codify the precautionary principle. Its preamble does on its face limit the uncertainty element. It now refers to action taken “on the basis of the best available scientific knowledge’.178 This means that the uncertainty in question must still be supported by a strand of the best available scientific knowledge. This tightening of the uncertainty element reflects the progress



175

UNFCCC, art 3(3).

176 ibid. 177 ibid. 178

Paris Agreement, recitals.

128  The Climate Principles in climate science between the conclusion of the UNFCCC and the conclusion of the Paris Agreement. At the same time, the recitals in the Paris Agreement arguably strengthen what precautionary measures should be taken.179 It refers to the effectiveness and progressive nature of measures. It no longer refers to costs. This suggests that cost-​effectiveness is no longer a limitation of precaution. Instead, the new formulation ties measures to their anticipated climate outcomes and human rights repercussions.180 A presumption-​based approach can make sense of the function of the core uncertainty element in the UNFCCC as modified by the Paris Agreement. Scientific uncertainty exists currently because of multiple, ongoing competing research projects. Climate precaution therefore must use a reasonable aggregate worst-​case scenario as a decisional baseline to comply with the ‘best available scientific knowledge’ element of the Paris Agreement.181 Consequently, climate precaution must project the worst-​case scenarios generated by each of these ongoing research projects and then aggregate it. To comply with the requirement of basing its determinations in best science, this aggregation must account for the level of scientific support for each scenario. Crudely, this can be established on the basis of a scientific impact study. The IPCC’s research provides a good example why such an approach is rational.182 IPCC reporting aggregates different research outcomes to project climate change trajectories.183 These trajectories continue to reflect important uncertainty.184 For example, aggregate best science underestimated the loss of sea ice by an important margin.185 This suggests that an earlier reliance on aggregate worst case scenarios may be more in line with the precautionary principle than a purely best-​science approach. The move achieved at the conclusion of the Paris Agreement and then again at the conclusion of the Glasgow Climate Pact to embrace cooperative, solidarity-​ based global action to address climate change is deeply informed by a precautionary approach. The Glasgow Climate Pact held firm and further cemented the ambitious end of the climate goals expressed in the Paris Agreement. The Glasgow Climate Pact further set a net zero target by or around mid-​century.186 This goal itself reflects an unprecedented urgency on the part of policy-​makers. Precaution is critical to the climate regime because it allows an important counter-​weight to the impetus to pass on the costs of climate change and climate 179 ibid. 180 ibid. 181 ibid. 182 Valerie Masson-​Delmotte and others (eds), IPCC Global Warming of 1.5oC (IPCC 2019). 183 Hoegh-​Guldberg and others, ‘Impacts of 1.5oC Global Warming on Natural and Human Systems’ in Valerie Masson-​Delmotte and others (eds), IPCC Global Warming of 1.5oC (IPCC 2019) 175, 185. 184 ibid. 185 ibid 205. 186 Glasgow Climate Pact (CMA.3), 32, 39.

Climate Principle 5: Climate-specific Precaution  129 mitigation to future generations. This temptation can be supported by discounting future losses in light of an anticipation of future scientific advances. The precautionary principle is sceptical about such discounts. It rather anticipates a more urgent need for action that protects the climate system against waste of the remainder of the carbon budget.187 At the same time precaution is not a stand-​alone function. Rather, it is a part of a broader rational, discerning exercise of judgment.188 This judgment must accept the worst-​case climate scenario as true. It can nevertheless be responsive to non-​ climate imperatives like development even in the face of such scenarios. Precaution therefore provides an important means to test and contest different policy choices made at the national level in a cooperative, solidarity-​based regime.



187 See Neubauer (n 35). 188

See 1972 Stockholm Declaration, principle 14.

8

The Energy Equity Principles I Introduction The previous chapter began by discussing the substantive principles of climate law as they govern energy transition. Chapter 7 noted that climate law had an obvious claim in this discussion. Energy transition in large part is necessary because of climate change. The relationship of energy equity and energy transition is less readily apparent. Once spotted, it is clear that energy equity is at the heart of the energy transition paradigm as a photonegative of the climate imperative. In order to understand the role of energy equity as a separate area of principles governing energy transition, it is first necessary to define energy equity. Energy equity in the first place refers to affordable access to energy. Affordability is both a relative measure as well as an objective benchmark. It is a relative measure because what constitutes affordable, equitable access terms to energy in the US differs from what constitutes affordable, equitable access terms to energy, for example, in Ghana. In the first place, median household incomes, and thus affordability, differ ($67,521 (US) vs. $1,779 (Ghana)).1 More broadly, economic conditions, infrastructure, investment potential and capital markets differ from state to state. At the same time, affordable energy access is an objective benchmark. World society is dependent on energy for nearly every aspect of daily life.2 Consequently, the differences between equitable access terms in different jurisdictions should not distract from the basic observation that affordable access to energy is equally important to almost every human being on the planet. The reason that energy transition is an imperative today is that energy systems fulfil a core function in every economy. Economies require affordable energy access to run. Similarly, energy systems require robust economies to warrant the capital investment needed to install and operate them. Today’s greenhouse gas emissions are a function of the fact that fossil fuels are uniquely effective at providing affordable access to energy compared to other modes of energy generation. The resistance to the implementation of other forms of energy generation and consumption is a function, at least in part, of the fact 1 Emily A Shrider and others, ‘Income and Poverty in the United States: 2020’ US Census Bureau (14 September 2021) https://​www.cen​sus.gov/​libr​ary/​publi​cati​ons/​2021/​demo/​p60-​273.html; ‘Median Income by Country 2023’ https://​worldp​opul​atio​nrev​iew.com/​coun​try-​ranki​ngs/​med​ian-​inc​ome-​by-​ coun​try. 2 See ch 2.

132  The Energy Equity Principles that these other forms will have a potential negative impact on the ability of key parts of the economy (and many individuals and families) to source energy affordably. Thus, the need for affordable energy is the flipside of the climate imperative: without the need for (affordable) energy, there would be no climate crisis. Managing the climate crisis therefore could lead to an energy crisis. This chapter will outline five key legal principles that govern the demands for energy equity. It begins with establishing the existence and core meaning of the right to energy. It continues with the rules governing its implementation and the sovereign choice of means in realizing the right in question. It then establishes the rules governing the obligations of international cooperation in securing the right to energy. It next sketches the monitoring obligations attached to the right to energy. The last substantive principle discussed concerns the link between climate adaptation and the right to energy. Specifically, it submits that the right to energy inherently includes, and must be read consistent with, an obligation of adaptation. The chapter concludes by submitting that energy equity principles and climate principles are co-​equal. That means that is not possible to displace the energy equity principles for the benefit of climate outcomes. At the same time, it also means that energy equity does not have legal primacy over the climate imperative. Rather, both imperatives co-​exist and potentially clash with each other. The chapter concludes that this uneasy relationship between both sets of principles is already foreshadowed in climate instruments as well as the core instruments driving the international law of decolonialization. These principles are by no means the only principles of human rights law applicable to energy transition. For example, the right to a clean environment, as well as the right to life are central human rights concerns. These rights are crucially related to the other principles discussed in this Part. These rights nevertheless form a coherent whole—​they explain what energy transition must achieve in order to be successful on the energy side of the equation. These principles therefore are at the heart of the energy order themselves.

II  Energy Equity Principle 1/​Development Principle 2: The Right to Energy Energy Transition Principle 6: Right to Energy



(1) Peoples, communities, and persons have a right of affordable energy access at a price that fairly distributes the benefits and burdens of energy access. (2) States and energy transition stakeholders have an obligation individually and collectively to respect, protect, and fulfil the right to energy.

Energy Equity Principle 1/Development Principle 2  133



  

(3) States and energy transition stakeholders hold rights in global energy systems and global energy value chains as correlative rightsholders subject to constraints of reasonable use and the prohibition of waste. (4) States and energy transition stakeholders have an obligation progressively to realize the right to energy to the maximum of available resources consistent with the right to development. (5) States and energy transition stakeholders shall not discriminate in progressively realizing the right to energy.

A  From Decolonialization to the UN Sustainable Development Goals One of the fundamental concerns of decolonialization concerns the integration of former colonies into the world economic and social order on a footing of true equality.3 This concern is implicit for example in the Friendly Relations declaration.4 It comes to the fore more forcefully in the context of the New International Economic Order (NIEO) project, which demanded ‘[f]‌ull and effective participation on the basis of equality of all countries in the solving world economic problems in the common interest of all countries, bearing in mind the necessity to ensure the accelerated development of all developing countries’.5 Energy is of historical importance to this project. One political leader at the forefront of the decolonialist project was President Kwame Nkrumah of Ghana.6 Arguably, the backbone of this project domestically in Ghana was the Volta River project—​a project that was premised on hydro-​electric generation to power industrialization in Ghana in the span of a generation.7 The need for energy independence as a baseline for economic growth and true equality and independence historically runs through decolonialization in international law. Energy equity did not stay confined to the decolonialization discourse. Rather, it plays a central role in the path-​defining 1986 Brundtland Report on sustainable development.8 The report notes already in its overarching chapter on policy directions

3 Antony Anghie, ‘Imperialism and International Legal Theory’ in Anne Orford and Florian Hoffmann (eds), The Oxford Handbook of Theory of International Law (OUP 2016) 156, 161. 4 Friendly Relations Declaration, GA Res 2625, UN GAOR, 25th Session, UN Doc A/​RES/​2625 (1970), reprinted in 9 ILM 1292 (1970). 5 NIEO Declaration, General Assembly Resolution No 3201 (1 May 1974) UN Doc A/​RES/​S-​6/​ 3201, 4.b. 6 Adom Getachew, Worldmaking after Empire: The Rise and Fall of Self-​Determination (PUP 2019) 112–​13. 7 For a contemporary discussion of the project see TE Hilton, ‘Akosombo and the Volta River Project’ (1966) 51 Geography 251. 8 Our Common Future (World Commission on Environment and Development 1987).

134  The Energy Equity Principles that: (1) energy is ‘crucial to sustainable development’; (2) that ‘the average person in an industrial market economy uses more than 80 times as much energy as someone in sub-​Saharan Africa’; and that therefore (3) ‘any realistic global energy scenario must provide for substantially increased primary energy use by developing countries’.9 While the Brundtland Report lays out a policy proposal that is conscious of the environmental impact of energy development—​and recommends a global low energy pathway premised in energy efficiency measures—​it remained adamant that such a pathway ‘need not mean a shortage of essential energy services’.10 In this world, ‘GDP growth is not constrained’ by the significant capital expenditure needed to upgrade energy infrastructures in the developing world.11 While the Brundtland Report introduced the idea of energy equity in the sustainable development literature from a lens not typically associated with decolonialization (the report mentions colonialism only four times), the report stops short of expressing the key lessons implicit in its own reasoning. The Brundtland Report noted that it ‘was the quest for raw materials that underlay much of the competition between colonial powers and the subjugation of their holdings’.12 It placed this observation in the context of ‘interrelated problems of poverty, injustice, and environmental stress, competition for non-​renewable, land, or energy’.13 However, it avoided connecting the dots between ‘colonial . . . subjugation’ and the imbalance in energy investment in former ‘colonial powers’ and much of the rest of the world.14 The Brundtland Report therefore did not yet call for a global energy policy driven by concerns of global equality rooted in the history the report itself lays out. Instead, it recommended efficiency measures that on their face do not grapple with the reality of the infrastructure in place in the countries in question.15 Despite these shortcomings, the Brundtland Report placed energy equity firmly on the map of a global consensus on sustainable development. Through various iterations, energy equity—​the need to provide affordable energy to consumers and economies particularly in least developed countries—​became a standalone sustainable development goal. Its current version is Goal 7 of the Sustainable Development Goals of Agenda 2030. It seeks to ‘[e]‌nsure access to affordable, reliable, sustainable and modern energy for all’.16 Goal 7 now lists energy access (no matter its cost) ahead of energy efficiency.17 It further is explicit about the need for international cooperation to achieve energy equity around the world. 9 ibid 18, para 58. 10 ibid 138, para 114. 11 ibid 122, para13. 12 ibid 199, para 11. 13 ibid. 14 ibid 58, 199, para 11. 15 See ibid 138, para 114. 16 Transforming our World: the 2030 Agenda for Sustainable Development, UN General Assembly Resolution 70/​1 (25 September 2015) UN Doc A/​RES/​70/​1 https://​docume​nts-​dds-​ny.un.org/​doc/​ UNDOC/​GEN/​N15/​291/​89/​PDF/​N1529​189.pdf?Open​Elem​ent. 17 ibid 7.1, 7.3.

Energy Equity Principle 1/Development Principle 2  135 In its current form, therefore, the sustainable development goals realign with the ambition of decolonialization of securing affordable global energy access to provide economic opportunities and secure human capabilities for all. Importantly, it does so without invoking the language of imperialism or hegemony.18 In this way, it has attracted strong global rhetorical support for what was originally a highly contentious approach to the international political, economic, and social system. This rhetorical support has coincided with improvements in energy access.19 Nevertheless, this progress is mixed and even slowing.20 At the current pace ‘of progress, the world is still not track to achieve the SDG 7 goals by 2030’.21 This failure is the most acute in many of the countries that originally highlighted the need for energy equity in the first place, including Ghana.22 Recognition of energy equity as a policy imperative by world society as a whole therefore has not yet secured its achievement by any means.

B  The Right to Energy in Human Rights Instruments The right to energy is not just a policy desideratum expressed in Agenda 2030. Rather, it is a right anchored in international human rights treaties. This section representatively addresses two such conventions—​the ICESCR and the draft Convention on the Right to Development.

(1) The International Covenant on Economic, Social and Cultural Rights The right to energy is one of the rights necessary to the fulfilment of the rights recognized in the International Covenant of Economic, Social and Cultural Rights (ICESCR). Communities under the ICESCR have a collective right to their ‘own means of subsistence’.23 The rights recognized in the ICESCR expressly include the right to health, food, and education.24 They further include the right to work and thus to economic opportunity.25

18 Anghie (n 3) 156. 19 Fatih Birol and others, Tracking SDG7: The Energy Progress Report 2022 (International Bank for Reconstruction and Development 2022) 3. 20 ibid. 21 ibid 1. 22 As noted by the most recent tracking report of SDG7, the ‘two 20 access-​deficit countries are Afghanistan, Bangladesh, China, the Democratic Republic of Congo, Ethiopia, Ghana, India, Indonesia, the Democratic People’s Republic of Korea, Madagascar, Mozambique, Myanmar, Niger, Nigeria, Pakistan, Philippines, Uganda, Tanzania, and Vietnam’. ibid 64. 23 ICESCR, art 1(2). 24 ICESCR, arts 11–​13; African (Banjul) Charter on Human and Peoples’ Rights (27 June 1981), OAU Doc CAB/​LEG/​67/​3 rev5, 21 ILM 58 (1982), arts 16–​17; Asian Human Rights Charter, art 7.1; Inter-​American Convention on Human Rights, art 26; Charter of the Organization of American States, art 34. 25 ICESCR, art 6; African (Banjul) Charter on Human and Peoples’ Rights (n 24) art 15.

136  The Energy Equity Principles Critically, these rights all depend upon the creation of a sufficient energy infrastructure to deliver healthcare, sustenance, and schooling: hospitals, food refrigeration, and STEM education all require electricity.26 It is thus a state’s obligation to provide an energy infrastructure capable of delivering these outcomes to secure rights expressly codified in the Convention.27 Similarly, these obligations also arise out of the broader imperative that in ‘no case may a people be deprived of its own means of subsistence’ given that energy has become central to ‘subsistence’ given its link to food, water, and sanitation systems.28 The right to energy has not yet been recognized as a standalone right by a general comment of the Committee on Economic, Social, and Cultural Rights. The Committee is currently working on a General Comment on Sustainable Development that is likely to address energy.29 Even in the absence of such a general comment, it is possible to anticipate some of the contours of the right to energy from past General Comments. For example, General Comment 24 on Business Activities notes that ‘[p]‌rivatization is not per se prohibited by the Covenant, even in areas such as the provision of water or electricity, education or health care where the role of the public sector has traditionally been strong’.30 The inclusion of electricity in the list is telling as the right to water, education, and health have all been recognized under the Convention. Further, General Comment 24 continues that ‘[p]‌rivate providers should, however, be subject to strict regulations that impose on them so-​called ‘public service obligations’: in the provision of water and electricity, this may include requirements concerning universality of coverage and continuity of service, pricing policies, quality requirements, and user participation’.31 Again, the link to water is indicative that a right to energy dovetails a right to water functionally as well as substantively. Even if one were to reject such an inference, it is further clear that on the face of Comment 24 itself, states must impose public service obligations with regard to electricity on private providers as a matter of the Covenant. This suggests an obligation to protect with regard to potential interference by business actors. This means that the state must have some analogous public service obligations to fulfil

26 See Abhijit Banerjee and Esther Duflo, Good Economics for Hard Times (Public Affairs 2019) 221 (‘[F]‌or most Indians, additional consumption and additional energy consumption in particular is not a luxury. The very low consumption of energy in rural India today is due to a mode of existence that is often unpleasant and dangerous’). 27 ICESCR, art 2(1). 28 ibid. art 1(2). 29 General Comment on Sustainable Development and the International Covenant on Economic, Social and Cultural Rights, Status https://​www.ohchr.org/​en/​tre​aty-​bod​ies/​cescr/​gene​ral-​comm​ent-​ sust​aina​ble-​deve​lopm​ent-​and-​intern​atio​nal-​coven​ant-​econo​mic-​soc​ial-​and-​cultu​ral. 30 General Comment No 24 (2017) on State Obligations under the International Covenant on Economic, Social and Cultural Rights in the Context of Business Activities, UN Doc E/​C.12/​GC/​24, 21. 31 ibid.

Energy Equity Principle 1/Development Principle 2  137 when it provides such services directly. Else, the imposition of a public service obligation as an obligation to protect in the privatization context would make comparatively little sense. Following this logic, a state would thus have an obligation to fulfil universality of coverage and continuity of service in a covered region—​and universality of service more generally in the state in question (by itself or by way of privatization or private-​public partnership).32 Similarly, pricing policies must secure equitable access.33 Finally, user participation is a central part of energy policy planning obligations.34

(2) The Right to Development The right to energy is also a foundational right for the right to development. The right to development has already been codified in several regional human rights treaties. It is currently the subject of codification in a separate UN multilateral treaty, the Draft Convention on the Right Development already discussed previously. The relevant core paragraph of the Draft Convention on the Right Development is Article 4. Article 4(1) guarantees that every human being ‘the inalienable right to development, by virtue of which they are entitled to participate in, contribute to and enjoy civil, cultural, economic, political and social development that is indivisible from and interdependent and interrelated with all other human rights and fundamental freedoms’.35 Article 4(2), in turn guarantees ‘the fair distribution of the benefits resulting’ from development to every human person.36 Article 4 can only be fulfilled to the extent that the principles governing economic globalization are made to conform to human rights principles.37 The Draft Convention looks to provide economic opportunities sufficient to meet the requirements of a dignified human life to all and to each (ie enjoy economic, social, cultural, civil, and political development on the basis of fair distributions).38 Energy systems are central to the economic performance and economic growth needed to meet this obligation.39 The right to energy is instrumental to meet the right to development. Economic growth requires energy access.40 The state is a

32 ibid.; see also African (Banjul) Charter on Human and Peoples’ Rights (n 24) art 13(3) (‘Every individual shall have the right of access to public property and services in strict equality of all persons before the law’). 33 General Comment No 24 (n 30) 21. 34 ibid. 35 Convention on the Right to Development (Draft 2), art 4(1). 36 ibid art 4(2). 37 Diane Desierto, ‘Coming Full Circle on Human Rights in the Global Economy: International Economic Tools to Realize the Right to Development’ (2022) 18 Loyola University of Chicago Intl LR 1, 10. 38 Convention on the Right to Development (Draft 2), art 4. 39 See ch 2. 40 Alessio Terzi, Growth for Good: Reshaping Capitalism to Save Humanity from Climate Catastrophe (HUP 2022) 119–​21.

138  The Energy Equity Principles central player in providing such access.41 To fulfil the right to development, the state must strive to provide sufficient access to fuel economic activity and distribute the benefits and burdens of such access fairly to all under its jurisdiction. Article 23 of the Draft Convention reconfirms the same insight. It commits states to pursue and enact ‘[l]‌aws, policies and practices relating to development at the national and international levels are aimed at and contribute to the realization of sustainable development, consistent with States Parties’ obligations under international environmental law, climate change law and human rights law’.42 The Convention through its various drafts expressly and intentionally incorporates by reference the work on sustainable development since the Brundtland Report, including the Agenda 2030.43 The right to development includes the right to energy found in the Agenda 2030. This provides an independent basis for the right to energy in human rights instruments. This understanding of the right to energy is consistent with the framework of correlative rights, reasonable use and waste developed in Part I.44 The right to energy is a shared right. It depends upon an energy system jumpstarted, supported, and maintained by revenue from a critical mass of industrial, commercial, and residential consumers. Energy access is a matter of community, as it is clearly seen even with the development of renewable energy infrastructure. This community can thrive under a reasonable use paradigm and risks faltering without it.45 When viewed in this light, the correlative rights principle of reasonable use functionally aligns with the human rights concept of fair distribution.46 Because energy infrastructure is costly to plan, build and maintain—​and because once the choices are made, they lock in everyone in the area served by the new energy infrastructure—​use of these resources (and distribution of economic benefits as a result of their use) must be reasonable for all members of the community.47 Reasonable use and fair distribution therefore are functional equivalents in the context of the right to energy. The concepts of correlative rights reasonable use and waste further apply with additional force to the right to energy. Like the right to water, the right to energy is foundational of other rights central to human development and human flourishing. Energy, like water, provides access to economic opportunity, to educational

41 Diane Coyle, Cogs and Monsters, What Economics Is, and What It Should Be (Princeton University Press, 2021)127. 42 Convention on the Right to Development (Draft 2), art 23(a). 43 Convention on the Right to Development (Draft 1), art 22 comment 1. 44 See ch 6. 45 Elinor Ostrom, Governing the Commons, The Evolution of Institutions for Collective Action (CUP, 2015) 143–​81. 46 Convention on the Right to Development (Draft 2), art 4(2). 47 The issue is one of path dependence. For an interesting vignette of this energy path-​dependence in action see Terzi (n 40) 139 (discussing the competition between electric and internal combustion engine vehicles in early 1900s America).

Energy Equity Principle 1/Development Principle 2  139 advancement, and to health care etc. The reasonable use and potential waste of energy therefore affects not just energy access itself, but access to a myriad of other opportunities. That is why the General Comment No. 24 imposes strict conditions on the privatization of energy systems: unlike other goods and services, energy is power.48 To distribute energy therefore is to distribute economic power as well as ‘power’ in a more literal sense.49 The right to energy therefore must be managed as a commons because of the effects energy access has within a society across the spectrum. Unreasonable use, or an unfair distribution, of energy resources creates and hardens social stratifications within societies. This hardening of social stratifications is fundamentally wasteful. Ethically, it deprives people arbitrarily of human capabilities.50 Economically, it squanders growth potential. This missing growth potential has social consequences. Growth can serve society—​and an economy—​as a whole. Wastefully depriving persons of energy access therefore erodes the very conditions for continued social success.51 It teeters on creating a tragedy of undermining confidence in energy systems were no such tragedy needed to exist.

C  Formation of Customary International Law The right to energy is firmly ensconced in a widely subscribed human rights treaties. This should mean that customary international law is irrelevant in most instances. In the context of the right to energy, there are important wrinkles to this truism. First, the US signed but never ratified the ICESCR.52 Secondly, EU Member States have on the whole been more sceptical about the right to development.53 It is thus important to establish that a customary international human rights rule could in fact bind the US and EU Member States. The first element of custom is significant state practice.54 Such practice is reasonably straightforward. Electricity access was frequently guaranteed through 48 General Comment No 24 (2017) on State Obligations under the International Covenant on Economic, Social and Cultural Rights in the Context of Business Activities, UN Doc E/​C.12/​GC/​24, 21. 49 See William Neuman, Things Are Never So Bad They Can’t Get Worse: Inside the Collapse of Venezuela (St Martins Publishing 2022) 108. 50 See Martha C Nussbaum, Creating Capabilities: The Human Development Approach (HUP 2011); Amartya Sen, The Idea of Justice (HUP 2009) 253; Andie Davis and Tsegaye Lemma, Capacity Development: A UNDP Primer (UN Development Programme 2015). 51 See Neuman (n 49) 134. The ‘black-​out’ chapters in the book highlight the link between electricity, dignified life, and the loss of social order and their connection to policy choices. 52 Status, International Covenant on Economic, Social, and Cultural Rights, https://​tbi​nter​net.ohchr. org/​_​layo​uts/​15/​Tre​atyB​odyE​xter​nal/​tre​aty.aspx?tre​aty=​cescr&lang=​en. 53 See EU General Statement, 22nd Session of the Working Group on the Right to Development (22 November 2021) https://​www.eeas.eur​opa.eu/​dele​gati​ons/​un-​gen​eva/​hrc-​22nd-​sess​ion-​work​ing-​ group-​right-​deve​lopm​ent-​eu-​gene​ral-​state​ment​_​en?s=​62. 54 North Sea Continental Shelf (Germany v Denmark, Germany v Netherlands) [1969] ICJ Rep 3, 44 (20 February 1969).

140  The Energy Equity Principles state-​supervised utilities or through regulated energy marketplaces.55 This utilities mechanism imposed precisely the kind of restrictions on utilities discussed in the context of ICESCR General Comment 24.56 States as a general rule therefore acted consistently with the right to energy even and particularly in times of energy shortages.57 The second element of custom is a sense of legal obligation (opinion juris).58 Proving opinion juris is somewhat complicated in the context of the right to energy. The EU, for example, expressly reserved that its votes supporting the UN Development Goals were policy-​based rather than as evidence of a sense of legal obligation.59 This protest is somewhat belied by the justifications provided for state aid in the context of energy shocks felt in Europe in 2022. This justification suggests that an internal sense of equity within the market operating on the basis of a fair distribution of hardships motivated EU policy.60 This justification is eloquent with a sense of legal obligation towards the right to energy.

III  Energy Equity Principle 2: Sovereign Choice of Means of the Realization of the Right to Energy Energy Transition Principle 7



(1) States must progressively realize the right to energy alongside and together with the progressive realization of other relevant human right to the maximum of available resources. (2) States may determine their own energy transition pathways consistent with the principle of sovereign energy equality (Energy Transition Principle 2) in a non-​discriminatory manner in light of their specific contexts and the specific impacts of policy pathways on the progressive realization of rights.

55 On the development of electric utilities in the US see Alexandra Klass and Rebecca Wilson, ‘Local Power’ (2022) 75 Vanderbilt LR 93, 128–​33. For the global picture see Vincent Petit, The New World of Utilities: A Historical Transition Towards a New Energy System (Springer 2022) 2. 56 See Petit (n 55) 2 (noting the traditionally heavy regulation of global electricity utilities). 57 See Laurence Tubiana and others, ‘Between Crises and Decarbonization: Realigning EU Climate and Energy Policy for the New “State of the World”’ Florence School of Regulation (June 2022) https://​ fsr.eui.eu/​wp-​cont​ent/​uplo​ads/​2022/​06/​Manife​sto.pdf. 58 North Sea Continental Shelf (Germany v Denmark, Germany v Netherlands) (n 54) 44. 59 See EU General Statement, 22nd Session of the Working Group on the Right to Development (22 November 2021) https://​www.eeas.eur​opa.eu/​dele​gati​ons/​un-​gen​eva/​hrc-​22nd-​sess​ion-​work​ing-​ group-​right-​deve​lopm​ent-​edu-​gene​ral-​state​ment​_​en?s=​62 60 See Communication from the Commission: Temporary Crisis Framework for State Aid Measures to Support the Economy Following the Aggression against Ukraine by Russia (24 March 2022) 2022/​ C 131 I/​ 01 https://​eur-​lex.eur​opa.eu/​legal-​cont​ent/​EN/​TXT/​HTML/​?uri=​CELEX:5202​ 2XC0​324(10)&from=​EN.

Energy Equity Principle 2  141

  

(3) States must ensure that any energy transition pathway impairing the current realization of the right to energy not discriminate against or otherwise impermissible deprive affected persons of their enjoyment of human rights.

A  The Obligation of Progressive Realization of Human Rights Under the ICESCR, each state is obligated to take steps towards ‘achieving progressively the full realization’ of economic, social, and cultural rights ‘to the maximum of its available resources’.61 This standard provides flexibility to states in two ways. First, the fulfilment of rights is limited by ‘available resources’. A state is not obligated to go beyond its resources to secure the fulfilment of rights.62 The realization of human rights is not one-​size-​fits all. Rather, it is sensitive to and cognizant of local circumstances. Secondly, states have an obligation progressively to realize all rights. Different policy pathways of necessity will favour the faster realization of some rights over others in the short term.63 Limited resources mean that states will have to choose, for example, between investments in vaccines or primary education, even as both the right to health and the right to education are recognized human rights. The state simply cannot spend the same fiscal income twice. So long as the policies in question continue to strive to realize all rights in the long term, states have a margin of appreciation in determining how they will realize rights at particular moments in time. States thus in principle have a choice of means of which rights to privilege over others. This entails that states also have a choice of means of how progressively to realize any specific right. Different means to implement the same right are available to the state (say, securing treatments vs. securing vaccines).64 As a general rule, states are given broad latitude how to fulfil the rights in question at any point in time.65 The flexibility has limits. The obligation of realization of rights is one of result, not conduct: it requires the full realization of the rights in question after taking progressive steps towards that end.66 This imposes limitations on a state’s discretion:67 61 ICESCR, art 2(1). 62 General Comment No 3 (1990) on the Nature of States Parties’ Obligations (art 2, para 1 of the Covenant), UN Doc E/​C.12/​GC/​24, para 10. 63 ibid para 9. 64 On the flexibility in general see Diane Desierto, Public Policy in International Economic Law: The ICESCR in Trade, Finance, and Investment (OUP 2015) 75. 65 Ben Saul and others, The International Covenant on Economic, Social and Cultural Rights: Commentary, Cases, and Materials (OUP 2014) 155. 66 ICESCR, art 2(1). 67 General Comment No 3 (1990) on the Nature of States Parties’ Obligations (n 62) 9.

142  The Energy Equity Principles • The state may not choose not to take steps towards the full realization of rights. Further, states must use their maximum resources to attain rights. When policy choices for example favour lessening fiscal burdens without the goal of realizing more rights in the long-​term, the progressive realization is likely threatened. • ‘Progressive realization’ is difficult to reconcile with a reduction in rights fulfilment. Such reductions are not prohibited, as such. However, they require significant justification.68 • Finally, policies fulfilling rights may not discriminate ‘on the basis of race, color, sex, language, religion, political or other opinion, national or social origin, property, birth or other status’.69 This prohibition significantly limits the discretion of states to favour certain kinds of insiders over outsiders in the securing of key rights under the Covenant.

B  The Progressive Realization of the Right to Energy in the Context of Energy Transition The principle of progressive realization of rights has important repercussions for the right to energy. In the first place, the principle of progressive realization does not diminish energy sovereignty. Each state may choose the manner and fuel mix with which it will meet the demands of the right to energy (subject always to other applicable rules of national and international law). States can choose to meet energy demands by nuclear energy or by renewables, by gas-​fired, or coal-​fired power plants. The right to energy is not limited to a specific source of energy generation. In addition, states will have to justify steps to reduce energy availability. Some energy transition pathways focus on a reduction in energy to tackle climate change—​a reduction that outpaces efficiency measures.70 Such steps would be inherently suspect and require justification under the ideals of progressive realization.71 This is particularly the case when energy access is seriously impaired to the point of threatening human health or well-​being. Energy intermittence can lead to such scenarios in the context of extreme temperatures. A reduction in energy availability that leads to long brown outs or blackouts under such circumstances is difficult to reconcile with the obligation to take steps progressively to realize the right to energy.

68 Saul and others (n 65) 152. 69 ICESCR, art 2(2). 70 Stéphanie Bouckaert and others, Net Zero by 2050: A Roadmap for the Global Energy Sector (4th edn, IEA 2021) 67–​69. 71 See Saul and others (n 65) 152 (discussing retrogression in general).

Energy Equity Principle 3/Development Principle 3  143 Finally, the goal of progressive realization must always be the long-​ term securing of full energy access at an affordable price. While policy choices can favour other rights in the process, they cannot completely ignore the right to energy. This means, in turn, that energy trajectories reducing available energy resources, net of increased efficiency measures, are not consistent with the fulfilment of the right to energy nor with the right to development. In principle, policymakers must aim at meeting full energy demand.

IV  Energy Equity Principle 3/​Development Principle 3: Global Cooperation on Energy Equity Energy Transition Principle 8



  

(1) States and stakeholders must cooperate to fulfil the right to energy to the maximum of globally available resources. (2) States and stakeholders must adopt policies and measures to ensure the transfer of technology necessary to support the right to energy in states with severely limited energy access so as to permit for a fair access to a global economic marketplace for all states, peoples, and communities. (3) States and stakeholders must support the installation of energy systems and energy value chains needed to support a globally fair distribution of benefits and burdens of energy transition through adequate finance, financial support, and investment.

States have an obligation to cooperate in order to secure the right to energy. This obligation to cooperate is codified in the leading human rights instruments. The obligation to cooperate and to act with solidarity set out in Climate Principle 3 of common but differentiated responsibility similarly support the duty to cooperate regarding the right to energy.72 Before Glasgow, the duty to cooperate did not clearly entail a duty fully to secure the global right to energy. Chapter 7 already outlined the general contours of the duty to cooperate and solidarity.73 In summary, the duty to cooperate requires engagement in good faith.74 Cooperation is an obligation of conduct rather than result. Paired with solidarity element of a shared goal, cooperation can require specific, definite action to rally



72

See ch 7. See ibid. 74 See Convention on the Right to Development (Draft 2), art 13(4)(i). 73

144  The Energy Equity Principles to the aid of the state, group, or person to achieve shared goals.75 It thus provides a goal of cooperation that exceeds the obligation to engage in good faith. The right to energy will not be fulfilled by states acting alone. Energy systems are at the heart of a global economic order.76 Energy systems themselves are not self-​contained but rather rely on global supply chains of their own.77 This means that the right to energy can only be achieved through cooperation. One aspect of this right is an obligation to respect energy access already achieved through existing energy value chains. This obligation to respect is codified for example and in Article 5(1) of the ICESCR and in Article 13(2)(a) of the Draft Convention on the Right to Development.78 This obligation to respect (and the arguable obligation to protect as well as respect) will be fleshed out in Chapter 9. Another aspect of the duty to cooperate concerns the full realization of the right to energy. It concerns the positive fulfilment of the right to energy. The duty to cooperate applies in the context of right fulfilment.79 This obligation to cooperate in the context of the right to energy requires states to cooperate towards the achievement of global equitable access. Sustainable development goal 7 discussed above is an authoritative statement of achievable, medium term global equitable energy access outcomes.80 States therefore have an obligation to cooperate towards the fulfilment of sustainable development goal 7 as a matter of the right to energy under the ICESCR and other regional human rights treaties. This first obligation to cooperate principally concerns energy systems themselves. It requires states to finance the expansion of energy systems and infrastructure,81 to transfer clean energy technology,82 to train, and educate with regard to energy technology.83 The duty to cooperate further requires cooperation with regard to the world economy as a whole. Energy systems are highly capital intensive. Deployment of new energy systems requires economic growth to justify this investment by increased demand. The duty to cooperate with regard to the right to energy requires support for market-​and innovation-​based global growth. Energy is only affordable and deployable if there is sufficient economic opportunity. This requires an 75 Rüdiger Wolfrum, ‘Solidarity’ in Dinah Shelton (ed), The Oxford Handbook of International Human Rights Law (OUP 2013) 401, 408. 76 See ch 2. 77 See ibid. 78 See ICESCR, art 5(1); Convention on the Right to Development (Draft 1), art 13(2)(a), art 13 comment 4. There is significant discussion as to the extraterritorial scope of the ICESCR. For a summary of this discussion see Desierto (n 64) 124–​33. Due to a different focus, Professor Desierto does not look to art 5(1) of the ICESCR in this context. The focus on art 5(1) here is motivated by the connection between art 5(1) and the duty to protect. The signals of ‘nothing’ and ‘any’ in art 5(1) together with the broad scope of ‘State, group or person’ on its face includes a prohibition of extraterritorial activity that is aimed at the destruction of a right as extraterritorial activity is still activity. 79 Convention on the Right to Development (Draft 2), art 13(2)(a). 80 Transforming our World: the 2030 Agenda for Sustainable Development (n 16) 7. 81 ibid 7.b. 82 ibid 7.a. 83 ibid.

Energy Equity Principle 3/Development Principle 3  145 adaptation of world economic systems and international economic law to support such growth in order to fulfil the right to energy through international cooperation. The definition of development consistent with such a result in the Draft Convention on the Right to Development along with the reference to development in core international economic law instruments supports this reading of the obligation to cooperate.84 The duty to cooperate to fulfil the right to energy in the final analysis requires the meaningful expansion of economic globalization to provide opportunities for development in states lacking basic energy access.85 Economic globalization provides the economies requiring cooperation to fulfil the right to energy with the growth potential to sustain energy investments.86 This growth potential needs to be managed so as to provide future-​looking growth opportunities to states in need of cooperation (as opposed to trapping those economies in obsolete economic paradigms as discussed in the last chapter).87 At the same time, global growth potential provides a means to achieve this goal as it promises to support global rather than exclusively local growth, thus benefiting both the recipient and the cooperating economies alike.88 At the same time, as discussed already, the duty to cooperate is an obligation of conduct rather than an obligation of result.89 Consequently, the duty to cooperate does not of itself optimally support the fulfilment of energy equity outcomes. States would potentially need to be willing to accept early relative losses to provide means for economic opportunity in third states sufficient to warrant the construction of energy infrastructure. These short-​term losses would be more than compensated through the innovation and growth potential added to the world economy by integrating the new economies. Yet, states are frequently unwilling to accept domestic losses given the trauma generated by the losses suffered due to globalization in the 1990s.90 The duty to cooperate alone does not require states to assume such losses. To solve this problem requires steps in two different directions. First, the right to energy must be secured domestically in industrial and post-​industrial economies in a meaningful way to avoid imposing relative losses on groups vulnerable 84 See Diane A. Desierto, ‘The Human Right to Development as a New Foundation for International Economic Law’ (2023) 31 Tulane Journal of International Law 1. 85 For a fuller articulation of this point see Frédéric G. Sourgens, ‘A Parisian Consensus’ (2022) 60 CJTL 657. 86 Terzi (n 40) 182–​83; see also William D. Nordhaus, The Spirit of Green (PUP, 2021) 162. 87 See Carlota Perez, Technical Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages (EE, 2003) 65. The point here is to avoid precisely the path-​dependence and innovation rent lock-​ins in the global north by the so-​called demonstration effect. 88 Philippe Aghion and others, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations (HUP 2021) 105. 89 See ch 7. 90 Binyamin Appelbaum, The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society (Back Bay Books 2019) 323–​25. The problem ultimately is not one of globalization but rather of a failure to distribute the benefits and burdens of globalization through appropriate fiscal policies domestically. Terzi (n 40) 64–​75, 211–​13.

146  The Energy Equity Principles to increased globalization in industrial and post-​industrial societies. Energy prices must remain affordable. States are already acting in this regard through energy subsidies in 2022.91 More importantly, states must look to the domestic economic opportunity as part of the right to energy. Respecting and protecting the right to energy domestically in industrialized and post-​industrialized economies crucially requires states to respect and protect the economic opportunity of those most disadvantaged by economic realignments here, as well. The mechanics that embed the right to energy in the global economy hold true with equal force with regard to the right to energy in the domestic economy. Energy transition provides unique opportunities to support economic growth in areas negatively affected by economic globalization through increased energy development.92 Such a focus on domestic economic opportunity through energy growth can blunt the resistance to creating economic opportunity abroad. Secondly, the right to energy must meaningfully be combined with the common-​ but-​ differentiated-​ responsibility climate principle. Climate action must be global. This entails solidarity obligations as recognized for example in the Glasgow Climate Pact.93 The solidarity obligations in the climate context must secure the right to energy in developing countries in order to secure their participation in emission reduction. Thus, the limits of cooperation in the right to energy can be overcome by placing the right to energy alongside differentiated responsibility in climate law. There is thus a means synergistically to combine climate and energy equity principles even as they also create very obvious potentials for tension with each other. The idea of global cooperation in the context of the right to energy is functionally consistent with the matrix of correlative rights, reasonable use, and waste. Global cooperation focuses not on a national society, but on a world society. The concerns raised in the context of the right to energy within a national society similarly resonate in the context of world society. Energy equity is a core concern not just to leverage growth in national economies. Energy equity is a global lever as well. Energy transition demonstrates the need for such a global lever as no one state can solve climate alone. Rather, the technological innovation needed in order to navigate energy transition successfully outstrips the capabilities of any one state 91 ‘Why Governments Should Target Support Amongst High Energy Prices’ OECD (30 June 2022) https://​www.oecd.org/​ukra​ine-​hub/​pol​icy-​respon​ses/​why-​gove​rnme​nts-​sho​uld-​tar​get-​supp​ort-​ami​ dst-​high-​ene​rgy-​pri​ces-​40f44​f78/​. 92 For one such increase due to investment in the fossil fuel sector see ‘U.S. Fracking Boom Added 725,000 Jobs –​Study’ Reuters (6 November 2015) https://​www.reut​ers.com/​arti​cle/​usa-​frack​ing-​emp​ loym​ent-​study/​u-​s-​frack​ing-​boom-​added-​725​000-​jobs-​study-​idUSL8​N131​59X2​0151​106. For similar impacts of the renewable sector see ‘DOE Finds Record Production and Job Growth in U.S. Wind Power Sector’ USDE (16 August 2022) https://​www.ene​rgy.gov/​artic​les/​doe-​finds-​rec​ord-​pro​duct​ion-​ and-​job-​gro​wth-​us-​wind-​power-​sec​tor. 93 See ch 7.

Energy Equity Principle 4/Development Principle 4  147 or group of states. Although the slogan may have worn thin through constant use, energy transition requires an all-​of-​humanity approach to pull it off in time. This means that world society must be mindful of the correlative rights dimensions of energy equity on a global stage and not just on a national one. Else, the waste of not deploying novel forms of energy access where they are most needed is likely to aggregate with disastrous consequences for all.

V  Energy Equity Principle 4/​Development Principle 4: Right to Energy-​specific Monitoring and Participation Energy Transition Principle 9

(1) Stakeholders must monitor and transparently communicate regarding their fulfilment of the right to energy. (2) Affected persons have a right to free, active, and meaningful participation in decision-​making implementing the right to energy, particularly in the context of energy transition.



  

The right to energy functionally requires similar monitoring to climate law.94 Human rights instruments require such monitoring and reporting. For example, the ICESCR requires its parties to submit ‘reports on the measures which they have adopted and the progress made in achieving the observance of the rights recognized herein’.95 These reports encourage the ‘indicat[ion of] factors and difficulties affecting the degree of fulfilment of obligations under the present Covenant’.96 These reports are then reviewed by the Economic and Social Council.97 This review is robust and can also bring in additional actors.98 The right to energy-​ specific monitoring further supports an active engagement process with affected parties. The Draft Convention on the Right to Development highlights the importance of participation in general by listing participation as the first of the Convention’s general principles in Article 3.99 Such participation further must be ‘free’, ‘active’, and ‘meaningful’.100



94 ibid. 95

ICESCR, art 16(1). ibid art 17(2). 97 ibid art 16(1) 98 ibid art 17–​22. 99 Convention on the Right to Development (Draft 2), art 3(a). 100 ibid art 4(1). 96

148  The Energy Equity Principles Such meaningful participation in decision-​making processes surrounding the right to energy is an individual right (intuitively, given the weight-​bearing importance of the right to energy to economic opportunities.) This participation concerns not only the fulfilment of the right to energy as such, but also the ‘fair distribution of the benefits’ from the fulfilment of the right to energy.101

VI  Energy Equity Principle 5: The Adaptation Imperative Energy Transition Principle 10

(1) Stakeholders must support the adaptation of energy systems and energy value chains to meet the demands created by the effects of climate change, in a manner that fairly distributes access to energy and access to energy-​ intensive adaptation methods. (2) Stakeholders must cooperate globally to ensure that states, peoples, and communities vulnerable to the effects of climate change have all necessary resources to install and operate energy systems needed to support local adaptation efforts, including but not limited to providing finance, financial support, and investments.



  

The right to energy has additional urgency. Without energy access, it is impossible to adapt to the worsening consequences of climate change. Climate change is leading to sea level rise, record floods, draughts, and extreme weather events. It further affects regional hydraulic cycles, with significant effects for sustenance farming to industrial farming to industrial production and so on. International climate agreements, chief among them the Paris Agreement and the Glasgow Climate Pact, address adaptation.102 The adaptation obligations outlined in international climate treaties oblige states to cooperate on adaptation measures.103 Adaptation again follows a national choice of means approach.104 Climate treaties further promise adaptation finance and technology transfer with regard to adaption efforts.105 Climate treaties impose broadly similar planning and reporting obligations in the context of adaptation as they do in the context of



101

ibid art 4(2). Paris Agreement, art 7(1). 103 ibid arts 7(2), 7(6), 7(13), 9(1); Glasgow Climate Pact (CMA.3), 7, 11, 14–​19. 104 Paris Agreement, art 7(5). 105 ibid art 7(7). 102

Energy Equity Principle 5: The Adaptation Imperative  149 mitigation.106 Climate treaties stand in the context of similar human rights obligations given the central human rights impacts of climate change. One of the key resources needed to adapt to climate change is increased energy access. Record heat and record cold become more manageable with air conditioning and heating respectively.107 In the absence of such temperature control, increased mortality is already observable at current global temperatures.108 This over-​mortality will increase.109 Air conditioning and heating provide significant relief against such extreme temperature events.110 Both require increased energy access. Increasing energy access therefore is one of the key preconditions to address over-​mortality caused by climate change. (Other effects of climate change similarly increase the energy intensity of adaptation response. For example, floods can be mitigated by water pumps. These pumps again require electricity. Malnutrition due to lack of access to locally grown foods can be addressed by transporting in food—​ this again requires energy for transport and refrigeration, and so on.) One of the first steps of adaptation planning must set out appropriate energy access to support broader adaptation efforts. Any growth in energy development is only feasible if there is an economic base for the installation of new energy sources. This means that adaptation requires not just a planning for the energy systems of the future. It also requires a broader planning for markets that can support the increased energy costs. As there is a globally increased demand for adaptation goods and services, in principle global adaptation itself should provide some of the growth opportunities to support adaptation.111 This will probably not be enough given that climate change similarly destroys existing businesses. Innovation around a post-​ climate change economy will therefore need to generate the kind of growth that will permit the installation of sufficient energy resources to manage adaptation. This entails that global adaptation planning must create the conditions in which states most in need of energy access to fight the effects of climate change also be given access to the innovation potential to support the installation of that energy capacity.112 These states overwhelmingly are located in Africa and Asia, in the Global South.113 These are frequently not the states one associates with innovation 106 ibid arts 7(9)–​7(11); Glasgow Climate Pact (CMA.3), 9–​10. 107 Matthew E Kahn, Adapting to Climate Change: Markets and the Management of an Uncertain Future (YUP 2021) 47. 108 ‘Climate Change and Health’ World Health Organization (30 October 2021) https://​www.who. int/​news-​room/​fact-​she​ets/​det​ail/​clim​ate-​cha​nge-​and-​hea​lth. 109 ibid. 110 See Kahn (n 107) 47. 111 See ibid 112. 112 ibid 85. 113 CH Trisos and others, ‘Africa’ in H-​O Pörtner and others (eds), Climate Change 2022: Impacts, Adaptation and Vulnerability, Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (CUP 2022) 1285, 1289; R Shaw and others, ‘Asia’ in H-​O Pörtner and others (eds), Climate Change 2022: Impacts, Adaptation and Vulnerability, Contribution of Working Group II to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (CUP 2022) 1457, 1458.

150  The Energy Equity Principles drivers on climate adaptation.114 Yet, existing conditions in country for better or for worse mean that they are far better positioned to innovate for the post-​climate change economy by sheer necessity. Yet, this innovation will require support to come off.115 Economic productivity declines drastically under extreme climate conditions.116 This means that many of the adaptation tools need to be shared to allow these economies to get back on their feet. The obligation of adaptation finance contained in the Paris Agreement and reiterated in the Glasgow Climate Pact therefore are of critical importance to support the right to energy.117 Adaptation finance to support the expansion of energy infrastructure in Global South states needed to combat the worst effects of climate change is an obligation of international solidarity.118 Importantly, this solidarity is not a one-​way street in which ‘rich’ states bestow charity and technological hand-​ me-​downs to the Global South. It is an investment in global innovation capacity—​ a climate Marshall plan. Given the necessity for innovation in those countries, the tools are likely to be used fruitfully to find solutions that will support global growth even in original financing countries. Adaptation finance therefore is not an expenditure without return on investment for investor states. It is a matter of reasonable use of the global innovation potential to navigate the imperatives of energy transition.

VII Conclusion The discussion in this chapter has outlined five energy equity principles. There is a significant potential for competition between the energy equity principles discussed and the climate principles discussed in the previous chapter. The energy equity principles demand an expansion of energy access. This in turn has a potentially negative impact in that it limits available climate change mitigation pathways. Climate principles and energy equity principles therefore can clash. When these principles clash, it is not possible to give an a priori preference to one set of principles over another. The regimes are not a hierarchical relationship with each other. Consequently, there are circumstances in which action that seems 114 Terzi (n 40) 183. 115 See Aghion and others (n 88) 174–​93. Aghion and others discuss here the role of the state as a jump-​starter of innovation in the context of mitigation rather than adaptation. The lessons hold by analogy for both. Once a marketplace is created, technology diffusion will allow firms to benefit globally from the innovation so made. The difference is that in the mitigation context, there is an immediate benefit of mitigation to third parties (fewer emissions assist global climate efforts far away from the emission source). Adaptation measures would have to be purchased and installed locally. This tends to support the market for such products and services as it is not possible (or at least less possible) to free ride, thus further strengthening the marketplace once it has been given the necessary jump-​start. 116 See Kahn (n 107) 7. 117 See Paris Agreement, art 9; Glasgow Climate Pact (CMA.3), 14–​19. 118 See ch 7.

Conclusion  151 to be an obvious means to satisfy one set of principles is prohibited by another. In the context of a rising climate emergency and energy emergency, this is disconcerting: there is a need for action on both fronts. Inaction on either front is frequently not an option. Adopting a wait and see attitude, therefore, is not acceptable. The human rights logic outlined in the context of progressive realization provides an initial look at how such conflicts can be resolved. In the first place, the goal of any action must be the progressive realization of all rights. This means that any set of actions in the long term must be able to justify a maximal realization of both concerns—​climate and energy access—​over the long term. To the extent that such a justification is possible, different states are entitled to take different approaches to progressive realization of rights. That being said, this chapter has also shown that the right to energy/​energy equity principles and the climate principles in fact dovetail with each other. It is possible, and indeed necessary, to read these sets of principles together as they mutually reinforce each other. The obligations of a just transition cannot be met without regard for the right to energy. This is certainly true internationally due to the principles of solidarity and differentiated responsibility. It is also true domestically as any impairment of a right, including the right to energy, is subject to the obligations of free, active, and meaningful participation. Further, substantively, the realization of rights -​and the impairment of rights—​demands a fair distribution of burdens and benefits. This distributional imperative in human rights law underscores the obligation to secure a right to energy and the concomitant economic opportunities domestically to comply with a broader human rights-​based energy transition approach. It is thus possible to recognize the first contours of a means of integrating the different legal principles governing energy transition. They all function according to a logic of correlative rights that impose a reasonable use, fair distribution, and a prohibition of waste. This logic of correlative rights is at the heart of a development-​ based, human-​rights driven transition. The following chapters will highlight how these principles can continue to be integrated with each other to provide equitable, reliable, sustainable, and just energy access following the energy transition.

9

The Energy Security Principles I Introduction The previous chapter discussed the substantive principles of energy equity governing energy transition. It outlined the importance of affordable energy access and the right to energy as a co-​equal governance value of energy transition to climate change mitigation. Energy security adds a further wrinkle to energy transition governance. It is not immediately obvious from the implicit assumptions discussed in Chapters 7 and 8 that energy markets deliver energy efficiently, reliably, resiliently, and without geopolitical interference. Once this assumption is tested against real-​world experience, it is clear that energy security is of tantamount importance to energy transition governance due to the potential for waste energy insecurity introduces into global energy systems (and world order in general). In order to understand the role of energy security as a separate area of principles governing energy transition, it is first necessary to define energy security. As discussed in more detail below, energy security refers to reliable and resilient access to energy. The focus of Chapter 8 was on the affordability of energy access. Problematically, something can be both more affordable and less reliable or more affordable and more reliable but less resilient (if one wishes to get from one end of a large city to another during rush hour, it is more affordable to take a subway. On a normal day, the subway is more reliable in getting a person from A to B on time because it completely avoids above-​ground traffic. At the same time, the subway is less resilient as one malfunction in one train can upset the entire train system). Energy security is an imperative because energy equity is an imperative: energy systems fulfil a core function in every economy. In making decisions about energy systems, energy security concerns loom large as reliable and resilient energy systems are critical to producing desired outcomes constantly without significant costs of energy interruption on local, regional, national, and world societies. This reliability and resilience can, however, cause decision-​makers to choose inefficient, expensive, and polluting forms of energy to protect economies against energy shocks. Energy security thus is potentially at odds with energy equity and climate mitigation. Energy security concerns introduce unique dangers in the current phase of energy transition that should not be underestimated. As it stands, energy transition as it plays out today is highly competitive from the geopolitical perspective. This competition introduces the incentives to view energy insecurity as a core

154  The Energy Security Principles concern—​energy transition introduces a new paradigm, the (loss of) control over which has epochal geopolitical consequences. The duties of cooperation and solidarity developed in the chapters outlining the climate principles and energy equity principles should hold these competitive conditioning factors at bay. They can only do so successfully if these duties of cooperation and solidarity are seen also as an energy security imperative. To this end, there must be a bottom-​up practice accepting these principles as both binding and prudent. As this chapter will discuss, the law on the books generates a significant gravitational force to achieve such acceptance. Yet, the current phase of energy transition highlights that these principles are far from firmly embedded. In fact, the chaotic forces of a Hobbesian state of nature are stronger and more influential today than they have been since the French revolutionary wars raged not just in Europe, but in the Americas, Africa, and Asia.1 This chapter will outline six key legal principles that provide the tools to embed energy security in an international rule of law-​based order for energy transition. It begins with extending the right to energy discussed in the last chapter to the energy security setting. It continues with the rules governing its implementation and the sovereign choice of means in realizing this portion of the right in question. Given the nature of global energy markets, there is an important limiting factor to energy sovereignty—​the sanctity of contracts. Contracts governing energy value chains condition global energy access. States must respect and protect the rights of all parties under such contract to allow the formation and functioning of global energy markets. This obligation to respect and protect extends further to an obligation of international cooperation beyond the privity of contract in energy value chains. As outlined next, the obligations of international cooperation secure rights to security of energy value chains on the supply and demand side. The chapter then briefly sketches that the monitoring and participation obligations applicable to energy equity apply with equal force to energy security given the significant impact of energy security decisions on the fulfilment of the right to energy. It concludes the chapter with a discussion of the adaptation imperative as seen through the lens of energy security (as opposed to only through the lens of energy equity).

II  Energy Security Principle 1: The Right to Energy Reliability and Resilience Energy Transition Principle 11



(1) Peoples, communities, and persons have a right to reliable and resilient energy access.

1

Alexander Mikaberidze, The Napoleonic Wars: A Global History (OUP 2020).

energy Security Principle 1  155



  

(2) States must take continuity of service into account in exercising their sovereign choice of means in choosing an appropriate energy mix for their respective contexts (Energy Transition Principles 2 & 7) (3) Stakeholders should ensure that they act consistent with international commercial best practice to limit reliability risks in global energy value chains. (4) Stakeholder should create a sufficient redundancy in the energy mix to increase resilience of local energy systems. (5) Modifications of energy systems or energy value chains for reasons beyond the implementation of energy transition is presumptively inconsistent with the obligation to respect the right to energy.

The right to energy discussed in the last chapter includes not just a right that energy be affordable when it is available but that it be accessible when it is needed. Energy security therefore is a co-​equal part of the right to energy alongside energy equity/​affordability.2 Energy security requires that energy systems are both reliable and resilient. Reliability looks to the business-​as-​usual scenario. In a business-​as-​usual scenario, is it possible to turn on a switch and expect the light to come on? Resilience looks at the ability of energy systems to withstand or spring back from less common events that put such energy systems under significant stress. Reliability and resilience of energy systems are under constant threat for many reasons ranging from the weather to war.3 Despite their different focus, each of these threats functionally presents a similar kind of risk for energy systems: they endanger access to energy supplies needed to cover social energy needs.

A  Energy Security as the Right to Energy Reliability (1) Intermittence Insecurity and the Right to Energy As discussed in Chapter 3, renewable energy sources (solar and wind) are susceptible to an intermittence risk.4 While renewable energy is typically cheaper to install, the intermittence of energy provides an important counterweight to an outright preference for renewable energy sources. The right to energy requires 2 General Comment No 24 (2017) on State Obligations under the International Covenant on Economic, Social and Cultural Rights in the Context of Business Activities, UN Doc E/​C.12/​GC/​24, 21; Daniel Yergin, ‘Ensuring Energy Security’ (2006) 85 Foreign Affairs 69, 78 (‘Today, the concept of energy security needs to be expanded to include the protection of the entire energy supply chain and infrastructure—​an awesome task’). 3 Yergin (n 2) 69–​74. 4 See ch 3.

156  The Energy Security Principles continuity of energy access. Disproportionate reliance on renewable energy sources can endanger this continuity of such access.5 Due to the intermittence problem, states must weigh different energy values against each other (security vs. affordability). In all but the fewest of cases, this means that governments must rely on a diversified energy mix in order to fulfil the right to energy, especially if renewable energies are to be a significant part of such mix. An energy mix that relies too heavily on renewables as part of the energy mix is progressively unlikely to fulfil the right to energy.6 As outlined in energy security principle 2, the precise balance of the energy mix is a sovereign prerogative.7 The climate and energy equity principles impose important limitations on this sovereign prerogative as discussed in previous chapters.8 The first energy security principle further imposes an additional energy security limitation: an energy mix that completely overrides continuity considerations does not fulfil the right to energy in the short to mid-​term because it cannot guarantee continuity of energy access.9 A state adopting such a policy must therefore justify how its decision-​making progressively realizes all rights even as it does not fulfil the right to energy. This will be complicated by the centrality of the right to energy discussed in the last chapter. Energy policy decisions can also be outright inconsistent with the obligation to respect the right to energy. An obligation to respect ‘means that individuals may not be impeded in their endeavors, that no bars may be erected hindering their access to activities protected by an economic or social right’.10 To the extent that a state draws down traditional energy sources and replaces them exclusively with renewable energy subject to intermittence risk, any resulting energy shortage that foreseeably results from such a policy is the result of a failure to respect the right to energy. Such a facial violation of the right could nevertheless be justified if it remains the best course of action to respect, protect and fulfil all rights in question. Yet, such a policy would itself appear questionable given that there are alternative energy mixes available to policymakers that can hedge against intermittence risks. In short, the intermittence risk itself suggests that the energy security component of the right to energy counsels against a renewable only solution to energy generation. Instead, it counsels for the adoption of broad energy mixes. Such an energy mix could be reliable and completely carbon free today to the extent it relied heavily on nuclear energy.11 Yet, the cost of construction of nuclear power plants means that such a policy is unlikely to satisfy energy equity. Consequently, a significant proportion of the energy is likely to remain fossil fuel-​based. This is one of the reasons that the current climate paradigm has not adopted a pure input



5 6 7 8 9

10 11

General Comment No 24 (n 2) 21. See ch 3. See below. See chs 7, 8. General Comment No 24 (n 2) 21. Christian Tomuschat, Human Rights: Between Idealism and Realism (3rd edn, OUP 2014) 142. See ch 3.

energy Security Principle 1  157 approach to energy transition at Glasgow but has opted instead for a hybrid input/​ output approach.12

(2) Commercial Stability and the Right to Energy As discussed in Chapter 3, energy value chains are global in nature. The length of energy value chains creates commercial risks and thus a need for increased commercial stability to shore up energy security.13 Decreasing commercial risks requires complex commercial instruments that permit the reliable trading in energy resources. Such instruments include the possibility of documentary transactions for energy raw materials, ready financing for documentary energy transactions, reliable global dispute resolution mechanisms, and global enforcement mechanisms.14 Transnational commercial legal instruments make such tools readily available. In order to access the benefit of these instruments, states frequently have to join international treaties like the New York Convention on the Recognition and Enforcement of Arbitral Awards and permit the structuring of transactions by means of documentary letters of credit consistent with international commercial best practices such as the UCP 500 principles.15 Most states in fact are members of the relevant key international conventions and they provide direct or indirect means to structure transactions critical to the energy value chain in a manner consistent with international commercial best practice.16 This significantly reduces the commercial risk posed by global energy value chains. It therefore increases the energy security by supporting commercial stability in everyday transactions. This is a simple and routine means for states progressive fulfilment of the right to energy.

B  Energy Security as the Right to Energy Resilience (1) Value Chain Resilience and the Right to Energy The length and global nature of energy value chains also creates significant resilience risks.17 Resilience requires both efficient, stable infrastructure to deliver

12 See ch 1. 13 See International Energy Security, Common Concept for Energy Producing, Consuming and Transit Countries (Energy Charter Secretariat 2015) 10 (Energy Charter Concept). 14 See Andrea Bjorklund, ‘Enforcement’ in Thomas Schultz and Federico Ortino (eds), The Oxford Handbook of International Arbitration (OUP 2020) 186; David Joseph Attard and others, The IMLI Manual on International Maritime Law: Volume II: Shipping Law (OUP 2016) 259. 15 These transactions are governed by a legal space between self-​regulation and national laws. See Ralf Michaels, ‘The True Lex Mercatoria: Law Beyond the State’ (2007) 14 Indiana J Global Legal Studies 447. Legal certainty frequently continues to rely nominally on national choice of law. Michael Joachim Bonell, ‘The Law Governing International Commercial Contracts and the Actual Role of the UNIDROIT Principles’ (2018) 23 ULR 15. 16 Bjorklund (n 14) 186. 17 The Covid-​19 pandemic has brought home this point. See eg Amish Thakker and Sri Rajan, ‘Covid-​19 Exposed the Fragility of Global Supply Chains’ Bain (14 October 2020) https://​www.bain. com/​insig​hts/​covid-​19-​expo​sed-​the-​fragil​ity-​of-​glo​bal-​sup​ply-​cha​ins-​snap-​chart/​.

158  The Energy Security Principles inputs even in times of stress and ready means to substitute inputs in case of a shortage.18 It is possible to improve resilience in two ways. First, it is possible to shorten energy value chains to limit the effect of unexpected shocks and increase control over measures to resolve shocks.19 This approach relies on a domestically or regionally available supply of energy inputs. The US has a ready supply of natural gas.20 US natural gas reliance increases US energy security.21 China has more ready access to coal, meaning that coal reliance will increase Chinese energy security by increasing value chain resilience.22 Secondly, it is possible to increase the resilience of energy systems through market liberalization.23 Such liberalization permits greater flexibility in global trading partners and allows the most efficient mobilization of energy value chain inputs to where they are most needed.24 Under this logic, local availability of particular goods and services becomes less important.25 Resilience is improved by making more markets available instead of exclusively by shortening supply chains. To gain the benefit of this second means of improving energy security requires participation in many of the core instruments of economic globalization such as the World Trade Organization, bilateral or regional trade treaties (including the ECT), and bilateral investment treaties. Decision-​making to fulfil the right to energy will be likely to combine both of these strategies to create sufficient redundancy in the energy mix to increase

18 See Charles Fallon, ‘Infrastructure: Supply Chain’s Missing Link’ Supply Chain Quarterly (6 March 2015). 19 See Jason Bordoff and Meghan O’Sullivan, ‘The New Energy Order: How Governments Will Transform Energy Markets’ Foreign Affairs (July/​August 2022). 20 Jude Clemente, ‘U.S. Natural Gas Reserves Continue to Soar’ Forbes (6 October 2019) https://​www. for​bes.com/​sites/​judec​leme​nte/​2019/​10/​06/​u-​s-​natu​ral-​gas-​reser​ves-​conti​nue-​to-​soar/​?sh=​5c56f​ 3991​b13. 21 ‘U.S. Oil and Natural Gas: Providing Energy Security and Supporting Our Quality of Life’ USDE (5 October 2020) 4, https://​www.ene​rgy.gov/​sites/​prod/​files/​2020/​10/​f79/​Natu​ral%20Gas%20B​enef​ its%20Rep​ort.pdf. 22 See Vanand Meliksetian, ‘China Believes Natural Gas Demand Will Soar’ OilPrice.com (29 October 2020) https://​oilpr​ice.com/​Ene​rgy/​Ene​rgy-​Gene​ral/​China-​Belie​ves-​Natu​ral-​Gas-​Dem​and-​ Will-​Soar.html; How Is China’s Energy Footprint Changing? (Center for Strategic and International Studies 2020) (CSIS Study) (discussing China’s ability to cover coal demand from domestic production and neighbouring states). For China’s position on coal in its energy mix at COP26 see ‘China Resists COP26 Push to End Coal as Energy Security Prevails’ Bloomberg (12 November 2021) https://​www. bloomb​erg.com/​news/​artic​les/​2021-​11-​11/​china-​won-​t-​supp​ort-​cop26-​push-​to-​end-​coal-​upgr​ade-​ goals-​early. The reliance on coal is energy security driven. See eg Keith Bradsher, ‘China Hurries to Burn More Coal, Putting Climate Goals at Risk’ New York Times (28 October 2021) https://​www.nyti​mes. com/​2021/​10/​28/​busin​ess/​ene​rgy-​envi​ronm​ent/​china-​coal-​clim​ate.html. 23 See Kenneth J Vandevelde, ‘Investment Liberalization and Economic Development: The Role of Bilateral Investment Treaties’ (1998) 36 CJTL 501, 504–​505. 24 See Energy Charter Concept (n 13) 11–​12; Anatole Boute, Energy Security Along the New Silk Road: Energy Law and Geopolitics in Central Asia (CUP 2019) 8. 25 Energy Charter Concept (n 13); see also Ole Gunnar Austvik, ‘EU Natural Gas Market Liberalization and Long-​term Security-​of-​supply and -​Demand’ in Gunnar Ferman (ed), The Political Economy of Energy in Europe: Forces of Integration and Fragmentation (Berliner Wissenschafts Verlag 2009) 85–​118.

energy Security Principle 1  159 resilience as much as possible.26 As discussed further below, the manner in which decision-​making combines these approaches is a matter of energy sovereignty. That being said, a retrenchment on either (abandonment of local fuel stocks and/​or a de-​liberalization of and withdrawal from global energy markets) runs the risk of violating the obligation to respect (and potential the obligation to protect) the enjoyment of the right to energy given that such action has foreseeable negative consequences for domestic and global energy systems. Such negative consequences therefore would have to be justified by a realization of other rights and the potential for later full realization by other means.

(2) Geo-​Political Conflict and the Right to Energy Geo-​political factors frequently affect the resilience of energy value chains, threatening energy security. This problem is particularly acute in the context of long energy value chains. Lengthy value chains are subject to disruption by geo-​political factors (affecting producer states, consumer states, or third states).27 This potential for disruption creates incentives to secure control over key nodes in core energy value chains to be free from potential interference by potential hostile powers and to be able to exploit these nodes for geo-​political leverage.28 The more states act on such incentives, the more they amplify the same incentives for third states, creating an escalatory spiral that threatens to upend global energy value chains, or at the very least seriously to impair them. This spiral ominously repeats the rhetoric of colonial scrambles for resources in the name of national security.29 Such conduct is inconsistent with the protection, and fulfilment of the right to the energy. It deteriorates energy systems that support the entire world community. This deterioration can ultimately lead to a collapse or at least to serious delay on climate results, energy equity efforts, and energy security for all states concerned, as energy systems are intertwined, balanced, and interdependent on that balance.

26 See Energy Charter Concept (n 13) 21. 27 Yergin (n 2). 28 June Teufel Dreyer, ‘China’s Monopoly on Rare Earth Elements: and Why We Should Care’ Foreign Policy Research Institute (7 October 2020) https://​www.fpri.org/​arti​cle/​2020/​10/​chi​nas-​monop​oly-​on-​ rare-​earth-​eleme​nts-​and-​why-​we-​sho​uld-​care/​; Diane A Desierto, ‘China’s Maritime Law Enforcement Activities in the South China Sea’ (2020) 96 Intl L Stud 257 (2020); ‘Russian oil: EU Agrees on Level of Price Cap’ Council of Europe (3 December 2022) https://​www.consil​ium.eur​opa.eu/​en/​press/​press-​ relea​ses/​2022/​12/​03/​russ​ian-​oil-​eu-​agr​ees-​on-​level-​of-​price-​cap/​; W Michael Reisman, The Quest for World Order and Human Dignity in the Twenty-​first Century Constitutive Process and Individual Commitment (Brill 2012) 66–​67. 29 ‘The Electric Car-​Boom Sets off a Scramble for Cobalt in Congo’ The Economist (31 March 2021) https://​www.econom​ist.com/​fina​nce-​and-​econom​ics/​2021/​03/​31/​the-​elect​ric-​car-​boom-​sets-​off-​a-​ scram​ble-​for-​cob​alt-​in-​congo; Cobus van Staden, ‘Green Energy’s Dirty Secret: It’s Hunger for African Resources’ Foreign Policy (30 June 2022) https://​foreig​npol​icy.com/​2022/​06/​30/​afr​ica-​congo-​drc-​ev-​ elect​ric-​vehic​les-​batter​ies-​green-​ene​rgy-​miner​als-​met​als-​min​ing-​resour​ces-​colo​nial​ism-​human-​ rig​hts-​deve​lopm​ent-​china/​; Timothy Mitchell, Carbon Democracy: Political Power in the Age of Oil (Verso 2011).

160  The Energy Security Principles As a logical matter, the right to energy requires for its fulfilment that all stakeholders de-​escalate such competitive pressures. Each escalation decreases energy security because it undermines the resilience of energy systems. It thus undermines the right to energy by making energy more expensive and less available. De-​ escalation, conversely, increases the energy security for all stakeholders. It thereby lowers price. By lowering prices and safeguarding supply, it allows for a choice of the most climate friendly energy mix. A failure to de-​escalate geo-​political tension creates a waste of energy and climate resources. Such a waste is what energy transition principles throughout enjoin.

III  Energy Security Principle 2: Energy Sovereignty and Sovereignty over Natural Resources Energy Transition Principle 12

  

Any international intervention to alter a state’s energy policy is presumptively an impermissible impairment of the principles of sovereign equality and the sovereignty over natural resources.

Chapter 4 already set out the principle of sovereign energy equality.30 Sovereign energy equality means that states are free to set their own energy policy without external interference (whether armed intervention or by other means).31 This understanding of sovereign energy equality is closely related to the customary international law recognition of each state’s permanent sovereignty over its own natural resources.32 The principles of sovereignty energy equality and permanent sovereignty over natural resources are core principles of energy security. They alone safeguard that states have sufficient independence to make determinations about how to fulfil the right to energy in as reliable and resilient a manner as is possible local condition.33 They further safeguard an important process of participation in energy decision-​making for the local population by placing the main responsibility for energy policy in the state. In principle, this means that no level of international need can justify intervention in any state under the justification of securing needed resources for energy

30 See ch 4. 31 See ibid. 32 See ch 5. 33 On the fraught relationship between sovereignty, autonomy, and the obligations to fulfil international legal obligations see James Crawford, The Creation of States in International Law (2nd edn, OUP 2007) 32.

Energy Security Principle 3  161 transition of any sort.34 In consequence, this means that no level of international need can justify intervention to alter a state’s energy policies. Such interventions are inconsistent with the fundamental premise of national sovereignty. They are as such illegal.35

IV  Energy Security Principle 3: Good Faith Performance of Contracts Energy Transition Principle 13   

States and stakeholders must perform in good faith their agreements and contracts constitutive of energy value chains and energy systems.

Energy sovereignty does not give states the ability to undo or ignore the obligations which they have freely entered into. Global energy value chains are constituted by a large number of contracts from first input to final consumer.36 These contracts themselves go back to multiple contracts with state entities (or regulated by state entities) that provide the right to extract natural resources needed for the generation of energy or to generate, transmit, and market energy itself.37 Global energy value chains can only function because such contracts are honoured. Particularly, this is true with state contracts that are at the heart of the current energy paradigm.38 If a state fails to perform a contract in good faith, it upsets one of the weight-​bearing pieces of the global energy system. While energy systems typically have sufficient resilience to compensate for such violations, each violation imposes unnecessary strain. The principle of good faith performance of contracts therefore is a necessary precondition for energy security.39 Without it, global energy systems are subject to an unacceptable level of political risk.40 This level of political risk brings to the scene the competitive pressures to secure needed energy system nodes by

34 On the relationship between human rights and non-​intervention see Reisman (n 28) 267. 35 UN Charter, art 2(4); Friendly Relations Declaration, GA Res 2625, UN GAOR, 25th Session, UN Doc A/​RES/​2625 (1970); Military and Paramilitary Activities in and against Nicaragua (Nicaragua v USA) [1986] ICJ Rep 14, 133 (27 June). 36 See ch 2. 37 On the many layers of such contracts see eg Owen Anderson and others, International Petroleum Law and Transactions (Rocky Mountain Mineral Law Foundation 2020). 38 ibid. 39 See Yergin (n 2) 79 (‘Markets need to be recognized as a source of security themselves’). 40 Peter D Cameron, International Energy Investment Law; The Pursuit of Stability (2nd edn, OUP 2021) 18.

162  The Energy Security Principles extra-​contractual means. This in turn strains energy systems—​potentially to the breaking point.41 The principle of good faith performance of state contracts is a general principle of international law.42 While the principle is not a suicide pact and allows for modification in certain circumstances (that in any event typically are included in modern energy contracts themselves), the default rule is that a contract once agreed to has to be performed.43 Third states importing energy have placed significant reliance interests in the good faith performance of these contracts as part of domestic fulfilment efforts of the right to energy.44 A state therefore cannot rely on its energy sovereignty as a reason to abrogate such a contract without violating the sovereign energy equality of a third state. The duty to perform is thus the counter-​ weight to sovereign energy equality. No one can force a state to treat with regard to its natural or energy resources. Once the state has made the choice to treat, it must then live by the promises it has made.45

41 See Bordoff and O’Sullivan (n 19) (‘Without government intervention, the world will suffer a breakdown in energy security or the worst effects of climate change—​or both’). 42 Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals (CUP 2006) 121–​36. 43 Klaus Peter Berger, The Creeping Codification of the New Lex Mercatoria (2nd edn, Kluwer 2010) 211 (‘In other words, in case of doubt, the principle of pacta sunt servanda prevails and performance must be rendered so long as it is possible regardless of the economic it may pose on the performing party’). 44 See Bordoff and O’Sullivan (n 19). 45 Kaj Hobér, The Energy Charter Treaty (OUP 2020) 348. There are some who argue that an insistence on the good faith performance of state contracts constitutes neo-​colonial subjugation of energy producing states by multinationals. In the energy context at least, this suggestion is anachronistic. In the first place, the charge that the sanctity of contracts constitutes a vestige of colonialism must be understood in the context of the fierce debate over whether the doctrine of pacta sunt servanda must make room for changed circumstances (rebus sic stantibus). This debate was at the heart of the original confrontation between OPEC and the ‘seven sisters’ or supermajors. See Giuliano Garavini, The Rise and Fall of OPEC in the Twentieth Century (OUP 2019) 176. This battle pitched the supermajor’s insistence that contracts had to be performed as written (without regard to good faith) against the attempts by oil producing states to reform the underlying contracts, but most importantly, to shift the balance of power to the rightful owners of the resource. ibid. The supermajor’s perceived instance that contracts had to be performed without regard to good faith was a particularly Anglo-​Saxon legal predilection. Further, it was one that was anachronistic at the time advanced in the mid-​twentieth century, given the significant changes within US contract law in particular that embraced a more pragmatic approach to law to previously formalistic understandings of contract. See Robert Summers, ‘Good Faith’ in General Contract Law and the Sales Provisions of the Uniform Commercial Code’ (1968) 54 VLR 195; Robert Summers, ‘Pragmatic Instrumentalism in Twentieth Century American Legal Thought: a Synthesis and Critique of our General Theory About Law and its Use’ (1981) 66 Cornell LR 861. At present, the insistence on good faith performance incorporates a moderate middle between the original positions—​that is, contracts are subjected to good faith but even in that context, changed economic circumstances are insufficient to upset an agreed upon assignment of risk. See Trans-​Lex Principles No IV.6.7 and VIII.1. As such, the anti-​contract perspective continues to advance a line of argument that has since been resolved within the broader international contract law paradigm. It is also important to note that resource producing states today find themselves in a radically different position than they did when the charge was first levelled. States are highly sophisticated and are well aware of their structuring options to utilize their resources.

Energy Security Principle 4  163

V  Energy Security Principle 4: Global Cooperation as Safeguarding Security of Supply and Security of Demand Energy Transition Principle 14



  

(1) States must cooperate to ensure the stable long-​term supply of energy value chain inputs sufficient to meet global energy demands. (a) States should endeavour to conclude agreements promoting access of energy value chain inputs to international markets on commercial terms and on a competitive market basis (b) States must protect investments in energy value chain components and energy systems in keeping with the international legal principles applicable to such investments. (2) States must cooperate to ensure the stable long-​term demand for energy value chain inputs on a global competitive market basis. (a) States must refrain from imposing primary or secondary sanctions targeting energy value chain inputs or energy systems in violation of international law. (b) In deciding whether or how to alter market access for energy value chain inputs, components, or energy systems, including by of primary or secondary sanctions, states must take into account the human rights impacts of any such policies on stakeholders in third states relying on the respective energy value chains so as not to impair the global fulfilment of the right to energy.

States have an obligation to cooperate in order to secure global energy security. This obligation flows from the right to energy discussed in Chapter 8: the right to energy includes an obligation to cooperate towards its global fulfilment. Such global fulfilment is impossible without energy security.46 This obligation similarly flows from the climate principles discussed in Chapter 7: the obligations of cooperation and solidarity to reduce global emissions to net zero by or around mid-​century are impossible to achieve without energy security due to the emissions waste that inefficient energy systems do and will continue to cause.47 This obligation to cooperate extends significantly beyond the obligation simply to perform one’s contracts. It requires states to create a global regulatory environment, as well as the markets, in which the energy security needed to see through energy transition can be established and maintained.48

46 See ch 8. 47 See ch 7. 48 Philippe Aghion and others, The Power of Creative Destruction, Economic Upheaval and the Wealth of Nations (HUP 2020) 184–​86.

164  The Energy Security Principles States have begun the process of fulfilling the right to energy (and other economic rights) through the liberalization of the global energy trade, thus creating a global legal infrastructure supporting improved energy security.49 The key instruments supporting this broader liberalization of global markets (and energy value chains) expressly state the goal and purpose of this liberalization: development.50 The legal infrastructure of energy trade liberalization therefore does not incidentally support the right to energy by way of global cooperation and solidarity. It was put in place with the express purpose of doing so (given the central place of the right to energy as part of the fulfilment of the human right to development). This section sketches the two sides of the legal principle of international cooperation to support energy security the principle of security of energy supply and of energy demand.

A  The Duty to Cooperate on Security of Supply The principal avenues to protect security of supply in international energy law are specific energy law-​related instruments like the ECT, as well as international investment law in general. These instruments provide strong protections against shocks to the security of supply when energy value chains are structured to maximize the protections offered by these instruments in mind. These instruments provide less protection when energy value chains are not so structured. Importantly, both international trade law and general international law provide comparatively little means to support cooperation for the fulfilment of the right to energy. In the first instance, general international trade rules are relatively inefficacious to backstop global energy supply security. Rather, ‘WTO law is biased towards imports’ with a ‘focus . . . on access to markets and the elimination of import barriers’.51 In fact, ‘GATT does almost nothing to constrain export-​related measures’.52

49 Tibisay Morgandi and Jorge Viñuales, ‘Energy Security in International Economic Law’ in Robin Geiß and Nils Melzer (eds), The Oxford Handbook of the International Law of Global Security (OUP 2021) 450, 461. 50 See eg Marrakesh Agreement Establishing the World Trade Organization, preamble (‘Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development’); ECT, preamble (‘Certain that taking advantage of the complementary features of energy sectors within Europe will benefit the world economy; persuaded that broader energy cooperation among signatories is essential for economic progress and more generally for social development and a better quality of life’); 2012 Model US Bilateral Investment Treaty, preamble (‘Recognizing that agreement on the treatment to be accorded such investment will stimulate the flow of private capital and the economic development of the Parties’). 51 Anna-​Alexandra Marhold, Energy in International Trade: Concepts, Regulation and Changing Markets (CUP 2021) 160. 52 ibid 162.

Energy Security Principle 4  165 Further complicating matters, ‘WTO rules are widely considered to kick in after the natural resources in question [contributing to an energy value chain] have been extracted and are tradeable for economic gain’.53 This makes it particularly challenging to use general international trade law rules to support energy supply security to the extent that exporters of natural resource inputs to energy value chains have, rightfully so, at least in principle, the ability to constrain the production of raw materials. On the one hand, these limitations naturally follow from sovereign energy equality and the permanent sovereignty of natural resources. No importer of energy value chain inputs can force another state to produce the inputs in question against its will, or modify the amount of production at the will of the demand side. Consequently, trade rules do not work such an effect because doing so would undermine a core tenet of international energy law developed above. On the other hand, these limitations create significant risk of energy supply instability. Such instability creates significant waste. This waste is inconsistent with the exercise of correlative rights in energy systems during the energy transition. Yet, the principle of the good faith performance of contract alone is likely insufficient to prevent this waste: states may be contractually permitted to control levels of production even with regard to energy projects that are already online.54 This can have the effect of unbalancing energy systems by starving them for inputs. Yet, in such a scenario, it would not be economical to develop new replacement sources for the missing inputs as production could come back online at any point, thus depressing the price for new development, thus potentially making alternative developments uneconomical to exploit. Here the human rights articulation of the right to energy crystallizes a problem that general trade law cannot resolve: states can act to deprive the global market (or specific states relying on the global market) of energy supplies for geo-​political reasons. Such conduct would fail to respect and protect the right to energy of persons in the receiving states. It places strain, at least temporarily, on the obligation to cooperate towards the global progressive realization of the right to energy. Despite this strain, general international trade law provides only limited guidance on when conduct stops being permissible and starts to be impermissible. It therefore provides only limited support for supply side energy security. General international law similarly does not resolve the underlying problem. The most cogent argument is that when states engage in such conduct for geo-​ political reasons, the conduct constitutes coercion and violates the principles

53 ibid 174. 54 Contracts may permit governments ‘participation in decisions regarding production level and accounting practices’ as well as give them an ability to refuse to approve work plans that do not meet desired production targets. See Kristen Bindemann, ‘Production-​Sharing Agreements: An Economic Analysis’ Oxford Institute for Energy Studies WPM 25 (October 1999) 6.

166  The Energy Security Principles of sovereign equality.55 Such conduct is coercive because it uses energy market power to bend the will of third parties. Such use of market power would be inconsistent with the respect of sovereign equality for example because it could interfere in the internal affairs and/​or the foreign affairs prerogatives of a third state.56 Problematically for this argument, obligations of cooperation are not obligations of result but of conduct; cooperation leaves states with significant latitude to withdraw from the global energy market place. This form of economic persuasion takes place in a grey area—​it is not unlawful under general international law even as it is in tension with the maintenance of friendly relations between states. The ECT addresses this gap. Its fundamental purpose is to protect supply security by requiring that States ‘promote access to international markets on commercial terms, and generally to develop and open’ a competitive market.57 This provision was included in particular to ‘tak[e]‌account of concerns of States relating to regulations, exclusive rights, and security of supply’.58 This goal is implemented in part by imposing an obligation to maintain competitive energy markets.59 Further, the Charter imposes an obligation to facilitate ‘freedom of transit . . . without distinction as to the origin, destination or ownership’ of energy materials.60 The ECT seeks to impose restrictions on the interference with supply security on a number of levels. This approach provides a means to establish whether conduct impairing the security of supply is permissible—​and prohibits both anti-​competitive and discriminatory behaviour. Given this structural function in defence of supply security, current EU member state efforts to withdraw from the treaty are noteworthy.61 The treaty would protect energy supply to the EU from ECT member states. The reason for this pull-​ out is arguably that the main intended producers of energy resource—​the Russian Federation—​withdrew from the ECT, thus significantly reducing the value of the treaty to securing de facto energy security in Europe.62 The ECT thus is a blueprint that lost the key partner needed to put it into action.

55 This argument was raised by lawyers in the US in response to the Arab oil embargo. See Richard B Lillich, ‘Economic Coercion and the International Legal Order’ (1975) 51 International Affairs 358. In hindsight, this argument is somewhat ironic given the proclivity of the US to use sanctions as a tool of economic coercion to achieve foreign policy goals on a somewhat regular basis. This issue will be discussed in the next section. 56 See Friendly Relations Declaration (n 35) (‘states shall conduct their international relations in the economic, social, cultural, technical and trade fields in accordance with the principles of sovereign equality and non-​intervention’). 57 ECT, art 3. 58 Hobér (n 45) 145. 59 ECT, art 6; see also Hobér (n 45) 152 (‘The intention is not to create a comprehensive competition regime, but rather to remove anti-​competition practices which prevent the free play of market forces’). 60 ECT, art 7. 61 See ‘Energy Charter Treaty: Recent Developments’ Gibson Dunn (5 December 2022) https://​www. gib​sond​unn.com/​ene​rgy-​char​ter-​tre​aty-​rec​ent-​devel​opme​nts/​ (listing withdrawing states). 62 Tania Voon and Andrew D Mitchell, ‘Ending International Investment Agreements: Russia’s Withdrawal from Participation in the Energy Charter Treaty’ (2017) 111 AJIL Unbound 461.

Energy Security Principle 4  167 Even in the absence of a multilateral energy treaty like the ECT, international economic law provides means to protect supply security. International investment law is the principal source of such protection. To apply, projects must be structured so as to benefit from investment treaty protection.63 International investment treaties protect investments by investors from qualifying states against unfair and inequitable treatment and against expropriation (among other things).64 The treaties do permit structuring through treaty jurisdictions by means of specific corporate vehicles. Once applicable, such treaties protect the reasonable investment-​backed expectations of qualifying investments.65 Governmental regulation that intentionally limits the supply of materials to end markets for foreign policy reasons has run afoul of such protections in the past.66 To benefit from this jurisprudence, participants in energy value chains would have to have a qualifying investment in the state restricting supply as well as a reasonably disclosed corporate or contractual relationship with the jurisdiction into which supply had been restricted.67 International investment law provides a means to instrumentalize the protections found in the international human rights understanding of the right to energy. It does so imperfectly. It only applies to qualifying investors and qualifying investments. It recompenses investors rather than the ultimate targets of state conduct (residents in the target state). Yet, this instrumentalization does provide a case for generalizing the understanding included in the ECT to protect the energy supply security on the international plane. It further provides international legal incentives that could deter use of such a policy tool in international governmental deliberations. Energy market participants can also protect energy supply security through international economic law. It provides some tools to support the fulfilment of the right to energy. Progress towards improving supply-​side energy security nevertheless remains mixed. This under-​achievement by international economic law partially explains the structures in place for increased energy-​based competition during the current phase of the energy transition. At the same time, this under-​ achievement also provides a toolkit for policymakers to improve supply side energy security by using concepts from the ECT to create a more stable and expanded playing field. To succeed, such efforts must provide incentives for energy producers to remain engaged in energy security mechanisms. The logical means to do so

63 On the contours of such permissible structuring to benefit from international investment treaty protection see Zachary Douglas, The International Law of Investment Claims (CUP 2009). 64 For a primer on substantive protections included in investment treaties, see Campbell McLachlan and others, International Investment Arbitration: Substantive Principles (2nd edn, OUP 2017). 65 Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd edn, OUP 2012) 130–​60. 66 For a discussion see Preeti Bhagnani, ‘Revisiting the Countermeasures Defense in Investor-​State Disputes: Approach and Analogies’ (2015) Yearbook on Intl Investment L & Policy 2013–​2014 437. 67 See ibid.

168  The Energy Security Principles is to offer producers greater security of demand. The next section will address this flipside of demand security.

B  The Duty to Cooperate on Security of Demand Economic sanctions against a producer state are the main non-​market threat to demand security. Such sanctions are frequently categorized into two sub-​types of sanctions, primary sanctions and secondary sanctions. Primary sanctions include measures ‘like trade embargoes and asset freezes’ which prohibit persons from the sanctioning state to enter transactions ‘with sanctioned countries or persons’.68 Secondary sanctions in turn ‘may be imposed on [third party nationals] with respect to certain actions that take place outside of the jurisdiction of [the state imposing the sanctions], notably when they conduct business with individuals, groups, regimes or countries that are the target of the “primary” sanctions regime’.69 Economic sanctions can target energy revenue of a target state.70 Such a regime can take the form of a primary sanctions import ban or embargo of energy value chain inputs.71 It can also take the form of secondary sanctions targeting global energy markets and energy market participants doing business in both the state imposing the sanctions and the target state.72 Both types of sanctions undermine the ability of a particular energy value chain producer to sell into the global marketplace. While both types of sanctions disrupt global energy markets, secondary sanctions reach further into global energy markets and therefore are more disruptive. Both types of sanctions take potentially available energy inputs temporarily out of energy value chains for non-​commercial reasons. Disruptively, these inputs could return at any point in time, thus diminishing the incentive to definitely replace the lost inputs in the global value

68 Emmanuel Breen, ‘Corporations and US Economic Sanctions: the Dangers of Overcompliance’ in Charlotte Beaucillon (ed), Research Handbook on Extraterritorial Sanctions (Edward Elgar Publishing 2021) 256, 258. 69 ibid. 70 US sanctions targeting Iran are one example of both primary and secondary sanctions aimed at the energy sector of a particular state. For the specific reach of sanctions and their effect on energy systems during the Trump administration see ‘Iran Sanctions: Global Energy Implications’ SP Global (9 May 2018) https://​www.spglo​bal.com/​en/​resea​rch-​insig​hts/​artic​les/​iran-​sancti​ons-​glo​bal-​ene​rgy-​ impli​cati​ons. On the context for the actions by the Trump administration see Harold Koh, ‘The Trump Administration and International Law’ (2017) 56 Washburn LJ 413. For an appraisal of the global reaction to such sanctions see Pouria Askary, ‘The Future of the Iran Deal from the International Law Perspective’ (2021) 115 American Society of Intl Law Proceedings 320. 71 ‘EU’s Sixth Package of Russia Sanctions Targets Oil Imports’ White & Case (6 July 2022) https://​ www.whitec​ase.com/​insi​ght-​alert/​eus-​sixth-​pack​age-​rus​sia-​sancti​ons-​targ​ets-​oil-​impo​rts-​profe​ssio​ nal-​servi​ces-​expa​nds. 72 ‘Iran Sanctions: Global Energy Implications’ SP Global (9 May 2018) https://​www.spglo​bal.com/​ en/​resea​rch-​insig​hts/​artic​les/​iran-​sancti​ons-​glo​bal-​ene​rgy-​impli​cati​ons.

Energy Security Principle 4  169 chain. This affects the target state as well as third states by distorting the market for energy inputs. The same functional concerns applying to disruptions of supply security also apply to demand security. General international law places both primary and secondary sanctions in a grey zone for much the same reason that measures threatening supply security were in a grey zone.73 Such sanctions interfere in internal affairs of third states. This interference has been labelled as coercive (even if that label remains contested).74 Sanctions can have significant negative impacts on the general population of the sanctioned state. However, some argue that this impact has been reduced with greater sophistication in the pinpointing of sanctions of particular individuals.75 This argument does not and cannot address sanctions that target energy inputs given that energy inputs are needed globally to secure the right to energy. Such sanctions therefore have a significant negative impact not just in the target country but worldwide. These concerns are particularly acute in the context of secondary sanctions because such sanctions have an immediate impact on the global energy trading system as a whole. Such secondary sanctions in particular have been cast as an impermissible intervention in the affairs of a third state.76 There is significant state practice to counter secondary sanctions as far as possible.77 This development would suggest a development of an international legal principle against the use of 73 Iran commenced international legal proceedings against the US with regard to its unilateral re-​imposition of sanctions following its pull out from the Iran nuclear deal. See Jean Galbraith, ‘Iran Initiates Suit against the United States in the International Court of Justice, While Sanctions Take Effect’ (2019) 113 AJIL 173. The arguments raised by Iran in these proceedings are premised in a Treaty of Amity. Much of the substance of the claims advanced borrow from investment law jurisprudence discussed further below. See Case Concerning Certain Iranian Assets (Islamic Republic of Iran v United States of America) Memorial of the Islamic Republic of Iran (1 February 2017) 5.22–​5.36, 5.71. The International Court of Justice in its judgment provided a split ruling. Most relevantly, it concluded with regard to Executive Order No 13599 that ‘Executive Order 13599 comprehensively blocked the property and interests in property of Iran and Iranian financial institutions (see paragraph 114 above). By its own terms, this Executive Order constitutes an actual impediment to any financial transaction or operation to be conducted by Iran or Iranian financial institutions in the territory of the United States.’ Case Concerning Certain Iranian Assets (Islamic Republic of Iran v United States of America) judgment (30 March 2023), para 220, available at https://​www.icj-​cij.org/​sites/​defa​ult/​files/​case-​rela​ted/​164/​164-​ 20230​330-​JUD-​01-​00-​EN.pdf (accessed 14 June 2023). On the split nature of the decision, see Keian Razipour, ‘After ICJ’s “Certain Iranian Assets” Judgment, Iran and United States Both Claim Victory’ Just Security (17 April 2023) https://​www.justs​ecur​ity.org/​85982/​after-​icjs-​cert​ain-​iran​ian-​ass​ets-​ judgm​ent-​iran-​and-​uni​ted-​sta​tes-​both-​claim-​vict​ory/​ (accessed 14 June 2023). 74 Historical research uses the moniker ‘coercive’ freely. See Nicholas Mulder, The Economic Weapon, the Rise of Sanctions as a Tool of Modern War (YUP 2022). For an excellent primer on the debate in general international law see Craig Martin, ‘Economic Sanctions Under International Law: A Guide for Canadian Policy’ Rideau Institute on International Affairs and the Human Rights (November 2021). 75 For a discussion of why the increased sophistication of sanctions lessens their supposed human rights impacts see Oona Hathaway and Scott Shapiro, The Internationalists: How a Radical Plan to Outlaw War Remade the World (Simon & Schuster 2017) 389. 76 See Julia Schmidt, ‘The Legality of Unilateral Extra-​Territorial Sanctions under International Law’ (2022) J Conflict and Security L 53. 77 Nico Krisch, ‘Jurisdiction Unbound: (Extra)Territorial Regulation as Global Governance’ (2022) 33 EJIL 481, 500–​501.

170  The Energy Security Principles such sanctions. Nevertheless, this development does not include core states in the international system that rely on sanctions as a primary tool of foreign policy like the US.78 It therefore goes so far but no further in supporting energy demand security outcomes that in turn safeguard global energy security. International economic law provides a stronger backbone for the protection of energy demand security. In fact, the structure of international economic law provides stronger support for the protection of demand security compared to supply security.79 Destroying demand security for political reasons through sanctions closes off markets to a particular producer on the basis of their nationality. Countries subject to sanctions are currently in the process of challenging such measures as inconsistent with most-​favoured nations protections included in the WTO instruments.80 Without more, a withdrawal of such MFN protections would amount to a potential violation of international trade law.81 The main defence expected in current proceedings challenging such sanctions is that the state imposing sanctions acted to protect its own security interests.82 Such a defence is not automatically successful. Rather, a state must prove a good faith basis to impose the measure.83 Further, the predicate for the measure must be present or reasonably appear to be present (for example the existence of war or other emergency in international relations).84 The imposition of sanctions outside of such a context would, at least in principle, be inconsistent with the international economic law principles. Investment law similarly remains available to investors who structured their investments to fall within their ambit. In this case, it would be the governmental measure destroying a market for the product in question that would be the subject of a challenge. Such challenges can in fact be successful.85 Investment law is notably better able to protect demand security than supply security. The investors most likely to bring claims invoking investment law are affiliates of national energy companies deprived of market access. These investors come closer to representing affected individuals given their state-​ownership. However, this protection is far from

78 For a full-​throated support of sanctions as a US foreign policy tool see Hathaway and Shapiro (n 75). 79 See Marhold (n 51) 160. 80 Julia Beqiraj and Munhee Jung, ‘Economic Sanctions Against Russia and their Compatibility with WTO Law: Questions and Answers’ British Institute for International and Comparative Law (6 April 2022) https://​www.biicl.org/​blog/​39/​econo​mic-​sancti​ons-​agai​nst-​rus​sia-​and-​their-​compat​ibil​ity-​ with-​wto-​law-​questi​ons-​and-​answ​ers. 81 See ibid. 82 See ibid. 83 See Michael D Nolan and Frédéric G Sourgens, ‘The Limits of Discretion? Self-​Judging Emergency Clauses in International Investment Agreements’ (2012) Yearbook on Intl Investment L & Policy 2010–​ 2011 362. 84 See GATT 1994, art XXI. 85 Cargill v Mexico ICSID Case No ARB(AF)/​05/​2, Award (13 August 2009).

Energy Security Principle 5  171 perfect as it requires specific structuring and provides a limited damages remedy only. It thus does not protect global energy directly. Energy market participants can protect energy demand security through international economic law. International economic law therefore provides some tools to support the fulfilment of the right to energy on both the demand and the supply side. However, in both contexts there remain significant issues—​the right to energy is protected only indirectly. This increases the kind of regulatory leakages that increase energy insecurity and escalate competitive pressures in international energy systems. The best way to fulfil the right to energy cooperatively therefore is to conclude a treaty such as the ECT. Such a treaty would have to provide reasonably strong guarantees of supply and demand. It thus would have to be direct about the illegality of the use of energy value chain inputs as an economic weapon by producer, consumers or finance intermediary jurisdictions.

VI  Energy Security Principle 5: Right to Energy-​specific Monitoring and Participation Energy Transition Principle 15



  

(1) Stakeholders must monitor and transparently communicate regarding their fulfilment of the right to energy as their actions have an impact on the reliability and resilience of energy value chains and energy systems. (2) Affected persons have a right to free, active, and meaningful participation in decision-​making altering the reliability or resilience of energy value chains and energy systems, particularly in the context of energy transition.

Chapters 7 and 8 discussed the importance of monitoring the assessment of outcome trajectories in climate law and to support the right to energy. The right to energy therefore already makes available monitoring capabilities.86 This monitoring is crucial for the protection of energy security.87 Agencies like the IEA and OPEC actively monitor global energy markets and publish their findings. The right to energy-​specific monitoring further supports an active engagement process with affected parties.88 This participation is similarly critical in the context of energy security. Energy reliability and resilience measures are likely to increase short term energy costs, but they do protect affected persons against catastrophic

86

ICESCR, art 16(1). Yergin (n 2). 88 Convention on the Right to Development (Draft 2), art 3(a). 87

172  The Energy Security Principles downside risks. Participation is crucial to structure energy markets in a manner to protect all participants against catastrophic loss while also taking into account community interests. The right to energy-​specific engagement process therefore must also include energy security as a critical component.

VII  Energy Security Principle 6: The Adaptation Imperative Energy Transition Principle 16



  

(1) Stakeholders must take account of the reliability and resilience of energy systems and energy value chains when making policy decisions about the adaptation of energy systems and energy value chains to meet the demands of adapting to the effects of climate change in a manner that fairly distributes access to energy and access to energy-​intensive adaptation methods. (2) Stakeholders must cooperate globally to ensure that states, peoples, and communities vulnerable to the effects of climate change have all necessary resources to safeguard the reliability and resilience of energy value chains and energy systems including but not limited to by providing finance, financial support, and investments.

The energy security currently takes on additional urgency. Climate change stresses the resilience and the reliability of global energy systems. For example, droughts create significant issues for states relying on hydropower for a significant portion of their energy mix.89 Droughts also negatively affect the ability of nuclear power plants to draw on ready water supplies for cooling purposes.90 Climate change directly impacts energy security.91 Furthermore, it impacts the energy security of non-​fossil fuel-​based energy inputs as much as it impacts the energy security of fossil fuel-​based energy generation.92 89 For a discussion of such scenarios see Tewodros Walle Mekonnen and others, ‘Assessment of Impacts of Climate Change on Hydropower-​Dominated Power System: The Case of Ethiopia’ (2022) 12 Applied Sciences 1954; see also Anne Françoise Hivert, ‘Norway Considers Suspending Electricity Export to Avoid Energy Crisis’ Le Monde (20 August 2022) https://​www.lemo​nde.fr/​en/​intern​atio​nal/​ arti​cle/​2022/​08/​20/​nor​way-​consid​ers-​sus​pend​ing-​elec​tric​ity-​expo​rts-​to-​avoid-​an-​ene​rgy-​crisi​s_​59​ 9422​6_​4.html. 90 François De Beaupuy, ‘EDF Expects Nuclear Output Cuts in Summer on Low River Level’ Bloomberg (5 July 2022) https://​www.bloomb​erg.com/​news/​artic​les/​2022-​07-​05/​edf-​expe​cts-​nucl​ear-​ out​put-​cuts-​in-​sum​mer-​on-​low-​river-​lev​els?lea​dSou​rce=​uver​ify%20w​all. 91 See Jinsun Lim and others, ‘Climate Resilience for Energy Security’ IEA (November 2022) https://​ iea.blob.core.wind​ows.net/​ass​ets/​10229​b31-​fd82-​4371-​b92c-​a554f​9536​9ea/​Climate​Resi​lien​cefo​rEne​ rgyS​ecur​ity.pdf. 92 See ibid 134 (noting the risk of climate change for pipeline infrastructure).

Conclusion  173 As discussed in Chapter 8, the Paris Agreement and the Glasgow Climate Pact address adaptation.93 Adaptation will impose significant energy equity issues because it will require new sources of energy to come online to satisfy demand driven by climate change itself. This already creates tension between adaptation and mitigation goals. The increased energy resilience issues created by climate change add a further layer of complication. As a matter of resilience planning, increasing the components of the energy mix is particularly desirable when each potential source of energy is under stress. This is the more the case when each source of energy is under stress for independent reasons (drought, lack of wind, and lack of sunshine tend not to occur at the same time, thus suggesting that renewables be mixed together; similarly, fossil fuel value chains experience different stresses from renewables and nuclear).94 It is therefore, once again, helpful to maintain a diversified mix of each. This would counsel against a draw-​down of fossil fuel-​based parts of the energy system as an adaptation measure.95 The complex overlap of energy equity, climate change, and energy security create significant planning problems for adaptation policy. None of the different areas of need can be discounted given the challenges ahead. Energy security planning is therefore a crucial component of adaptation under the Paris Agreement and Glasgow Climate Pact and plays a critical part under the right to energy.

VIII Conclusion The discussion in this chapter has outlined six energy equity principles. There is a significant potential for competition between the energy security principles as 93 See Paris Agreement, art 7(1). 94 Mekonnen and others (n 89) (suggesting that when hydropower reaches its maximum potential due to drought, ‘to keep the reserve margin, solar PV, CSP, and nuclear technologies will gradually expand their share of total capacity in the power system in the future’). 95 Some argue that the energy security situation calls for an increased reliance on renewables and nuclear energy and a drawdown of fossil fuels. For such a position see eg Serhan Cevik, ‘Climate Change and Energy Security: The Dilemma or Opportunity of the Century?’, International Monetary Fund, Doc No WP/​22/​174 (September 2022). The main energy security variable on the basis of which the author submits that increased reliance on renewables and nuclear power increases energy security is that ‘a 10 percentage point increase in the share of non-​hydrocarbon energy is associated with a reduction of 6 percentage points in energy imports, after controlling for conventional factors’. ibid 13. The author therefore (a) looks predominantly to a shortening of energy value chains as a means of increasing energy security (as opposed to a balanced global liberalization of energy supplies and shortening of energy value chains) and (b) does not account for the energy resilience challenges climate change poses for energy generation itself (eg the drop in energy generation from hydropower and nuclear power due to European drought conditions). The assumption concerning a reduction in energy imports further may be looking only at part of the energy value chain (ie it may not account for the raw materials needed to produce solar PV panels such as polysilicon. As discussed, this polysilicon is produced predominantly in the People’s Republic of China rather than the European countries studied in the paper. The focus of the paper on only some energy security factors highlights the dangers of selective energy security decision-​making. Such selective decision-​making in turn can lead to energy rationing even when generation is non-​intermittent traditional baseload non-​fossil fuel-​based (ie nuclear and hydropower).

174  The Energy Security Principles well as energy equity principles and the climate principles discussed in the previous chapters. Energy security requires continued reliance on more expensive and more climate unfriendly energy sources to increase the reliability and resilience of energy systems. This has a potentially negative impact in that it limits available climate change mitigation pathways. It also increases the cost of energy systems for end consumers. Climate principles and energy equity principles therefore can clash with energy security principles. As discussed already in the last chapter, clashes between different principles cannot be resolved by giving categorical preferences to any one of the governance limbs discussed so far. They have their own independent basis in separate areas of international law. The task therefore is balancing different demands rather than ignoring one demand for the benefit of another. The human rights logic outlined in the last chapter provides an initial look at how such conflicts can be resolved. In the first place, the goal of any action must be the progressive realization of all rights. Energy security mechanisms discussed in this chapter are no exception—​they aim at development and such have a common goal with the human rights instruments discussed in the last chapter. This means that there is a common goal which all three areas of law discussed so far share in common, even as each provides a different and potentially conflicting contribution to attaining that goal. This means that there is a way to think about value clashes holistically within a legal framework. This chapter has also shown that energy security dovetails with the right to energy and the climate principles. In the first place, to increase energy security it is of tantamount importance to limit the negative effects of climate change on energy systems. This means that climate change mitigation is central concern for energy security. Further, energy security is important precisely because it shares a common concern with energy equity—​the right to energy. It is possible, and indeed necessary, to read these sets of principles together as they mutually reinforce each other. The obligations of a just transition cannot be met without regard for the right to energy as equity and security and the climate imperative. It is thus possible to continue to trace the contours of a means of integrating the different legal principles governing energy transition. They all function according to a logic of correlative rights that impose a reasonable use, fair distribution, and a prohibition of waste. This logic of correlative rights is at the heart of a development-​ based, human rights-​driven transition. The following chapters will highlight how these principles can continue to be integrated with each other to provide equitable, reliable, sustainable, and just energy access following the energy transition.

10

The Environmental Sustainability Principles I Introduction The last three chapters addressed the heart of the energy trilemma of climate change, energy equity, and energy security. While these three areas constitute the core of international energy transition governance, they must be viewed in a broader context of how energy value chains impact the environment outside of the climate context and how they affect communities at core nodes. The next two chapters will address these additional points to provide a complete picture of how international law governs energy transition. This chapter is concerned with the transboundary environmental sustainability of energy systems in transition outside of the climate context. This environmental sustainability adds a further consideration to energy transition governance. This consideration again is not immediately obvious when considering the big picture challenges that face decision-​makers seeking to navigate energy transition pathways. These challenge focus on the most immediate environmental and energy issues to be resolved. However, just because energy transition imposes problems that are uniquely tied to energy systems does not mean that energy transition does not also deal with ‘ordinary’ environmental problems. These ‘ordinary’ problems that plague any large-​scale economic development do not disappear in the energy context. To the contrary, given the resource footprint of energy production and storage, energy transition must also account for these non-​climate environmental risks of energy transition. Given the international environmental law origins of climate law, transboundary environmental sustainability in the climate context is closely related to the climate principles developed in Chapter 7. This chapter therefore will not re-​tread ground already covered in the context of the discussion of the climate principles. Instead, this chapter will focus on the additional principles that relevantly apply in the transboundary environmental setting outside of the specialized climate law regime. It will consider three core principles that take on a more significant importance in the international environmental setting beyond the climate regime. These three areas are the right of participation in environmental decision-​making, the obligation to protect biodiversity, and the obligation to protect the oceans. The chapter also will contextualize transboundary environmental sustainability issues faced by energy transition outside of the immediate climate context so as to provide a more practical understanding of the importance of the principles

176  The Environmental Sustainability Principles developed in this chapter. Due to space constraints, the problems discussed are a selection of three core issues rather than exhaustive treatment of all potential issues. These three issues concern resource extraction, building a circular energy economy, and climate engineering.

A  The Environmental Sustainability Principles (1) The Overlap with Climate Principles The energy transition principles developed in the context of international environmental law addressing climate change apply mutatis mutandis to environmental protection more broadly. The principles are Energy Transition Principle 17: The General Environmental Harm Prevention Principle Energy Transition Principle 18: The Sovereign Choice of Means of Environmental Protection Energy Transition Principle 19: Common but Differentiated Responsibility in General Environmental Law Energy Transition Principle 20: Environmental Impact Assessment and Monitoring   

Energy Transition Principle 21: Environmental Precaution

All climate law principles developed in Chapter 7 are also environmental sustainability principles. The following five principles are at home (in one form or another in both settings): • Environmental Sustainability Principle 1: The Harm Prevention Principle. The harm prevention principle is the foundational principle of international environmental law. In both settings, the principle can be derived from delictual or non-​delictual sources. Procedurally, the principle requires states to act with care in establishing whether or not certain activity is likely to give rise to harm in the future and to consult and communicate with affected stakeholders.1 Substantively, states must aim actually to prevent harm.2 • Environmental Sustainability Principle 2: Sovereign Choice of Means. Domestic law does not license states to inflict transboundary harm on third states in 1 See Jutta Brunnée, Procedure and Substance in International Environmental Law (Brill 2020) 32. 2 See ibid. See also ILC Draft Articles on the Prevention of Transboundary Harm from Hazardous Activities, Yearbook of the Intl L Commission (2001) 148. The ILC article codify customary international law. Patricia Birnie and others, International Law and the Environment (OUP 2009) 141.

introduction  177 violation of the harm prevention principle.3 However, the manner in which states prevent transboundary harm—​and the manner in which states implement domestic efforts at environmental protection—​remains up to each state.4 States may bind themselves by international treaties to achieve certain environmental goals in specific ways such as the reduction of production and consumption of chlorofluorocarbons as part of the Montreal Protocol in order to protect the ozone layer.5 • Environmental Sustainability Principle 3: Common but Differentiated Responsibility. Developing states bear responsibility for environmental protection consistent with their historical position and developmental capabilities. Depending upon circumstances, differentiation sets different standards for compliance or allows different time periods for achievement of environmental outcomes.6 This principle is one as to which environmental law may differ from climate law due to climate law’s switch to a solidarity perspective from a differentiation perspective. • Environmental Sustainability Principle 4: Environmental Impact Assessment and Monitoring. International environmental law recognizes a customary international law duty to conduct environmental impact assessments. States must conduct such assessments when there is a high likelihood of transboundary pollution leading to significant environmental harm in one or more neighbouring states.7 Such environmental impact assessments must be conducted prior to the undertaking or licensing of new activities or projects.8 They must outline the specific potential environmental impacts of the planned activity. They further must provide alternatives that might avoid environmental impacts as well as outline measures to avoid them. International law requires that states take account of the results of such impact assessments in their decision-​making.9 • Environmental Sustainability Principle 5: Precaution. International environmental law follows Principle 15 of the Rio Declaration on precaution. It states that ‘[w]‌here there are threats of serious or irreversible damage, lack of full

3 Alain Pellet, ‘The Definition of Responsibility in International Law’ in James Crawford and others (eds) The Law of International Responsibility (OUP 2010). 4 This is the point of the procedural obligations of the no-​harm/​harm prevention principle. Brunnée (n 1) 32. So long as the state follows a certain process and aims to achieve a particular goal, the policy choices made to do so remain up to the state in question. 5 Montreal Protocol on Substances Depleting the Ozone Layer, 1522 UNTS 3 (16 September 1987) art 2. For a discussion of the 1987 Montreal Protocol see Philippe Sands and Jacqueline Peel, Principles of International Environmental Law (4th edn, CUP 2018) 277–​90. 6 Edith Brown Weiss, Establishing Norms in a Kaleidoscopic World (Brill 2020) 173. 7 See Pulp Mills on the Uruguay River (Argentina v Uruguay) 2010 ICJ 4, 83 (20 April); Certain Activities/​Construction of a Road (Costa Rica v Nicargua) [2015] ICJ Rep 665, 706 (16 December 2015). 8 ibid. 9 ibid; Certain Activities/​Construction of a Road (Costa Rica v Nicargua) (n 7) 707.

178  The Environmental Sustainability Principles scientific certainty shall not be used as a reason for postponing cost-​effective measures to prevent environmental degradation’.10 In some instances, there are potential differences in the content of those principles due to the recent departure of climate law from classic international environmental law. For example, the common-​but-​differentiated-​responsibility principle evolved in the climate context into a principle of responsibility supported by international solidarity. Rather than exempting developing states from the energy transition, this means that developing states will receive the immediate benefit of participating in the new technological paradigm shift of energy transition rather than continuing on with an obsolescent technological paradigm.11 This evolution also begins to address climate leakages a strict differentiation can introduce in a globalized economy.12 This same insight applies in the current context. Environmental safety of energy value chain inputs must be consistent with global best practices. Otherwise, energy transition benefits would accrue at the costs of pollution harm done to the population in developing countries. This is inconsistent with the goal of a just transition. Similarly, economic opportunities needed to support energy transition discussed in Chapter 8 must also maintain environmental best practices to avoid the same problem. Thus, because the projects discussed in this chapter all concern energy transition, it is functionally appropriate to import the climate principle understanding of common but differentiated responsibility from the climate setting.

B  Additional Environmental Sustainability Principles International environmental law provides several additional principles not already considered in other chapters. These additional principles are not expressly included in the climate context. Rather, they are at times implicit. The environmental principles below therefore are additive to the principles discussed so far. They must be borne in mind in the context of ordinary environmental permitting decision-​making discussed in this chapter. They may also have relevance in the climate context.

(1) The Right to Participation Energy Transition Principle 22   



States must allow for meaningful stakeholder participation in decision-​making that poses a significant risk of severe environmental harm.

10

1992 Rio Declaration, principle 15. See ch 7. 12 ibid. 11

introduction  179 The energy equity discussion in Chapter 8 already introduced the principle of community participation in decision-​making as a matter of the right to energy. This participation will further become important in the context of community and indigenous rights in Chapter 11. International environmental law includes a robust consultation and participation obligation. This obligation is already implicit in the procedural obligations contained in the harm-​prevention principle, as well as in the context of the requirement to conduct environmental impact assessments.13 Some treaties extend the obligation to consult extends beyond states to include affected communities. The first such convention is the Espoo Convention.14 The Espoo Convention regulates how to conduct environmental impact assessments.15 It regulates the notification of adversely impacted states.16 It goes on to demand that ‘concerned Parties shall ensure that the public of the affected Party in the areas likely to be affected be informed of, and be provided with possibilities for making comments or objections on, the proposed activity’.17 The Espoo Convention further mandates that ‘in the final decision on the proposed activity, due account is taken of the outcome of the environmental impact assessment, including the environmental impact assessment documentation, as well as the comments thereon received’.18 The second important convention in this regard is the Aarhus Convention.19 The Aarhus Convention guarantees that state parties must make environmental information public upon request.20 To support this guarantee, the Convention further requires that states follow appropriate archival practices with regard to environmental information.21 The Aarhus Convention provides a necessary predicate for broad public participation in environmental decision-​making.22 It secures adequate notice both of the fact of decision-​making and of the means for public participation.23 It further requires states to adopt a procedure that allows meaningful time for the preparation of public comments.24 The Convention finally

13 See Brunnée (n 1) 75–​76; Birnie and others (n 2) 123. 14 Convention on Environmental Impact Assessment in a Transboundary Context (Espoo Convention) 1989 UNTS 309 (1991). 15 ibid. 16 ibid art 3(1). 17 ibid art 3(8). 18 ibid art 6(1). For a discussion of the Espoo Convention as part of a broader transparency movement see Tom Sparks and Anne Peters, ‘Transparency Procedures’ in Lavanya Rajamani and Jacqueline Peel (eds) The Oxford Handbook of International Environmental Law (2nd edn, OUP 2021) 904. 19 Convention on Access to Information, Public Participation in Decision-​Making and Access to Justice in Environmental Matters (Aarhus Convention) 2161 UNTS 447 (1998). 20 ibid art 4(1). 21 ibid art 5. 22 ibid arts 6, 7. 23 ibid art 6(2). 24 ibid art 6(3).

180  The Environmental Sustainability Principles requires that ‘in the decision due account is taken of the outcome of the public participation’.25 While neither the Espoo nor the Aarhus Convention are broadly ratified, the principles they contain codifies existing legal obligations.26 The right to participation outlined in the Espoo and Aarhus Conventions is fully consistent with, and realizes, the right to participation in the human rights context. Most importantly, this right to meaningful participation is critical for the right to development.27 It is further noteworthy that the principles included in both conventions reflect efforts codified in national law to provide for such rights of participation beginning with the passage of the National Environmental Policy Act (NEPA) in the United States in 1970. The values of NEPA have since found a significant number of adopters, providing support significantly beyond the signatories of the Espoo Convention and Aarhus Convention principles.

(2) The Obligation to Protect Biodiversity Energy Transition Principle 23   

States and stakeholders must take into account the impacts of proposed policies, projects, energy value chain inputs, and energy systems on biodiversity.

So far, the discussion of international environmental law principles has focused on the environment as environs. The discussion has focused on the environment as the surrounding in which human activity can thrive. Despite the linguistic vestiges of ‘environmental law’, most people do not think of environmental law as protecting the space in which human activity can take place. Rather, the term today denotes something closer to a protection of nature. On the one hand, the development of global environmental law thinking is closely connected with epochal legislative efforts in the 1970s. In the US, this period led to the passage of the Clean Air Act and the Clean Water Act.28 These acts are

25 ibid art 6(8). For a commentary see Sean Whittaker, The Right of Access to Environmental Information (CUP 2021). 26 The Espoo Convention has 45 parties of the time of the writing of this book. See Status, Espoo Convention https://​treat​ies.un.org/​pages/​View​Deta​ils.aspx?src=​IND&mtdsg​_​no=​XXVII-​4&chap​ ter=​27&clang=​_​en The Aarhus Convention has 46 parties as of the time of the writing of this book. See Status, Aarhus Convention https://​treat​ies.un.org/​Pages/​View​Deta​ils.aspx?src=​IND&mtdsg​_​no=​ XXVII-​13&chap​ter=​27. 27 Convention on the Right to Development (Second Draft, arts 3(a), 4(2)). 28 See Adam Babich, ‘Back to the Basics of Antipollution Law’ (2018) 32 Tulane Env LJ 1, 6–​7. For the development of US environmental law in the 1970s see Alexandra B Klass, ‘Common Law and Federalism in the Age of the Regulatory State’ (2007) 92 Iowa LR 545, 567. On the motivation for their passage see Daniel Farber, ‘Politics and Procedure in Environmental Law’ (1992) 8 Journal of Law, Economics, & Organization 59.

introduction  181 consistent with a human-​centred vision of the environment as a space for human activity. On the other hand, this period also saw the passage of the Endangered Species Act in 1973. The Endangered Species Act protected nature in its own right. US efforts had a strong influence on similar comprehensive schemes in the West, strengthening for example German efforts to provide national legislative solutions to environmental protection at the same time.29 Legal theory owes one of its most well-​known examples to the clash between this new naturalist legislative movement and the right to energy: the protection of the snail darter. Ronald Dworkin makes the protection of the fish from the construction of hydroelectric power dam by the Tennessee Valley Authority a cause célèbre of theories of statutory interpretation:30 statutes like the Endangered Species Act will in fact be allowed to override energy demands despite the absence of any cognizable human interest in the underlying species to be protected.31 International environmental law is more ambivalent. For example, Principle 4 of the 1972 Stockholm Declaration states that ‘[m]‌an has a special responsibility to safeguard and wisely manage the heritage of wildlife and its habitat, which are now gravely imperilled by a combination of adverse factors’.32 The focus here is on safeguarding and conserving nature in its own right.33 Nevertheless, the focus is more on human well-​being in this context: the leading commentaries on international environmental law anchor the protection of nature in international law in the benefits nature provides for human wellbeing.34 This conflict remains present in the principal treaty protecting biodiversity.35 The Biodiversity Convention anchors its approach in both ‘the intrinsic value of biological diversity’ at the same time as it also highlights ‘the ecological, genetic, social, economic, scientific, educational, cultural, recreational and aesthetic values of biological diversity for biological diversity’.36 The Convention therefore does not resolve the nature/​man dichotomy. The Biodiversity Convention follows a procedural, bottom-​up governance approach. It requires states to ‘[d]‌evelop national strategies, plans or programs for the conservation and sustainable use of biological diversity’,37 as well as to ‘[i]ntegrate, as far as possible and as appropriate, the conservation and sustainable use of biological diversity into relevant sectoral or cross-​sectoral plans, programmes and 29 See Helmut Weidner, ’25 Years of Modern Environmental Policy in Germany, Treading a Well-​ Worn Path to the Top of the International Field’ (1995) FS II 95-​301 Wissenschaftszentrum Berlin für Sozialforschung 2. 30 Ronald Dworkin, Law’s Empire (HUP 1986) 20–​23, 112, 125–​26, 131, 137. 31 Tennessee Valley Authority v Hill 437 US 153 (1978). 32 1972 Stockholm Declaration, principle 4. 33 ibid. 34 Sands and Peel (n 5) 385; Birnie and others (n 2) 583. 35 Convention on Biological Diversity (5 June 1992) 1760 UNTS 79, 31 ILM 818 (1992). For a thorough introductory discussion of the Convention see Birnie and others (n 2) 612–​39. 36 1992 Convention on Biological Diversity, preamble. 37 ibid arts 6(a), 10.

182  The Environmental Sustainability Principles policies’.38 It integrates biological diversity in impact assessment procedures (subject to a caveat that this obligation applies ‘as far as possible and as appropriate’).39 This assessment is tied to monitoring obligations (again modified by ‘as far as possible and as appropriate’).40 It further requires international cooperation with regard to biological diversity measures particularly as outlined in the treaty.41 As a general rule, biological diversity therefore should be a consideration that is included in the planning of energy transition processes. Thus, to the extent that states already conduct environmental impact assessments in the first place, these assessments should reflect biological diversity considerations.42 However, unlike the protection of the snail darter under the Endangered Species Act, biodiversity concerns do not have the power to stop energy projects outright.

(3) The Obligation to Protect the Oceans Energy Transition Principle 24

(1) States must adopt energy policies, energy value chain inputs, and energy systems that preserve and protect the maritime environment. (2) States must take appropriate measure to prevent, reduce and control pollution of the marine environment from any source.   

The protection of the marine environment follows the same principles outlined so far in this chapter. It nevertheless creates particular, thorny issues. An important distinction between the oceans and other environmental regulatory spaces is that parts of the ocean are not subject to the sovereignty of any one state. The different areas over which states have jurisdiction are set out in the landmark multilateral convention governing the oceans, the 1982 UN Convention on the Law of the Sea (UNCLOS):43 territorial sea (full sovereignty),44 exclusive economic zones (exclusive licensing and regulatory authority),45 and to the continent shelf.46 However, at some point, the sovereign regulatory prerogative of states runs out. Parts of the 38 ibid. 39 ibid art 14. This modification in practice means that ‘the provision at issue does not create an obligation to carry out an environmental impact assessment before undertaking an activity that may have significant adverse effect on biological diversity’. Construction of a Road (Nicaragua v Costa Rica) [2015] ICJ Rep 665, 723 (16 December 2015). 40 1992 Convention on Biological Diversity, art 7. 41 ibid art 5. 42 Addis Ababa Principles and Guidelines for Sustainable Use of Biodiversity (11 November 2006), principle 11. 43 UN Convention on the Law of the Sea 1833 UNTS 397 (1982). 44 ibid arts 2–​3. 45 ibid arts 55–​58. 46 ibid arts 76–​77.

introduction  183 ocean are not subject to any sovereign authority. Instead, these parts of the ocean are part of the common heritage of humankind.47 The different ocean zones of are connected. Pollution of the ocean in the territorial sea or exclusive economic zone can impact other areas of the ocean that are the common heritage of humankind and vice versa. Similarly, conduct while sailing the ocean will have effects on different areas. This interconnection of regulatory arenas makes regulating pollution of the marine environment complex. Despite these complexities (many of which are beyond the scope of this chapter), several principles stand out for current purposes. First, UNCLOS provides that states ‘have an obligation to protect and preserve the marine environment’.48 As one tribunal noted, UNCLOS ‘does impose a duty on State Parties’.49 It explained further that the ‘ “general obligation” extends both to “protection” of the marine environment from future damage and “preservation” in the sense of maintaining or improving its condition’.50 Secondly, UNCLOS requires that states ‘shall take, individually or jointly as appropriate, all measures consistent with this Convention that are necessary to prevent, reduce and control pollution of the marine environment from any source, using for this purpose the best practicable means at their disposal and in accordance with their capabilities’.51 It covers ocean pollution from land-​based or atmospheric sources. UNCLOS specifically requires that ‘states shall adopt laws and regulations to prevent, reduce and control pollution of the marine environment from land-​based sources’.52 This principle must be read in conjunction with the customary international law rule that use of property may not injure a third party (sic utere tuo ut alienum non laedas).53 UNCLOS itself provides reasonably flexible standards as to what regulation satisfies its requirement.54 The area therefore remains somewhat ill-​specified, meaning that the specific obligations of states can only be derived from general principles within UNCLOS and from customary international law.55

47 ibid arts 136–​37. 48 ibid art 192. 49 South China Sea Arbitration (Philippines v People’s Republic of China) PCA Case No 2013-​19, Award (12 July 2016) 941. 50 ibid. For an assessment of the impact of the South China Sea Arbitration on the interpretation of Article 192 of UNCLOS see Natalie Klein and Kate Parlett, Judging the Law of the Sea (OUP 2022) 343–​44. 51 UNCLOS, art 194. 52 ibid art 207. 53 Yoshifumi Tanaka, ‘Regulation of Land-​Based Marine Pollution’ in David Joseph Attard and others (eds), The IMLI Manual on International Maritime Law: Volume III: Marine Environment and International Maritime Security (OUP 2016) 139, 142. 54 ibid 146. 55 See ibid 149 (noting that ‘[o]‌verall it can be observed that attempts to address land-​based marine pollution at the global level have been made only in the form of less formal instruments. In this sense, it may have to be accepted that regulation at the global level remains weak’).

184  The Environmental Sustainability Principles Environmental impact assessments are the key means to reduce and control such marine pollution. UNCLOS requires states to conduct an environmental impact assessment when they ‘have reasonable grounds for believing that planned activities under their jurisdiction or control may cause substantial pollution of or significant and harmful changes to the marine environment’.56 UNCLOS further imposes monitoring requirements for marine pollution.57 The results of this monitoring must be published to permit public participation.58 UNCLOS in sum ‘entails a positive obligation to take active measures to protect and preserve the marine environment, and by logical implication, entails the negative obligation not to degrade the marine environment’.59 It is not enough for a state simply to assert that it has conducted environmental impact assessments. The issue was squarely raised in the South China Sea Arbitration with regard to the construction by the People’s Republic of China of artificial reefs on the Spratly Islands.60 The Philippines asserted that China’s conduct was unlawful in part because it had violated Article 206 of UNCLOS, ie ‘there is simply no evidence that China carried out such an EIA and no science-​based evaluation has been made public or communicated to the Philippines or to ‘the competent international organizations’ as required by Articles 205 and 206 of the Convention’.61 While the People’s Republic of China did not participate in the proceedings, its ‘position can be discerned from contemporaneous official statements’.62 These statements included a statement by a spokesperson that ‘China’s construction projects on the islands and reefs have gone through scientific assessments and rigorous tests’.63 The statements that could be located failed to live up to Chinese law requirements for an environmental impact assessment.64 These statements therefore could not stand in for an environmental impact assessment.65 The tribunal ruled that the People’s Republic of China violated UNCLOS Article 206 at the very least because it failed to publish its environmental impact assessment.66 A further relevant problem is the dumping (or disposal) of wastes in the ocean. UNCLOS requires that states adopt laws, rules, regulations etc. to control dumping.67 The 1972 London Convention provides more guidance.68 It provides 56 UNCLOS, art 206. 57 ibid art 204. 58 ibid art 205. 59 ibid art 205. 60 South China Sea Arbitration (Philippines v People’s Republic of China) (n 49). For a discussion of this part of the South China Sea Arbitration see Sands and Peel (n 5) 665–​66. 61 South China Sea Arbitration (Philippines v People’s Republic of China) (n 49) 911. 62 ibid 912. 63 ibid 917. 64 ibid 990. 65 ibid 990. 66 ibid 991. 67 UNCLOS, art 210. See also UNCLOS, arts 211–​12. 68 Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter (London Convention) 1046 UNTS 120 (1972).

Resource Extraction  185 an influential definition of dumping as ‘any deliberate disposal at sea of wastes [material or substance of any kind, form or description] or other matter from vessels, aircraft, platforms or other man-​made structures at sea’,69 as well as ‘any deliberate disposal at sea of vessels, aircraft, or other man-​made structures at sea’.70 The London Convention introduces a permitting regime for the disposal of some waste in the ocean. It prohibits the disposal of highly hazardous waste in the ocean outright.71 The London Convention has since been updated by a Protocol signed by some of the members of the Convention. The general principle of prohibiting unauthorized disposal of waste in the ocean remains in force under the Protocol, as well. The Protocol uses a reverse list approach to permit authorized disposal of some materials and prohibits all other disposal.72

II  Energy Transition-​specific Sustainability Challenges: Resource Extraction Energy value chains create several specific areas of concern from an environmental sustainability perspective. The first of these areas of concern is resource extraction. Before addressing how the principles developed in this chapter could apply to resource extraction supporting energy transition, there remains an important threshold issue. To what extent does the environmental impact of such resource extraction qualify as transboundary impact? The rules discussed in this chapter differ with regard to transboundary impact and with regard to purely domestic impact. The no harm/​harm prevention rule applies principally to transboundary harm.73 It applies—​but with less force—​to harm to the environment that is purely domestic.74 Due to the global nature of energy value chains, environmental impacts of these value chains are global and thus should be analysed through both a domestic and transboundary harm lens.   

From an energy perspective, the environmental externalities of energy value chains in all but the fewest instances are extra-​territorial. Energy value chains connect inputs from different producers from resource source through refinement through to generation to the final consumer. Although there are exceptions, energy

69 70 71 72 73 74

ibid art III(a)(i). ibid art III(a)(ii). ibid art IV. Sands and Peel (n 5) 482–​83. Brunnée (n 1) 52. Weiss (n 6) 162.

186  The Environmental Sustainability Principles value chains today are principally global. Few states are able to keep the entire energy value chain within their national borders (although energy security pushes states to pursue such autarchy with more or less success). Gas from Algeria, Libya, the Russian Federation, Qatar, and Australia is exported to China, Germany, Italy, and Japan, etc.75 Oil from OPEC member states to a large extent is produced for export rather than domestic consumption.76 The People’s Republic of China exports its polysilicon and solar panels.77 The Democratic Republic of Congo exports its cobalt.78 Argentina is looking for export markets for its lithium, and so on.79 From an energy perspective, it is therefore reasonably straightforward to look at the environmental effects from energy value chains as quintessentially global. Energy value chains create transboundary economic opportunities. This suggests that the environmental harms associated with even seemingly domestic elements of an energy value chain offload that harm globally when seen in the context of the value chain as a whole. States on the territory of which resource extraction or refinement occur have primary jurisdiction with regard to the environmental management of the relevant segment of the energy value chain.

  

Other stakeholders have residual responsibility to prevent pollution to account for potential transboundary harm arising from the energy value chain as a whole.

If one accepts an energy-​based understanding of energy extraction, environmental management of resource extraction takes on a greater complexity. It suggests that the state on the territory of which extraction occurs has the principal 75 Robin Mills, ‘Why Algeria Cannot Solve Europe’s Gas Problem’ The Arab Weekly (30 July 2022) https://​theara​bwee​kly.com/​why-​alge​ria-​can​not-​solve-​euro​pes-​gas-​prob​lem; ‘Reports: Libya Denies Cutting Gas Exports to Italy’ Al-​Monitor (11 July 2022) https://​www.al-​moni​tor.com/​origin​als/​2022/​ 07/​repo​rts-​libya-​den​ies-​cutt​ing-​gas-​expo​rts-​italy; Ann M. Simmons, ‘Russia’s Gas Production, Exports Shrink Under Sanctions Pressure’ Wall Street Journal (26 December 2022) https://​www.wsj.com/​artic​ les/​russ​ias-​gas-​pro​duct​ion-​expo​rts-​shr​ink-​under-​sancti​ons-​press​ure-​1167​2070​094; ‘Qatar Becomes World’s Largest LNG Exporter: Kamco Invest’ Hellenic Shipping News (10 August 2022) https://​www. helle​nics​hipp​ingn​ews.com/​qatar-​beco​mes-​wor​lds-​larg​est-​lng-​expor​ter-​kamco-​inv​est/​; Sonali Paul, ‘Australia Rules Out Curbs on Gas Exports after Producer Deal’ Reuters (28 September 2022) https://​ www.reut​ers.com/​busin​ess/​ene​rgy/​austra​lia-​will-​not-​need-​curb-​gas-​expo​rts-​minis​ter-​says-​2022-​ 09-​29/​. 76 OPEC Monthly Oil Market Report (December 2022) https://​momr.opec.org/​pdf-​downl​oad/​. 77 Edmund Xu, ‘Polysilicon from Xinjiang Permeates Global Chains, Prohibited from Entering United States’ Kharon (29 June 2022) https://​www.kha​ron.com/​upda​tes/​poly​sili​con-​from-​xinji​ang-​ permea​tes-​glo​bal-​sup​ply-​cha​ins-​pro​hibi​ted-​from-​enter​ing-​uni​ted-​sta​tes/​. 78 For a journalist analysis of cobalt exports from Democratic Republic of Congo see Nicolas Niarchos, ‘The Dark Side of Congo’s Cobalt’ New Yorker (24 May 2021) https://​www.newyor​ker.com/​ magaz​ine/​2021/​05/​31/​the-​dark-​side-​of-​con​gos-​cob​alt-​rush. 79 ‘Argentina Could Help the World by Becoming a Big Lithium Exporter’ The Economist (15 November 2022) https://​www.econom​ist.com/​the-​ameri​cas/​2022/​11/​15/​argent​ina-​could-​help-​the-​ world-​by-​becom​ing-​a-​big-​lith​ium-​expor​ter.

Resource Extraction  187 regulatory prerogative to choose the means of environmental protection appropriate for the resource extraction in question. This principal regulatory prerogative is a corollary of permanent sovereignty over natural resources. A state is by definition permitted to determine how it will exploit its own resources without foreign interference.80 At the same time, other participants in the energy value chain have a significant residual responsibility to prevent pollution. These other energy value chain participants take part in, and profit from, a value chain that imposes significant environmental externalities in resource producing states. These energy value chain participants therefore bear responsibility for putting the state regulating the underlying extractive activity in a position to impose appropriate environmental requirements. Less abstractly, energy value chain inputs produced with less environmental regulation is cheaper given the lower regulatory burden. Downstream resource participants contribute to environmental degradation to the extent that they set price signals consistent with lower regulatory burdens. They therefore bear responsibility to support appropriate environmental protection by setting appropriate prices and other standards for raw materials that bear in mind environmental impacts on producing states. Supply chain diligence programmes are beginning to impose such requirements as a matter of hard law in several European jurisdictions.81 Just as importantly, industry participants in energy value chains are setting industry standards that are consistent with such a transboundary environmental protection perspective (even as these efforts remain at this point in a state of development).82 Even if one divorced resource extraction from resource use, there remain important environmental principles that impact resource extraction. In the first place, extractive activities affect local communities where extraction occurs. This impact includes environmental impact. This impact is subject to community participation requirements in human rights law as discussed more fully in the next chapter. As a matter of purely environmental concern, states continue to have obligations to protect biodiversity even for activity that is purely domestic. This obligation is notably thinner than the obligations owed in a transnational context. As outlined above, states must create national strategies and policy programmes to achieve biodiversity outcomes. States further must integrate biodiversity considerations in existing policy processes.

80 See above. 81 For a brief explanation of EU programmes see ‘Just and Sustainable Economy: Commission Lays Down Rules for Companies to Respect Human Rights and Environment in Global Value Chains’ European Commission (23 February 2022) https://​ec.eur​opa.eu/​com​miss​ion/​pres​scor​ner/​det​ail/​en/​ ip_​22_​1​145. 82 Subodh Mishra, ‘The Cobalt Conundrum: Net Zero Necessity vs. Supply Chain Concerns’ Harvard Law School Forum on Corporate Governance (18 October 2022).

188  The Environmental Sustainability Principles Many states include some form of environmental permitting for resource extraction. To the extent that states have such a requirement, it is likely they will include biodiversity impacts in their environmental permitting considerations. An under-​achievement of domestic law in the environmental permitting context would likely be read as a violation of both domestic law and a failure to fulfil international environmental law obligations.83 The international principles outlined particularly in the context of biodiversity and community participation therefore are applicable no matter whether one considers the mining activity to be part of a global energy value chain or not. This domesticated understanding of energy value chains comes at a significant cost of environmental regulatory leakages.84 States are not obligated to conduct environmental impact assessments under the Biodiversity Convention.85 States wishing to attract investments and find markets therefore could make a choice to write their domestic laws to avoid environmental permitting requirements. Such states would not violate international legal obligations under international environmental law and would choose to accept negative environmental outcomes in order to gain access to international raw material markets. Such negative outcomes are reflected in cheaper prices in end markets (as well as greater profits of intermediary companies dealing in the minerals in question.). It thus trades environmental degradation in one place for economic upswings in another. Such an outcome should strike one as particularly questionable in the context of a legal regime imposing duties of cooperation. It would thus favour a view of extractive activities as forming part of global value chains to introduce needed guardrails to mitigate the worst excesses of environmental regulatory leakages. The perspective adopted in this book places a premium on correlative rights of reasonable use and the prohibition of waste. This view of necessity takes a global perspective of energy value chains. It also sees the use of materials that create needless waste in producing states as fundamentally unreasonable. The perspective adopted in this book therefore suggests that a global view of energy value chains in the ecological context is not just a matter of intuition or ideology. It is a matter of sound regulatory perspective—​it allows environmental concerns to fit into the same mould or regulatory approach that drives energy transition principles in general. This view looks to development and cooperation as a means by which energy value chains become a means to spread economic opportunity. This economic opportunity will benefit the recipients of energy by providing economic opportunity as well as affordable and reliable energy. This economic opportunity also benefits

83 See South China Sea Arbitration (Philippines v People’s Republic of China) (n 49) para 990. 84 Jonathan Baert Wiener, ‘Global Environmental Regulation: Instrument Choice in Legal Context’ (1999) Yale LJ 677, 749. 85 Construction of a Road (Nicaragua v Costa Rica) (n 39).

Building a Circular Energy Economy  189 the upstream participants in global value chains. Both do not have to barter environmental sustainability for cheaper energy inputs.

III  Energy Transition-​specific Sustainability Challenges: Building a Circular Energy Economy The second fundamental challenge for energy transition lies at the other end of the value chain from resource extraction. Once energy systems have run their course, energy inputs are transformed into waste. This waste creates significant disposal problems—​what should one do with solar panels once they have outlived their useful life? The environmental goal must be to avoid such waste. In an ideal world, energy value chains would find a way to reabsorb the end result of the value chain by making it useful to future energy uses. This would reduce the environmental burden of energy systems as a whole. States should endeavour to build a circular energy economy, looking to recycle core energy inputs and prevent waste.   

This idea has given rise to the concept of a circular economy. The European Commission in its 2020 Circular Economy Action Plan defines a circular economy by distinguishing it from an economy premised on ‘the linear pattern of “take-​ make-​use-​dispose”  ’.86 A circular economy breaks with this pattern. A circular economy ‘keeps materials, products and services in circulation as long as possible’.87 As ASEAN’s Framework for Circular Economy for the ASEAN Economic Community explains, ‘a circular economy is restorative, regenerative by design, and makes effective use of materials and energy to retain their value. Competitiveness, efficiency, and resilience are at the heart of the circular economy’.88 The African Circular Economy Alliance provides a helpful guide as to different circularity pathways. It notes that ‘[c]‌ircular opportunities can be classified into solutions to create new loops, slow flows/​loops and narrow loops’.89 It explains that ‘[s]olutions to create new loops advocate for different approaches in reusing, repairing and recycling products when they reach the end of their designed operational life’.90 By contrast, ‘[s]olutions to slow flows/​loops are focused on shifting

86 Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, ‘A New Circular Economy Action Plan’ COM(2020) 98 final, 2.1 (11 March 2020). 87 ‘What is a Circular Economy?’ US Environmental Protection Agency https://​www.epa.gov/​recycl​ ings​trat​egy/​what-​circu​lar-​econ​omy. 88 Framework for Circular Economy for the ASEAN Economic Community (October 2021) 3 https://​asean.org/​wp-​cont​ent/​uplo​ads/​2021/​10/​Broch​ure-​Circu​lar-​Econ​omy-​Final.pdf. 89 ibid 12. 90 ibid.

190  The Environmental Sustainability Principles to new ways of designing and making (manufacturing) products that ensure extended use while minimizing resource and energy intensity’.91 Finally, ‘[s]olutions to narrow flows/​loops shift the market to more efficient ways of using products and services through changing usage patterns’.92 The problem of circularity is deeply enwoven in energy systems. As it stands, global energy systems tend to follow ‘the linear pattern of “take-​make-​use-​ dispose” ’.93 This is true for fossil-​fuel based energy, as well as for nuclear and renewables. In the hydrocarbons context, one of the obvious waste products is CO2 emissions at issue in the climate principle.94 CO2 emissions can be recycled as part of a circular carbon economy as some core initiatives such as the Saudi Arabian circular carbon economy initiative discussed in more detail below outline.95 Less visibly, oil and gas infrastructure must be decommissioned after they have stopped producing in paying quantities.96 This can involve significant environmental remediation. In the nuclear context, storage of spent fuel rods is one of the key environmental sustainability problem critics of the industry have identified for years.97 In the context of renewables, solar PV panels have a reasonably limited useful life.98 How to dispose of solar PV panels is thus a similarly pressing issue. Finally, in the context of electrification of transportation, batteries have a limited useful life.99 How to dispose of batteries after their useful life is a similarly pressing issue.100 Just as importantly, the problems of how to deal with end-​of-​life cycles is critical to the fulfilment of environmental obligations. The linear pattern of design of energy systems ending in disposal of spent energy inputs and infrastructure places significant strain on environmental systems. It places a strain on biological 91 ibid. 92 ibid. 93 ‘A New Circular Economy Action Plan’ (n 86) 2.1. 94 See ch 7. 95 Eric Williams and others, ‘A Guide to the Circular Carbon Economy (CCE)’ King Abdullah Petroleum Studies and Research Center (August 2020). 96 See Owen Anderson and others, International Petroleum Law and Transactions (RMMLF/​ FNREL 2020). 97 On the political organization of opposition to nuclear power in Germany (and opposition around the Gorleben storage facility) as one such example see Dolores L Augustine, Taking on Technocracy, Nuclear Power in Germany, 1945 to the Present (Berghahn Books 2018) 146, 161–​84, 215–​17. 98 Solar PV panels have a useful life of between 25 to 40 years at the outside. ‘Useful Life’ National Renewable Energy Laboratories, https://​www.nrel.gov/​analy​sis/​tech-​footpr​int.html. For a recent discussion of recycling approaches to Solar PV see Royce Kurmelovs, ‘Australian Research Finds Cost-​ Effective Way to Recycle Solar Panels’ Guardian (15 October 2022) https://​www.theg​uard​ian.com/​envi​ ronm​ent/​2022/​oct/​16/​aus​tral​ian-​resea​rch-​finds-​cost-​effect​ive-​way-​to-​recy​cle-​solar-​pan​els. The article was highlighted by IRENA. 99 Gregory Barber and Aarian Marshall, ‘Cars Are Going Electric. What Happens to the Used Batteries?’ Wired (2 November 2021) https://​www.wired.com/​story/​cars-​going-​elect​ric-​what-​happ​ ens-​used-​batter​ies/​ (discussing the lack of marketable recycling technology and significant investment in devising such recycling processes). 100 See ‘An Analysis of Lithium-​ion Battery Fires in Waste Management and Recycling’ US EPA (July 2021) EPA 530 R-​21-​002.

Building a Circular Energy Economy  191 diversity by placing significant stress on ecosystems. These environmental strains can cause transboundary environmental harm (for instance, a radiation event from improperly stored spent nuclear fuel can have global consequences.) While each state must develop its own means to respond to these challenges, there is a common requirement better to design energy systems. Given the global interlinkages of energy value chains, these efforts require significant cooperation towards viable approaches. This cooperation also must make available needed resources to developing states in order to implement approaches domestically in compliance with international energy demands. Such cooperation will require monitoring to detect leakages from environmental compliance standards. Such efforts further must actively solicit meaningful participation from affected community members. Best practices for circular economy planning begin with early promotion of pre-​implementation feasibility studies that consider the social and economic impact of policies and projects as a whole with a particular view to circular economy pathways, build participatory frameworks in which to assess such feasibility studies, and cooperate with other stakeholders relevant to the value chain to formulate an integrated solution to promote a circular approach to end-​of-​life decommissioning.   

ASEAN’s Circular Economy Framework, for instance, is a blueprint that instrumentalizes the legal principles governing environmental sustainability in circular economy planning.101 It seeks to protect environmental sustainability and biodiversity.102 The ASEAN Circular Economy Framework uses economic and technological tools. It premises these tools on six principles to foster cooperation and achieve environmental outcomes. These principles • Promote early, pre-​implementation feasibility studies considering long-​term impacts ‘with financial and institutional feasibility in mind’.103 This planning incorporates core aspects of harm-​prevention discussed above. • Require the ‘[c]‌onsider[ation of] the broader impact on the economy and society’.104 This is consistent with the participation requirement discussed above. • Highlight the differentiated nature of states’ ability to switch to a circular economy by ‘[r]‌ecogni[zing] the unique circumstances of each’ member state.105 101 Framework for Circular Economy for the ASEAN Economic Community (n 88). 102 ibid 3 (noting the traditional focus on environmental perspectives of circular economy programmes). 103 ibid 8 (principle 5). 104 ibid 7 (principle 2). 105 ibid 7 (principle 3).

192  The Environmental Sustainability Principles • Strive to overcome this limitation cooperatively by (1) ‘promot[ing] ASEAN integration and the development of regional value chains’,106 (2) ‘encourage[ing] ASEAN-​wide coordination on knowledge and technology sharing’,107 and (3) ‘function[ing] within the reality of international production linkages’.108 At the same time, to the extent these plans focus on energy, they tend to focus on decarbonization as a key to circular energy systems. One such implicit example is the EU’s circular economy proposal.109 Another explicit example is ASEAN’s Circular Economy Framework.110 Critically, these approaches can lose from view the significant circularity challenges of decarbonized energy value chains themselves. Saudi Arabia’s Guide to a Circular Carbon Economy provides an additional, energy specific policy toolkit for building a circular economy premised on the cyclicity of energy value chains.111 As the Guide observes, the ‘importance of meeting climate goals and the complexity of the energy system necessitate an extension of circular economy—​circular carbon economy—​t hat prioritizes energy and carbon emissions’ over prioritizing cyclicity in non-​energy systems.112 To build a circular carbon economy requires a focus on ‘reduc[ing] the amount of fugitive carbon that must be managed to reach a carbon balance or net-​zero emissions’.113 It further requires a design that builds on recycling in ‘the natural carbon cycle (“living carbon”) in which carbon in the atmosphere is converted through photosynthesis to grow biomass, which in turn can be harvested for bioenergy’.114 The goal of a circular carbon economy is to ‘reach a carbon balance or net-​zero emissions’ meaning that ‘the remaining carbon from hydrocarbons that would otherwise be released into the atmosphere as fugitive carbon must be captured and removed or reused as durable carbon’.115 The Guide outlines several energy specific policy recommendations that are consistent with the Energy Transition Principles. These principles are premised in an innovation and competition market-​based approach. This approach provides a place for the public sector in funding research and creating market places in which research can be tested with a secure return on investment. This approach removes

106 ibid 7 (principle 1). 107 ibid 7 (principle 4). 108 ibid 8 (principle 6). 109 ‘A New Circular Economy Action Plan’ (n 86) 2.1 (interlinking circular economy policies with the green deal). 110 Framework for Circular Economy for the ASEAN Economic Community (n 88) 13. 111 Williams and others (n 95). 112 ibid 8. 113 ibid 12. 114 ibid 15. 115 ibid 16.

Building a Circular Energy Economy  193 these guardrails once technology is sufficiently mature to grow by being exposed to competition.116 • ’Policies that move investment toward closing the loop on resource use by providing incentives for technologies in all four Rs—​reduce, reuse, recycle, remove—​promise the greatest likelihood of success’.117 Such policies ‘include public-​private research and development funding’.118 • Policies should support the development of a competitive market place. This means that ‘once those technologies reach maturity, technology-​focused incentives should be removed so as not to distort the economic decision of choosing which mature technologies to deploy’.119 • Policies should be global and cooperative so as to fully benefit from ‘[g]‌eographic diversity and comparative advantage’.120 This in particular allows the global construction of carbon markets.121 • Policies at this point should focus on both capture and storage of carbon as ‘[p]‌lacing a value only on capturing carbon as an externality and leaving the various parties to pass this value along the chain to the final point of carbon utilization or storage has not been successful in driving CCUS uptake’.122 Each fuel will have different challenges to overcome. Fossil fuels must account for greenhouse gas emissions. Fossil fuel energy value chain design must be premised on the idea of circular carbon.123 Such circular carbon relies on capture of CO2 emissions at large source points through carbon capture (CCUS).124 Alternatively, CO2 could also be captured from the ambient air in low concentration environments by means of direct air capture (DAC).125 CO2 is then used for example as an element for secondary or tertiary recovery from oil and gas fields. Once utilized, CO2 must be stored permanently for example by storing CO2 in geological pore space.126 Similarly, other forms of energy generation will need to consider the environmental externalities inherent in its operation as part of such a circular 116 This approach is fundamentally consistent with the approach outlined in Philippe Aghion and others, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations (HUP 2021). 117 Williams and others (n 95). 118 ibid. 119 ibid. 120 ibid. 121 ibid. 122 ibid 36. 123 For an-​in depth discussion of circular carbon responses by oil producing states and the private sector see Leonardo Sempertegui and Frédéric G Sourgens, ‘The Importance of States and the Private Oil Sector for Successfully Implementing the Energy Transition’ (2022) 67 RMMLF/​FNREL 2–​1. 124 ibid. 125 For an in-​depth discussion of the challenges of direct air capture and how law can assist in resolving them see Frédéric G Sourgens, ‘Geo-​Markets’ (2020) 38 Va Env LJ 58. 126 For a fulsome discussion of CCUS in a global setting see Hirdan Katarina de Medeiros Costa and Carolina Arlota, Carbon Capture and Storage in International Energy Policy and Law (Elsevier 2021).

194  The Environmental Sustainability Principles economy approach (recycling of fissile nuclear fuel; improvement of wildlife risks posed by operation of renewables etc.). Just as importantly, each energy system will have to account for the integration of key extractive components in a circular economic model. This includes mining of materials, power plants, cars, car batteries etc. To comply with the requirements of environmental sustainability, this planning must occur independent of fuel. It should broadly follow the ASEAN framework to safeguard that energy policy remains consistent with the demands of the right to energy and energy security. An energy system that results from such planning will better fulfil the environmental sustainability demands outlined in this section compared to other approaches.

IV  Energy Transition-​specific Sustainability Challenges: Climate Engineering The final fundamental challenge for energy transition is the deployment of engineering solutions intended to force radical climate change ‘externally’—​that is, without a reduction of CO2 concentrations in the atmosphere. The interference in climate systems by such engineering is radical and its potential consequences are not fully known. Current climate change trajectories nevertheless strongly suggest that this form of engineering solution will have to be deployed.127 Current climate projections suggest that the only means to maintain a global ability to reach climate goals in the mid and long term is to deploy geo-​ engineering technologies like solar radiation management.

  

The deployment of such technologies pose a unique and cross-​cutting global governance problem that must be answered by reference to the principles outlined so far to be responsive to environmental sustainability and human rights demands.

There are different engineering solutions to force the climate to change trajectory externally. The principal method (although not the only method) of doing so is by preventing solar energy from entering the atmosphere. To the extent that less solar energy enters the atmosphere, it is possible crudely to set global temperatures. It therefore possible to counteract, in the short term, the mechanics of climate change by changing energy inputs into the climate system.

127 For a fuller articulation of these challenges see Frédéric G Sourgens, ‘The Dark Sun Network’ (2023) 94 Colorado LR 481.

Climate Engineering  195 There are different engineering approaches to such climate forcing. The simplest of these is solar radiation management (SRM) as outlined by Nobel Prize winning physicist Paul Crutzen.128 SRM ‘can be achieved by burning S2 [disulphur] or H2S [hydrogen sulphide], carried into the stratosphere on balloons and by artillery guns to produce SO2 [sulphur dioxide]’.129 In order ‘[t]‌o enhance the residence time of the material in the stratosphere and minimize the required mass, the reactants might be released, distributed over time, near the tropical upward branch of the stratospheric circulation system’.130 Once in ‘the stratosphere, chemical and micro-​physical processes convert SO2 [sulphur dioxide] into sub-​micrometer sulfate particles’.131 Crutzen argued that to change the equilibrium of solar energy entering and exiting the atmosphere (‘radiative forcing’) requires ‘a stratospheric sulfate loading of 1.9 Tg S’, which ‘can be achieved by a continuous deployment of about 1–​2 Tg S per year for a total price of U.S. $25–​50 billion’.132 This form of SRM is also known as stratospheric aerosol injection (SAI).133 There are other SRM approaches other than SAI. For example, it is possible to release engineered reflective nanoparticles into the stratosphere rather than relying on sulphur compounds.134 One could also ‘increase the albedo [whiteness/​ reflectivity] of relatively dark stratocumulus clouds’ by spraying seawater ‘upwards as a fine mist’ in a process known as ‘marine cloud brightening (MCB)’.135 Another method still is to rely on ‘cirrus cloud thinning [CCT] [ . . . ] by injecting ice nuclei, such as bismuth triiodide, into the areas where cirrus clouds are likely to form’.136 More elaborately still, one might ‘consider a system of mirrors in space engineered so that each could be rotated on command’.137 These are just a basic introduction to the means available. Research remains in the early modelling stage or analogy to natural events due to the potentially disruptive consequences of testing the techniques in question.138 Climate engineering pathways are uniquely treacherous, from several perspectives. In the first instance, the ‘Crutzen method’ of climate engineering is feasible today. In principle, it can be launched unilaterally by any one state or non-​state actor with access to planes and US$25–​50 billion. If launched, it would cause a

128 Paul J Crutzen, ‘Albedo Enhancement by Stratospheric Sulfur Injections: A Contribution to Resolve a Policy Dilemma?’ (2006) 77 Climatic Change 211, 212. 129 ibid. 130 ibid. 131 ibid. 132 ibid 213. 133 Jesse L Reynolds, ‘Solar Geoengineering to Reduce Climate Change: A Review of Governance Proposals’ (2019) 475 Proceedings of the Royal Society A 1, 3. 134 David Keith, A Case for Climate Engineering (Boston Review 2013) 72. 135 Reynolds (n 133) 3. 136 ibid. 137 Keith (n 134) 112. 138 See Ken Caldeira and Govindasamy Bala, ‘Reflecting on 50 Years of Geoengineering Research’ (2017) 5 Earth’s Future 10, 14–​15; Reynolds (n 133).

196  The Environmental Sustainability Principles depletion of the ozone layer, as well as significant air pollution and worsening ocean acidification. This harm would be felt globally. This means that SRM would be in conflict with the no harm/​harm prevention principle. Depending on how deployment would occur, it further would violate the participation principle as well as potentially every other principle outlined above. Importantly, the deployment of SRM would be justified on climate grounds. That is, the party deploying SRM would insist that it is addressing the radically disruptive effects of climate change itself. Climate change, if unchecked, would also lead to ecological devastation. That means that SRM may be the ‘least worst’ option. The fact that SRM is in tension with the environmental sustainability principles is not dispositive as to the unlawfulness of their deployment. Climate engineering pathways are treacherous because they cause different results in different places. Depending on how SRM is deployed, it may be possible to have specific regional impacts. These impacts could swap one disaster in one place for climate tranquillity in another. Benefits and burdens of climate engineering therefore are not even distributed. Where benefits and burdens should principally fall also is not a scientifically foregone conclusion. Instead, these are matters of human decision-​making. The principles outlined in this chapter can help to resolve these issues. The procedural requirements of environmental due diligence before deployment are critical to understanding the effects of SRM. This due diligence must be broadly shared and transparently communicated to world society. Governance decisions must be made after full participation by affected persons after they have been able to study and understand the due diligence findings about risks and benefits of the SRM approaches at issue. These decisions must be made cooperatively to protect human well-​being, biodiversity, and the oceans. Whether and how to deploy SRM is one of the many challenges that energy transition decision-​making will have to overcome. The toolkit developed in this chapter and the previous chapter provide a process of decision-​making that can meet these challenges while guided by law. These legal strictures are intended to protect human rights. Further, they view this protection of human rights in energy transition as the exercise of a correlative right. Anyone’s human rights can only be fulfilled to the extent that policy is respectful of reasonable use of shared environmental and climate resources. The insistence on an unreasonably high share of benefits for a disproportionately low share of the burden is going to lead to defection by those negatively affected. As many groups have it in their power to bring the climate, the environment, the right to energy as well as energy security to a point of collapse, it is only possible to solve these problems inter-​relatedly and cooperatively. SRM exemplifies the risk of straying from such a cooperative path.

Conclusion  197

V Conclusion The discussion in this chapter has outlined eight environmental sustainability principles. There is a significant potential for competition between the environmental sustainability principles as well as the principles discussed in the previous chapters. The discussion of SRM in particular should have highlighted that the demands of securing climate outcomes and protecting biodiversity and the oceans can clash with each other. This clash is not reserved for such extreme scenarios like SRM. Rather, the protests by environmental non-​governmental organizations against the installation of renewables installations highlights that environment and climate outcomes frequently are in conflict.139 Energy security concerns in Germany in 2023 led to a flashpoint of permitting coal strip mining at Lützerath despite the significant environmental and climate damage done by the planned activity.140 Clashes are thus preprogrammed across the board. As discussed in each of the previous chapters, clashes between different principles cannot be resolved by giving categorical preferences to any one of the governance limbs discussed so far. They have their own independent basis in separate areas of international law. The task is therefore balancing different demands rather than ignoring one demand for the benefit of another. The correlative rights and human rights logic outlined so far provide an important clue how such conflicts can be resolved. In the first place, the environmental sustainability principles are broadly consistent with the human rights perspective outlined in the previous chapter. While the environmental sustainability principles arguable go beyond the human rights conception by protecting ecosystems in their own right, the international legal perspective remains decided human-​focused even in its protection of biodiversity. In fact, the environmental sustainability principles discussed in this chapter are fully consistent with the human rights understanding of the right to a clean environment—​a view that decidedly places the gravamen of the protection of eco-​systems on their constituting an environment for human activity. This means that there is a common goal which all four areas of law discussed so far share in common, even as each provides a different and potentially conflicting contribution to attaining that goal. This means that there is a way to think about value clashes holistically within a legal framework. 139 See Sammy Roth, ‘Solar and Wind Farms Can Hurt the Environment: A New Study Offers Solutions’ Los Angeles Times (6 October 2021) https://​www.lati​mes.com/​envi​ronm​ent/​new​slet​ter/​2022-​ 10-​06/​solar-​and-​wind-​farms-​can-​hurt-​the-​envi​ronm​ent-​a-​new-​study-​off​ers-​soluti​ons-​boil​ing-​point. 140 Alan Taylor, ‘Despite Protests, a German Coal Mine Expands’ The Atlantic (11 January 2023) https://w ​ ww.thea​tlan​tic.com/​photo/​2023/​01/​lue​tzer​ath-​prote​sts-g​ er​man-​coal-​mine-​expa​nds/​672​696/​ . The project expansion has led to significant constitutional issues in Germany. See Jakob Hohnerlein, ‘Versammlungsfreiheit in Lützerath: zur Disposition von RWE und Behörden?’ Verfassungsblog (13 January 2023) https://​verf​assu​ngsb​log.de/​versa​mmlu​ngsf​reih​eit-​in-​lutzer​ath-​zur-​disp​osit​ion-​von-​ rwe-​und-​behor​den/​.

198  The Environmental Sustainability Principles This chapter has also shown that environmental sustainability dovetails with the other principles outlined in previous chapters. In particular, the discussion of the circular economy has shown how environmental concerns in the end are embedded in concerns premised in international economic cooperation. This international economic cooperation stands on the back of energy equity. It further supports energy security by removing potential resource shortfalls by extending the life of energy value chain nodes and inputs. Centrally, the circular economy is also consistent with climate demands for a less resource intensive global economy—​meaning that less energy resources would have to be deployed to support it. It is thus possible to integrate the different legal principles governing energy transition. They all function according to a logic of correlative rights that impose a reasonable use, fair distribution, and a prohibition of waste. This logic of correlative rights is at the heart of a development-​based, human-​rights driven transition. The following chapters will highlight how these principles can continue to be integrated with each other to provide equitable, reliable, sustainable, and just energy access following the energy transition.

11

Community and Indigenous Rights Principles I Introduction This chapter complements the concerns raised in Chapter 10, which concerned environmental sustainability of energy transition. This chapter addresses the question of social sustainability of projects central to energy value chains. This chapter addresses two different contexts in which community rights come to the fore. The first is the ordinary case scenario of community engagement. Community members do not benefit from particular protections beyond their membership in community affected by energy projects. Intuitively, the first obligation in this scenario is an obligation of non-​discrimination. This protection secures the default premise of ordinary (as opposed to extra-​ordinary) community relationships. After establishing this baseline premise, community relations require energy companies and governments licensing their activities to protect the basic environmental safety community members. Further, the principle requires the fulfilment of the right to minimum labour standards in connection with the project. Finally, projects must provide a means for community participation in the execution of the project. The challenge becomes more complex when the community affected by an energy project is an indigenous people. The second part of the chapter outlines the additional requirements for community engagement in the context of energy projects affecting indigenous peoples. These governance principles begin with effective consultation, continue with up front consent to a new project, and then address the rights to co-​management and cultural respect following the initial completion of the physical project footprint. The key point of this chapter is that while energy transition is a global policy problem, the work needed for the energy transition is always local somewhere. This work cannot unfairly assign the cost of transition to any one group. The protection of local communities directly affected by energy transition activities, therefore, is a critical component of energy transition governance. This chapter outlines the principles governing this engagement with the communities that actually make energy transition a reality for states and societies around the world.

200  Community and Indigenous Rights Principles

II  Energy Community Governance Principle 1: Non-​discrimination Energy Transition Principle 25

  

States and stakeholders in energy projects, energy value chain inputs, or energy systems must not discriminate, whether directly or indirectly, on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other reason with regard to decisions relating to energy projects, energy systems or energy value chain inputs in question, including with regard to decisions on how to distribute benefits and burdens arising out of or relating to the energy project, energy system or energy value chain input in question.

Projects supporting energy value chains are subject to the basic requirement of governmental non-​discrimination. Human rights treaties protect equally before the law and prohibit ‘discrimination of any kind as to race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status’.1 Non-​discrimination does not prohibit all difference in treatment. Rather, discrimination occurs when a state directly or indirectly impairs the enjoyment of a right by distinguishing between persons on prohibited grounds.2 A state discriminate directly when it treats a similarly situated person differently on the basis of a prohibited ground.3 A state discriminates indirectly when facially neutral laws, policies, and practices disproportionately impact on the enjoyment of rights along prohibited grounds.4 Environmental, social, and governance (ESG) standards adopted by leading energy companies internalize the same non-​discrimination protections. For example, Chevron in its 2021 Sustainability Report states that ‘[i]‌t is our policy that no one should ever be subject to discrimination on the basis of race, religion, color, national origin, age, sex, gender identity, gender expression, genetic information, disability, veteran status, political preference, sexual orientation, membership or non-​membership in any lawful organization, or any other status prohibited by laws or regulations’.5 ExxonMobil reports that it ‘leverage[s] current processes and

1 ICESCR, art 2(2); ICCPR, art 26. 2 Committee on Economic, Social and Cultural Rights, General Comment No 20, Non-​ Discrimination in Economic, Social, and Cultural Rights (art 2, para 2 of the International Covenant on Economic, Social, and Cultural Rights) UN Doc E/​C.12/​GC/​20 (2 July 2009) para 7. 3 ibid 10(a). 4 ibid 10(b). 5 Chevron, 2021 Corporate Sustainability Report at 39 https://​www.chev​ron.com/​-​/​media/​sha​red-​ media/​docume​nts/​chev​ron-​sus​tain​abil​ity-​rep​ort-​2021.pdf.

Energy Community Governance Principle 2  201 systems to assess our direct suppliers for potential human rights risk in the supply chain’, including violation of the prohibition against discrimination.6 Form agreements relevant to energy value chains such as the International Bar Association’s Model Mining Development Agreement include similar contractual obligations. Specially, mining companies may not discriminate against workers on the basis of gender and obligate themselves by contract to respect workers’ participatory rights on decision-​making processes affecting them without discrimination.7 Key international performance standards such as the International Finance Corporate (IFC) Performance Standards obligate companies subject to them not to discriminate. IFC Performance Standard 1 implicitly requires an assessment of a discriminatory human rights impact of a project subject to the performance standard.8 IFC Performance Standard 2 expressly incorporates such employment-​ based non-​discrimination requirements.9 IFC Performance Standards are applicable as IFC-​supported projects. They are also made applicable by mining contracts and other energy contracts by incorporation.10

III  Energy Community Governance Principle 2: Environmental Protection Energy Transition Principle 26

(1) States and stakeholders in energy projects, energy value chain inputs, or energy systems must protect the environment consistent with the law of the host state to the energy project, energy value chain input, or energy system and international best practice in the energy and extractive resources industries. (2) States and stakeholders may enter into such agreements on environmental protection standards governing energy projects, energy value chain inputs or energy systems, as well as cost-​sharing mechanisms with regard to such standards, within the limits permitted by international law.   

6 ExxonMobil, Sustainability Report (December 2022) 63 https://​corpor​ate.exx​onmo​bil.com/​-​/​ media/​glo​bal/​files/​sus​tain​abil​ity-​rep​ort/​publ​icat​ion/​exx​onmo​bil-​sus​tain​abil​ity-​rep​ort.pdf. 7 Peter Leon and others, Model Mine Development Agreement, International Bar Association (4 April 2011) 15.3. 8 IFC Guidance Note 1, Assessment and Management of Environmental and Social Risk Impacts (updated 14 June 2021) GN46; see also Guiding Principles on Business and Human Rights, Office of the United Nations High Commissioner on Human Rights (2011) UN Doc HR/​PUB/​11/​04, 1. 9 IFC Performance Standard 2, Labour and Working Conditions (1 January 2012) 12. 10 See eg Leon and others (n 7) 10.2; Mining Concession (Iron) (Guinea—​SMFG—​EURONIMBA) (5 September 2019) 23.

202  Community and Indigenous Rights Principles Energy value chain projects must protect the environment at the project site. In the first instance, environmental protection is a matter of project host state law.11 Most states have environmental protection standards that apply to extractive activity or other large projects.12 This environmental law is applicable to energy projects by default as a matter of a state’s regulatory authority. The state may contractually provide preferential treatment to mining and energy companies with regard to its environmental permitting requirements.13 The state further may agree to assume economic responsibility for future environmental burdens created by a project.14 The state’s ability to enter into such agreements is limited by international law.15 States cannot enter into such agreements to the extent that doing so violates their international legal obligations (including their human rights obligations.)16 Consent to environmental degradation could impair the enjoyment of such existing rights. Despite these limitations, a state may agree to assume the costs of environmental compliance without imposing such environmental degradation. ESG policies frequently internalize the same principles. Energy companies like ConocoPhillips recognize the importance of the protection of biodiversity at the project site and beyond and include environmental protection in global, international corporate risk management processes.17 Similarly, Shell ‘announced a

11 Eloise Scotford, ‘Environmental Principles Across Jurisdictions: Legal Connectors and Catalysts’ in Emma Lees and Jorge Viñuales (eds), The Oxford Handbook of Comparative Environmental Law (OUP 2019) 654. 12 Peter D Cameron, International Energy Investment Law: The Pursuit of Stability (2nd edn, OUP 2021) 568. 13 Peter D Cameron, ‘Reflections on Sovereignty Over Natural Resources and the Enforcement of Stabilization Clauses’ (2013) Yearbook on Intl Investment Law and Policy 2011–​2012 311. 14 ibid. 15 See Michael Reisman and Mahnoush Arsanjiani, ‘The Question of Unilateral Governmental Statements as Applicable Law in Investment Disputes’ in PM Dupuy and others (eds), Völkerrecht als Wertordnung: Common Values in International Law, Festschrift für/​Essays in Honour of Christian Tomuschat.NP Engel 2006) 409. 16 Ursula Kriebaum and others, Principles of International Investment Law (3rd edn, OUP 2022) 129 (‘Concerning the scope of stabilization clauses States have to be mindful not to compromise other international obligations stemming from areas such as human rights, labour law or environmental law’). Stabilization agreements are consistent with state sovereignty as the state is free to bind itself. ibid. To the extent that a state has committed itself internationally to the performance of human rights obligations, it is no longer free to enter into inconsistent obligations with a foreign company. Its freedom of contract is constrained by the existing treaty obligation. As states have significant latitude how to fulfil human rights obligations, this still leaves the state considerable latitude in contracting. See also UN General Assembly Resolution 76/​300 ‘The Human Right to a Clean, Healthy and Sustainable Environment’ (1 August 2022) UN Doc A/​Res/​76/​300; Human Rights Council, Resolution on the Human Right to a Clean, Healthy and Sustainable Environment (18 October 2021) UN Doc A/​HRC/​Res/​48/​13. See also Malgosia Fitzmaurice, ‘Interpretation of Human Rights Treaties’ in Dinah Shelton (ed), The Oxford Handbook of International Human Rights Law (OUP 2013) 739, 762–​63 (discussing the implication of a right to a clean environment in existing treaties). 17 ConocoPhillips, 2021 Sustainability Report at 101–​102, https://​sta​tic.con​ocop​hill​ips.com/​files/​ resour​ces/​con​ocop​hill​ips-​2021-​sus​tain​abil​ity-​rep​ort.pdf.

Energy Community Governance Principle 3  203 new ambition to have a positive impact on biodiversity’.18 Shell executes this commitment by means of a ‘mitigation hierarchy, a decision-​making framework that involves a sequence of four key actions: avoid, minimise, restore and offset’ and includes biodiversity in its internal assessment process.19 Project documents frequently bind companies to such environmental protection obligations.20 Key IFC performance standards similarly incorporate corporate obligations to protect the environment. Companies must conduct environmental impact assessments.21 These assessments must include ‘direct and indirect project-​related impacts on biodiversity’.22 Companies must also conduct supply chain diligence to protect biodiversity.23 Finally, companies must go beyond diligence affirmatively to ‘avoid the release of pollutants or, where avoidance is not feasible, minimize and/​ or control the intensity and mass of flow of their release’.24

IV  Energy Community Governance Principle 3: Minimum Labour Standards Energy Transition Principle 27

  

States must safeguard and stakeholders in energy projects, energy value chain inputs, or energy systems must provide at least minimum labour standards, including fair wages to support a decent living, safe and healthy work conditions, an equal opportunity for promotion; and rest, leisure, and a reasonable limitation on working hours.

Projects supporting the energy value chain are subject to the requirement of guaranteeing minimum project labour standards. The right to minimum labour standards is one aspect of the right to work.25 The ICESCR provides that such minimum standards requires ‘fair wages’ to support ‘a decent living’,26 as well as ‘safe and healthy working conditions’,27 an ‘[e]‌qual opportunity’ for promotion,28 as well as

18 Shell, Protecting Biodiversity, 2021 Online Sustainability Report, https://​repo​rts.shell.com/​sus​tain​ abil​ity-​rep​ort/​2021/​res​pect​ing-​nat​ure/​pro​tect​ing-​biodi​vers​ity.html. 19 ibid. 20 Leon and others (n 7) 22.1, 22.3.4(b). 21 IFC Performance Standard 1, Assessment and Management of Environmental and Social Risks and Impacts (1 January 2012) 7, 17–​19. 22 IFC Performance Standard 6, Biodiversity Conversation and Sustainable Management of Living Natural Resources (1 January 2012) 6. 23 ibid 30. 24 IFC Performance Standard 3, Resource Efficiency and Pollution Prevention (1 January 2012) 10. 25 See ICESCR, art 6(2). 26 ibid art 7(a). 27 ibid art 7(b). 28 ibid art 7(c).

204  Community and Indigenous Rights Principles ‘[r]est, leisure and reasonable limitation of working hours’.29 As General Comment No. 23 makes clear ‘remuneration must be sufficient to enable the worker and his or her family to enjoy other rights in the Covenant such as social security, health care, education and an adequate standard of living’.30 The Comment further highlights the significance of regulation to prevent occupational accidents.31 The right to minimum labour standards is further codified in more detail in a reasonably large number of treaties concluded under the auspices of the International Labour Organization.32 Many ESG policies have adopted the same principles. For example, BP reports that ‘our human rights policy, updated in 2020 in consultation with external organizations, aligns with the UN Guiding Principles on Business and Human Rights’.33 BP notes further that its internal policy ‘is underpinned by the International Bill of Rights and the International Labour Organization’s Declaration of Fundamental Principles at Work, including their Core Conventions’.34 Similarly, TotalEnergies reports that it ‘is committed to respecting internationally recognized human rights wherever it operates, especially . . . the fundamental Conventions of the International Labor Organization (ILO), the UN Guiding Principles on Business and Human Rights, the OECD Guidelines for Multinational Enterprises and the Voluntary Principles on Security and Human Rights’.35 The same principles are frequently included in project documents.36 IFC performance standards similarly protect minimum labour standards. IFC Performance Standard No. 2 requires that companies ‘will provide reasonable working conditions and terms of employment’.37 It addresses migrant worker rights, entitling them to ‘substantially equivalent terms and conditions to non-​ migrant workers carrying out similar work’.38 It requires companies to respect the right of workers to organize and, if such worker organizations are restricted under national law, to allow workers to develop reasonable alternatives.39 It further provides significant worker safety backstops.40 IFC Performance Standard 2 further

29 ibid art 7(d). 30 General Comment No 23 on the Right to Just and Favourable Conditions of Work (Article 7 of the International Covenant on Economic, Social, and Cultural Rights) UN Doc E/​C.12/​GC/​23 (27 April 2016) 18. 31 ibid 25. 32 For a list of the most relevant convention see ibid fn 2. 33 BP, 2021 Sustainability Report, 16, https://​www.bp.com/​cont​ent/​dam/​bp/​busin​ess-​sites/​en/​glo​ bal/​corpor​ate/​pdfs/​sus​tain​abil​ity/​group-​repo​rts/​bp-​sus​tain​abil​ity-​rep​ort-​2021.pdf. 34 ibid. 35 TotalEnergies, 2021 Universal Registration Document including Annual Financial Report, 26–​27, https://​totale​nerg​ies.com/​sites/​g/​files/​nytnzq​121/​files/​docume​nts/​2022-​05/​TotalEner​gies​_​URD​_​202​ 1_​EN​_​acc​essi​ble.pdf. 36 See Leon and others (n 7) 24 and examples, 22.3.4(b). 37 IFC Performance Standard 2 (n 9) 10. 38 ibid 11. 39 ibid 13. 40 ibid 23.

Community Governance Principle 4/Development Principle 5  205 expressly provides that companies ‘will not employ forced labor, which consists of any work or service not voluntarily performed that is exacted from an individual under threat of force or penalty’.41

V  Community Governance Principle 4/​Development Principle 5: Participation Energy Transition Principle 28

  

States and stakeholder in energy projects, energy value chain inputs, or energy systems must allow for active, free, and meaningful participation in decision-​ making relating to the energy projects, energy value chain inputs, or energy systems by all stakeholders and all persons affected by the energy project, energy value chain input, or energy system.

Energy value chain projects must permit the local community affected by the project to participate meaningfully in project decision-​making. The right to participate in decision-​making is protected by the ICESCR and the Draft Convention on the Right to Development. General Comment No. 24 highlights that participation is important in any large-​scale project setting.42 The right to participate further has particular added significance when a state privatizes essential goods and services as privatization takes these goods and services outside ordinary policymaking.43 This concern is particularly important in the electricity context.44 The Draft Convention on the Right to Development elevates the importance of participation. Its first general principle provides that ‘the human person and peoples are central subjects of development and must be active participants and beneficiaries of the right to development’.45 The core definition of the right to development twice highlights the right to ‘active, free and meaningful participation’ and does so once in the context of economic development.46 This focus on participation in decision-​making in the Draft Convention is fundamentally consistent with a view that to flourish, human beings must be able to be active members in their respective societies and economies.47 41 ibid 22, 24, 27. 42 ibid 59. 43 General Comment No 24 on State Obligations under the International Covenant on Economic, Social and Cultural Rights in the Context of Business Activities, UN Doc E/​C.12/​GC/​24 (10 August 2017) 22. 44 ibid 21. 45 Draft Convention on the Right to Development (Draft 2), art 3(a). 46 ibid art 4(1)–​(2). 47 Martha Nussbaum develops the point in Martha Nussbaum, Creating Capabilities: The Human Development Approach (HUP 2011). One might be tempted to read the participatory component of human capabilities as purely political in nature (the only economic right mentioned outright is the right

206  Community and Indigenous Rights Principles ESG policies incorporate participation in corporate decision-​making. For example, ConocoPhillips reports that its social performance guidance begins with community engagement. ConocoPhillips stakeholder engagement principles are to (i) ‘proactively identify and seek out stakeholders’, (ii) ‘include stakeholders in the design and implementation of the engagement process’, (iii) ‘listen to understand stakeholders’ interests, concerns and culture’, (iv) ‘communicate openly’, (v) ‘seek solutions that create mutually beneficial relationships and build long-​ term value for both the company and our stakeholders’, and (vi) ‘follow through on our commitments and stand accountable for the results, both internally and externally’.48 Similarly, ExxonMobil reports that it ‘consult[s]‌with local groups and individuals regularly and seek[s] to have [its] stakeholders effectively represented as community concerns are discussed and decisions are made’.49 This ‘engagement process is tailored to local communities to help provide effective, accessible, and culturally appropriate channels for exchanging information and proactively identifying issues and concerns’.50 The obligation to consult is frequently part of project documents.51 Key IFC performance standards similarly require companies to consult affected communities.52 IFC Performance Standard 1 requires companies to enter into a dialogue with affected communities53 and specifies that consultation must (i) begin early, (ii) follow meaningful and accessible disclosure of relevant information, (iii) focus on directly affected communities, (iv) not subject participants to undue influence, (v) ‘enable meaningful participation’ and (vi) ‘be documented’.54 To the extent that potentially adverse impacts are significant, companies further must also ‘conduct an Informed Consultation and Participation process’.55 This process ‘involves a more in-​depth exchange of views and information, and an organized and iterative consultation, leading to the [company’s] incorporating into to hold property). Such a reading may impose an unfairly modern reading on the work of a theorist who is, before all else, a classicist. In a classical setting, the political stage of the agora or forum was not just a political place of participation but—​quite literally—​the marketplace. For a Roman republican (and thus similarly stoically inspired) conception that is more encompassing of economic decision-​making see Philip Pettit, Republicanism: A Theory of Freedom and Government (OUP 1997); see also JGA Pocock, The Machiavellian Moment: Florentine Political Thought and the Atlantic Republican Tradition (PUP 1975). For an Aristotelian version of a similar point see Alasdair McIntyre, After Virtue: A Study in Moral Theory (Duckworth 1987). 48 ConocoPhillips, 2021 Sustainability Report at 120, https://​sta​tic.con​ocop​hill​ips.com/​files/​resour​ ces/​con​ocop​hill​ips-​2021-​sus​tain​abil​ity-​rep​ort.pdf. 49 ExxonMobil, Sustainability Report (December 2022) 51, https://​corpor​ate.exx​onmo​bil.com/​-​/​ media/​glo​bal/​files/​sus​tain​abil​ity-​rep​ort/​publ​icat​ion/​exx​onmo​bil-​sus​tain​abil​ity-​rep​ort.pdf. 50 ibid. 51 Leon and others (n 7) 24 and examples, 22.1. 52 IFC Performance Standard 1, Assessment and Management of Environmental and Social Risks (1 January 2012) 25. 53 ibid 30. 54 ibid. 55 ibid 31.

Indigenous Rights Principle 1  207 their decision-​making process the views of the Affected Communities on matter that affect them directly’.56

VI  Indigenous Rights Principle 1: Consultation Energy Transition Principle 29 (1) States and stakeholder in energy projects, energy value chain inputs, or energy systems must consult indigenous peoples to the extent that such energy projects, energy chain inputs or energy systems threatens to impair or affect the economic, social, or cultural life of an indigenous people. (2) States and stakeholders must consult indigenous peoples in good faith, in a manner appropriate to the indigenous people, and with the goal of achieving meaningful agreement or consent to a proposed measure.   

Projects supporting the energy value chain must honour additional obligations when these projects affect indigenous peoples. The first of these additional obligations is an obligation to consult indigenous peoples. As discussed in this section, the obligation to consult goes further than an obligation to foster participation outlined in Energy Community Governance Principle 4. The requirements discussed in the following sections add to the energy community governance principles discussed so far. Indigenous peoples are also an affected community. However, they are a special kind of affected community—​because of its particular relationship to the land and specific history of marginalization by imperial and colonial forces. This means that indigenous peoples are entitled to the protections outlined so far. They also require specific protections to take into account the specific situation of their economic, social, and cultural rights. This leads to a threshold question—​when must one apply the additional layers of protection of indigenous rights? Formally, there is no single, consistent agreed upon definition of the term.57 The UN Declaration on the Rights of Indigenous Peoples provides an indirect definition of indigenous peoples (indirect, because it is formulated as a right to ‘maintain and strengthen’ as opposed to an outright definition). This definition suggests that indigenous peoples have ‘distinct political, legal, economic, social and cultural institutions’, while also forming part of the

56 ibid. 57 Joshua Catellino and Cathal Doyle, ‘Who Are ‘Indigenous Peoples?’ An Examination of Concepts Concerning Group Membership in the UNDRIP’ in Jessie Hoffmann and Marc Weiler (eds), The UN Declaration on the Rights of Indigenous Peoples: A Commentary (OUP 2018) 7.

208  Community and Indigenous Rights Principles ‘political, economic, social and cultural life of the State’.58 Further, again by way of indirect definition, indigenous peoples have ‘an indigenous community or nation’ that has independent ‘traditions and customs’, as well as independent ‘cultural traditions’.59 Finally, and again by way of indirect definition, indigenous peoples have independent ‘histories, languages, oral traditions, philosophies, writing systems and literatures’.60 One must certainly view these points to exist in the alternative—​ that is, an indigenous people need not necessarily have an independent writing system to qualify as indigenous. The definitional hints here are factors rather than elements of what constitutes an indigenous people. By contrast, International Labor Organization Convention No. 169 defines indigenous people as peoples living in independent countries. In addition to being a people in an independent country, what sets an indigenous people apart is that it is either: (a) (i) tribal, (ii) socially, culturally, and economically distinct from the remainder of the national community, and (iii) at least partially regulated by its own customs, traditions, or laws; or (b) indigenous in the sense of having previously lived in the relevant place before conquest or colonialization or the establishment of present state boundaries.61 Further, the indigenous people must self-​identify as tribal or indigenous.62 These definitional issues in some sense attempt to apply a formalism that is alien to the underlying aim of the protections to be extended. The leading definitional statements are in some sense negative—​they distinguish an indigenous people from a society and state. It thus assumes that a people derives its status as ‘indigenous’ from the act of someone else’s colonialization. If the point is to protect the equal dignity of the people in question as well as its members, a statement that makes historical subjugation a definitional requirement is to re-​perpetrate the wrong to be remedied. To deny a group the status of indigenous people because it does not meet an ex post definitional statement should therefore be seen as functionally questionable. The very definitional question therefore is going to be highly fact-​specific and should not be made by reference to purely formal characterizations. When a project directly affects an indigenous people, its first right is one of consultation.63 The obligation of consultation is an obligation of non-​discrimination. That is, indigenous peoples must be allowed to participate on a functionally equally footing in the participatory mechanisms outlined in Energy Community 58 UN General Assembly Resolution 61/​295, ‘Declaration on the Rights of Indigenous Peoples’ UN Doc A/​Res/​91/​295 (13 September 2007) art 5. 59 ibid arts 9, 11(1). 60 ibid art 13(1). 61 ILO Convention No 169, art 1. 62 ibid. 63 International Court of Human Rights, Saramaka People v. Suriname, judgment (28 November 2007). For a discussion of Saramaka and the link between consultation and obtaining free, prior, and informed consent see John H Knox, ‘Climate Change and Human Rights Law’ (2009) 50 VJIL 163, 187–​88.

Indigenous Rights Principle 1  209 Governance Principle 4.64 Further, consultation must involve and respect the representative institutions of the people in question.65 The obligation of consultation goes further than the obligation of participation. Thus, ‘consultations carried out in application of this Convention shall be undertaken, in good faith and in a form appropriate to the circumstances, with the objective of achieving agreement or consent to the proposed measures’.66 This goes further than an obligation to permit participation. Participation constitutes an obligation to allow a person to make a meaningful contribution. It does not require a good faith effort to come to agreement.67 Consultation therefore requires more than that a point be taken into account in decision-​making. It requires robust legislative and regulatory frameworks to engage indigenous communities.68 Decision-​ making further must actively seek to arrive at a point acceptable to the indigenous people to the extent this is at all possible.69 ESG policies of leading energy companies incorporate similar commitments. For example, Shell has expressed its support for the UN Declaration on the Rights of Indigenous Peoples.70 It further has instituted ‘mutually agreed, transparent and culturally appropriate consultation and impact management processes’ to arrive at an acceptable point of agreement with indigenous peoples.71 Similarly, Enbridge (North America’s leading pipeline company) ‘is deeply committed to advancing reconciliation with Indigenous peoples’.72 Enbridge’s internal policy continues that ‘[c]‌onsistent with Enbridge’s respect for the right of Indigenous peoples, we engage early and sincerely through processes that aim to achieve the support and agreement of Indigenous nations and governments for our projects and operations that may occur on their traditional lands’.73 64 ILO Convention No 169, art 6(1)(b); see also UNDRIP, art 19. 65 ILO Convention No 169, art 6(1)(a); see also UNDRIP, art 19. 66 ILO Convention No 169, art 6(2); see also UNDRIP, art 19. 67 Draft Convention on the Right to Development (April 2022), arts 3(a), 4. 68 Inter-​American Court of Human Rights, Kichwa Indigenous People of Sarayaku v Ecuador (Merits and Reparations) (27 June 2012) (applying the Inter-​American Convention). For a discussion of Sarayaku see Guillermo Garcia Sanchez, ‘When Drills and Pipelines Cross Indigenous Lands in the Americas’ (2021) 51 Seton Hall LR 1121, 1161–​66. 69 ILO Convention No 169, art 6(2); see also UNDRIP, art 19; Inter-​American Court of Human Rights, Punta Piedra Garifuna Community and its Members v. Honduras (Judgment) (5 October 2015) (applying the Inter-​American Convention); for a framework discussion of indigenous rights under the Inter-​American Convention preceding Punta Piedra see Dinah Shelton, ‘The Inter-​American Human Rights Law of Indigenous Peoples’ (2013) 35 University of Hawaii LR 937; for a discussion of indigenous rights in the jurisprudence of the Inter-​American Court of Human Rights from a mining perspective see Jaime Zaldumbide and Ricardo Velasco, ‘Regulatory Developments and Managing Environmental Compliance’ Lexology (2021). 70 Shell, Working With Communities https://​www.shell.com/​sus​tain​abil​ity/​comm​unit​ies/​work​ing-​ with-​comm​unit​ies.html. 71 ibid. 72 Enbridge Inc, ‘Indigenous Peoples Policy’ (August 2022) https://​www.enbri​dge.com/​-​/​media/​ Enb/​Docume​nts/​About-​Us/​indi​geno​us_​p​eopl​es_​p​olic​y_​fi​nal.pdf?rev=​839a8​8ff9​6574​65aa​0b03​9d13​ 9d98​166&hash=​B98D0​8567​204E​4E24​68FA​166E​F955​E88. 73 ibid.

210  Community and Indigenous Rights Principles Form agreements relevant to energy value chains such as the International Bar Association’s Model Mining Development Agreement operationalizes the conventional principles as contractual obligations. Mining companies operating under the International Bar Association’s Model Mining Development Agreement commit to consultations with indigenous peoples in accordance with international guidelines.74 It requires ‘an open, inclusive, and non-​coercive process, conducted in the native language of the participants’.75 Key IFC performance standards similarly incorporate corporate obligations to consult indigenous peoples. IFC Performance Standard 7 requires that indigenous peoples be involved in participation mechanisms,76 and recognizes the vulnerability of indigenous peoples expressly.77 Due to this vulnerability it imposes additional requirements in core circumstances to consult in order to reach agreement with indigenous peoples.78 This formulation in IFC Performance Standard 7 is arguably weaker than the formulation in ILO Convention No. 169 discussed above. The standard only treats indigenous peoples as separate and distinct from general participation requirements in limited circumstances. ILO Convention No. 169 does not make a similar express distinction in its consultation requirements.

VII  Indigenous Rights Principle 2: Free, Prior, and Informed Consent (FPIC) Energy Transition Principle 30

(1) States and stakeholder in energy projects, energy value chain inputs, or energy systems must obtain the free, prior, and informed consent of indigenous peoples (FPIC) when projects are situated on or significantly affect lands or waters traditionally owned or customarily used by an indigenous people. (2) States and stakeholder in energy projects, energy value chain inputs, or energy systems must obtain the free, prior, and informed consent of indigenous peoples (FPIC) when projects interfere with the manifestations of the cultures of indigenous peoples including archaeological or historical sites, artefacts, designs, ceremonies, technologies and visual and performing arts and literature. (3) FPIC does not provide an absolute and unqualified right to veto to an indigenous people or to a minority within an indigenous people.







74

Leon and others (n 7) 18, ‘consultations’.

75 ibid. 76

IFC Performance Standard 7, Indigenous Peoples (1 January 2012) 10. ibid 11. 78 ibid. 77

Indigenous Rights Principle 2  211

  

(a) The more significant the impairment of indigenous peoples’ rights, the greater the qualitative and quantitative burden is on the state and other project sponsors to show that the indigenous people were meaningfully consulted and their opinions and concerns were incorporated and addressed by the state. (b) A state or other project stakeholder having to meet a lower burden is not discharged from proving that it obtained consent.

Projects supporting the energy value chain must obtain the free, prior, and informed consent (FPIC) of indigenous peoples when projects are situated on or significantly affect lands or waters traditionally owned or customarily used by an indigenous people. Again, energy projects are not unique in this respect. What makes energy projects unique is that energy projects have significant impacts on the local community. It therefore provides an important example of this broader obligation of companies to permit local participation in significant projects. The requirement to obtain FPIC is codified in ILO Convention No. 169 and is recognized in the UN Declaration on the Rights of Indigenous Peoples. ILO Convention No. 169 prohibits the removal of peoples from the lands they occupy without their free and informed consent.79 In addition, the consultation requirements discussed in the context of Indigenous Rights Principle 1 must be carried out ‘with the objective of achieving agreement or consent to the proposed measures’.80 Such non-​related measures therefore are subject to a consent requirement, albeit a significantly weaker one. The UN Declaration on the Rights of Indigenous Peoples similarly places FPIC in the context of land and territory. Like ILO Convention No. 169, it requires that ‘[n]‌o relocation shall take place without the free, prior, and informed consent of the indigenous peoples concerned and after agreement on just and fair compensation and, where possible, with the option to return’.81 Further, like ILO Convention No. 169, the UN Declaration on the Rights of Indigenous Peoples links the consultation requirement to FPIC, making the link if anything more express by requiring that ‘[s]tates shall consult and cooperate in good faith with the indigenous peoples concerned through their own representative institutions in order to obtain their free, prior, and informed consent before adopting and implementing legislative or administrative measures that may affect them’.82 This obligation to consult indigenous peoples ‘in order to obtain [the] free and informed consent prior to the



79

ILO Convention No 169, art 16. ibid art 6(2). 81 UNDRIP, art 10. 82 ibid art 19. 80

212  Community and Indigenous Rights Principles approval of any project affecting their lands or territory and other resources’ is tied particularly to ‘the development, utilization or exploitation of mineral, water or other resources’.83 In addition, the UN Declaration on the Rights of Indigenous Peoples makes clear that FPIC requirements apply to the storage or disposal of hazardous materials.84 Perhaps more importantly, the requirements of FPIC apply by implication to any interference with the manifestations of the cultures of indigenous peoples ‘such as archaeological and historical sites, artefacts, designs, ceremonies technologies and visual and performing arts and literature’.85 This protection extends FPIC requirements outside of the place currently inhabited by the indigenous people, and covers not only material objects or sites but also intangible assets. The concept of FPIC is ‘a fundamental component of Indigenous self-​ determination’.86 It requires that consultations ‘should be conducted in the absence of an any type of coercion and pressure’.87 It must take place meaningfully before significant steps are taken to approve a project.88 Finally, indigenous peoples must be fully informed of the risks a project entails.89 The question of consent has vexed the discussion of FPIC. It does not neatly fall into an obligation of conduct (provide an opportunity to participate) or an obligation of result (achieve agreement). Instead, ‘while FPIC should not be read as conferring an overreaching right to veto on Indigenous peoples, it should nevertheless be interpreted in such a way that guarantees the effective protection of Indigenous peoples’ fundamental rights’.90 Some courts like the Inter-​American Court on Human Rights used a kind of ‘sliding scale’ view of FPIC and ‘endorsed the view that under certain circumstances, namely when a project is likely to cause profound social and economic changes in the territories and lives of the Indigenous peoples concerned, the latter should be entitled to a more rigorous protection’.91 This view seems to verge on the majority of the meaning of ‘consent’ requirements in FPIC.92 83 ibid art 32(2). 84 ibid art 29(2). 85 ibid art 11. 86 Mauro Barelli, ‘Free, Prior, and Informed Consent in the UNDRIP: Articles 10, 19, 29(2), and 32(2)’ in Jessie Hohmann and Marc Weller (eds), The UN Declaration on the Rights of Indigenous Peoples: A Commentary (OUP 2018) 247, 248. 87 ibid 250. 88 ibid. 89 ibid 251. 90 ibid 254. 91 ibid 258 (discussing IACtHR, Case of the Yakye Axa Indigenous Community v Paraguay, Judgment of 17 June 2005 (Merits, Reparations, and Costs); IACtHR, Sawhoyamaxa Indigenous Community v Paraguay, Judgment of 29 March 2006 (Merits, Reparations, and Costs); and IACtHR, Case of the Saramaka People v Suriname, Judgment of 28 November 2007 (Judgment on Preliminary Objections, Merits, Reparations, and Costs)). 92 ibid; see also Cathal Doyle, ‘Free Prior and Informed Consent and Indigenous Rights: A Bulwark Against Discrimination and Platform for Self-​determination’ in Dwight Newman (ed), Research Handbook on the International Law of Indigenous Rights (Edward Elgar Publishing 2022) 96, 110 (discussing the jurisprudence).

Indigenous Rights Principle 2  213 Leading corporate standards in the FPIC follow the IFC Performance Standard Similarly, the IBA Model Mine Development Agreement incorporate IFC Performance Standard 7 by reference. The standard confirms the broad outline of the international indigenous rights discussion above. Thus, ‘FPIC builds on and expands the process of [informed consultation and participation] described in Performance Standard 1 and will be established through good faith negotiation between the client and the Affected Communities of Indigenous Peoples’.94 FPIC thus is an additional step to the general participation and consultation requirement. FPIC under IFC performance standards follows a sliding scale approach. It highlights several areas in which FPIC is absolutely required. Thus, it distinguishes between projects located on indigenous lands and projects requiring relocation. With regard to relocation, it requires FPIC in the sense of ‘evidence of agreement between the parties as the outcome of the negotiations’.95 Further, to the extent that a project may unavoidably and ‘significantly impact on critical cultural heritage that is essential to the identity and/​or cultural, ceremonial or spiritual aspects of Indigenous Peoples lives’, or proposes ‘to use the cultural heritage including knowledge, innovations, or practices of Indigenous Peoples’, the company similarly is required to obtain FPIC.96 With regard to projects merely located on indigenous lands, IFC Performance Standard 7 requires less than FPIC for locating the project on indigenous lands. In addition to appropriate due diligence and document, IFC Performance Standard 7 requires companies to ‘[o]‌ffer Affected Communities of Indigenous Peoples compensation and due process in the case of commercial development of their land and natural resources’ in lieu of consent.97 For purposes of IFC Performance Standard 7, ‘FPIC comprises a process and an outcome’.98 The process element requires good faith negotiation.99 The ‘outcome, where the [good faith negotiation] process is successful, is an agreement and evidence thereof ’.100 An obligation to obtain FPIC therefore is both an obligation of conduct (good faith negotiations) and an obligation of result (evidence of successful agreement). The obligation of result is somewhat vaguely stated. That is, according to the Guidance Note to IFC Performance Standard 7, ‘FPIC process and outcome do not require unanimous support from all members of Affected Communities of Indigenous Peoples’. Rather, it merely requires proof of ‘collective ‘community consent’. The Guidance Note does not provide a minimum threshold to establish 7.93



93

See Rio Tinto, ‘Board Review of Cultural Heritage Management’ (23 August 2020). IFC Performance Standard 7 (n 76) ¶ 12, 95 ibid 12, 15. As discussed above, the agreement does not need to be unanimous. 96 ibid 16, 17. 97 ibid 14. 98 IFC Guidance Note 7, Indigenous Peoples (1 January 2012) GN25. 99 ibid. 100 ibid. 94

214  Community and Indigenous Rights Principles such a community consent, allowing for potentially under-​representative means of establishing such consent.101 FPIC requirements therefore are at once a powerful means to protect community interests of indigenous communities and a comparatively weaker means of securing their right to self-​determination. FPIC sits at an uneasy intersection between recognition of sovereignty in indigenous peoples and a subsummation of indigenous peoples into a community group in national society. One way of reconciling both positions is to focus on the particular nature of participation in the context of an indigenous people. As discussed above in the context of participation, the point of participation is that the ability of a person to be part of decision-​making on economic, social, and cultural matters is central to their ability to exist and flourish. Indigenous peoples share a common experience of marginalization. They have been subjected to arbitrary decisions by a national society (however intentioned it might have been) that imposes those decision from an external point of view of an alien culture. Such decisions by a national society undercuts the ability of all members of the affected group to participate in economic, social and cultural life on a footing of equality. As such, it undercuts the ability of those members to participate, at all. From this perspective, FPIC is required to act as a safeguard for the right to participate and the dignity of members of the indigenous people. Without FPIC, these members of society would be cut off from a basic condition for human flourishing on the basis of their cultural belonging. Such a result cannot be reconciled with the most fundamental tenets of modern human rights law. Viewed in this light, it is not necessary to resolve the thorny issue of self-​ determination inherent in the FPIC concept. It is possible to propose a less far reaching and yet more universalizable account of FPIC. This account sees FPIC as a precondition for the human good of members of an indigenous people not as grounded in what distinguishes indigenous peoples from the rest of society but rather in what unites them with all other members of society: the basic need to be fully and seriously heard as an equal. As thin as the FPIC concept in IFC Performance Standard 7 may appear, it is capable of supporting this fundamental goal.

VIII  Indigenous Rights Principle 3: Co-​Management Energy Transition Principle 31 States and stakeholders in energy projects, energy value chain inputs, and energy systems must continue to consult with indigenous peoples after the initial

101 The later discussion in the guidance note does not otherwise provide stronger procedural safeguards in this context.

Indigenous Rights Principle 4  215

  

approval of the project for the life of the project, applying the other relevant Energy Transition Principles mutatis mutandis.

Projects supporting the energy value chain must provide a means to allow indigenous peoples to continue to be consulted in central decisions about the project after its authorization. One of the objectives of the consultation obligations is to ‘establish and maintain an ongoing relationship based on Informed Consultation and Participation (ICP) with the Indigenous Peoples affected by a project throughout the project’s life-​cycle’.102 This objective is achieved in projects documents like the Model Mine Development Agreement by requiring both host state and energy companies to keep ‘Indigenous or Tribal Populations regularly informed about activities under this Agreement and Consult with them regularly about activities or planned activities under this Agreement’.103 The principles of consultation and FPIC do not end when project approval has been granted. Rather, the process of engaging indigenous peoples is iterative and ongoing during the life of a project.104 This is the case both in order to avoid, and if necessary, resolve disputes.105 It is also the case in order to safeguard an appropriate level of control in indigenous peoples over their traditional rights. In practical terms, this means that indigenous peoples will have an ability to co-​ manage a project with regard to important decision points to a certain degree. This right of co-​management is continuation of the logic inherent in the consultation and FPIC principles discussed above.

IX  Indigenous Rights Principle 4: Cultural Respect Energy Transition Principle 32   

At all times, states and stakeholders in energy projects, energy value chain inputs, and energy systems must respect the culture of indigenous peoples.

At all times, projects supporting the energy value chain must respect the culture of indigenous peoples. This obligation of cultural respect is codified in the relevant international indigenous rights instruments discussed so far. For example, the UN Declaration on the Rights of Indigenous Peoples provides that states must grant legal recognition to indigenous lands, territories, and resources. It explains that



102

IFC Performance Standard 7 (n 76) objectives. Leon and others (n 7) 18.0(b). 104 IFC Guidance Note 7, Indigenous Peoples (1 January 2012) GN41. 105 ibid 21. 103

216  Community and Indigenous Rights Principles ‘[s]‌uch recognition shall be conducted with due respect to the customs, traditions and land tenure systems of the indigenous peoples concerned’.106 Similarly, ILO Convention No. 169 requires that its application, ‘the integrity of the values, practices, and institutions of [indigenous peoples] shall be respected’.107 The same point is an express objective of IFC Performance Standard 7 discussed at length above. That is, the objective of IFC Performance Standard 7 is to ‘respect and preserve the culture, knowledge, and practices of Indigenous Peoples’.108 This principle of cultural respect importantly informs the duty of good faith consultation requirements discussed above. Good faith traditionally requires honesty and commercial reasonableness. These requirements support a broader view of good faith as meaningful other regard.109 This understanding of good faith is given an even stronger foothold when a party is expressly required to respective and preserve a culture that is facially and obviously different from its own. Good faith in this context requires a deep involvement with the cultural institutions. It requires one to gain an understanding of these institutions as part of the process of engagement with an indigenous people. It also requires one to yield to the value system one encounters in the process (as opposed to insisting on one’s own value system in its stead). The requirement of cultural respect is a fundamental precondition for the treatment of indigenous peoples as equals. Uncomfortable though it may be to acknowledge, this requirement to treat indigenous cultures with respect and equality goes against the grain of the history of international law and thus is a new and hard-​ fought change. Even today, one of the sources of international law codified in the Statute of the International Court of Justice continues to reflect the historically entrenched attitude of international law towards indigenous peoples. It recognizes as a source of international law ‘the general principles of law recognized by civilized nations’.110 Excluded here—​and excluded purposefully—​are indigenous peoples. This suggests the tremendous achievement that the requirement of cultural respect for indigenous peoples represents.

X Conclusion The discussion in this chapter has outlined a total of eight principles. This chapter may at first glance appear to be an odd inclusion in a work on the international 106 UNDRIP, art 26(3). 107 ILO Convention No 169, art 5(b). 108 IFC Performance Standard 7 (n 76) objectives. 109 For a longer explanation of these requirements of good faith see Frederic G Sourgens, Good Faith in Transnational Law: A Pluralist Account (Brill 2022). 110 Statute of the International Court of Justice, art 38(1)(b). For a discussion of the objectionable nature of the word ‘civilized’ in the Statute see Vladimir Degan, Sources of International Law (Marinus Nijhoff 1997) 70–​75.

Conclusion  217 legal principles governing energy transition. The principles outlined in this chapter are of general applicability to any sort of project and therefore are not specific to energy transition. What is more, they appear to be uniquely concerned with the relationship between the state and its own citizens incidentally as part of project management. One might therefore wonder why these principles have any importance for the overall global governance of energy transition processes. The answer to this question is that energy value chains may be part of a global effort to bring about an effective energy transition. However, these energy value chains are located somewhere. They do not spring into life without consequences. Quite to the contrary, energy value chains are themselves reasonably resource intensive. They therefore impact communities in their own right. As energy transition requires a radical shift in energy value chains, energy transition imposes a significant strain on affected communities. Some of these communities may be affected for the first time by energy value chains—​areas that produce lithium, for example, may not also be areas known for oil production. There are thus new communities that will have to navigate the benefits and drawbacks of having large energy value chain projects located in their backyards. This understanding uncovers a central conflict between the climate, energy equity, and energy security principles on the one hand and the principles discussed in this chapter on the other. It is reasonably common place for authors to complain that if only one were to view climate change as a war-​like effort, resources to combatting it could be unleashed that would take the significance of the climate problem seriously.111 The idea to place energy transition on a war footing in which we do as do we must, damn the consequences, ignores the insights developed in this chapter. The most important insight in this regard is that it is not possible to discard the rights of the local communities affected by energy developments in the name of a faster energy transition. There is no utilitarian calculus that would allow one to impose significant pain on the newly affected communities for the benefit of a larger world society. The rights discussed in this chapter outline precisely that such trade-​ offs are impermissible. Affected communities have rights that are central to the protection of their ability to flourish. To ignore these communities and these rights is to treat members of the communities in question as dispensable. They become a means to achieve globally desirable outcomes. Such a treatment of affected community members is inimical to the idea of human dignity. It is as such not tenable in any system governed by international law and must as such be rejected outright. Energy transition is not a war effort in which one may discount the suffering of some as simply collateral damage of a heroic common effort. It is an effort that must strive towards, and therefore remain based in, human dignity. 111 See Alessio Terzi, Growth for Good: Reshaping Capitalism to Save Humanity from Climate Catastrophe (HUP 2022).

218  Community and Indigenous Rights Principles This means that there is an obvious clash between the demands outlined in earlier chapters and the demands outlined in this chapter. Energy transition cannot proceed at a pace that would undermine participation, consultation, labour rights, and cultural respect. It therefore must almost of necessity move more slowly than climate imperative alone might dictate. This means that the principles discussed in this chapter remain central to the understanding of decision-​making processes that make energy transition possible.

12

Conflict and Convergence of Energy Transition Principles I Introduction Part II of this book has introduced a total of thirty-​two international legal principles that govern different aspects of the energy transition. It drew these principles from different areas of international law including general international law, international environmental law, international climate law, international energy law, international economic law, and international human rights law. It applied these principles to the specific problem context of energy transition in order to sketch and make visible the specific legal obligations that must guide energy transition decision-​making going forward. In order to understand both the potential for conflict between these principles and the fundamental need to harmonize them, it is useful to list these principles so that one can appreciate them together. As these principles are intended to operate at the same time, this list now numbers these principles not as separate principles by area of concern as the chapters so far have done. Instead, it numbers them through for the first time as Energy Transition Law Principles, noting their origin in parenthesis: • Principle 1: The climate-​specific no harm/​harm prevention principle (Climate Principle 1) • Principle 2: The principle of climate-​specific sovereign choice of means (Climate Principle 2) • Principle 3: The climate-​specific principle of common but differentiated responsibility as cooperation (Climate Principle 3) • Principle 4: The principle of climate-​specific impact assessment and monitoring (Climate Principle 4) • Principle 5: The principle of climate-​specific precaution (Climate Principle 5) • Principle 6: The right to energy (Energy Equity Principle 1) • Principle 7: The sovereign choice of means of realization of the right to energy (Energy Equity Principle 2) • Principle 8: the principle of global cooperation on energy equity (Energy Equity Principle 3)

220  Conflict and Convergence of Energy Transition Principles • Principle 9: The principle of right-​to-​energy specific monitoring and participation (Energy Equity Principle 4) • Principle 10: The energy equity adaptation principle (Energy Equity Principle 5) • Principle 11: The right to energy reliability and resilience (Energy Security Principle 1) • Principle 12: Energy value chain sovereignty (Energy Security Principle 2) • Principle 13: Good faith performance of contracts (Energy Security Principle 3) • Principle 14: Global cooperation as an obligation to safeguard security of supply and security of demand (Energy Security Principle 4) • Principle 15: The principle right-​to-​energy-​security specific monitoring and participation (Energy Security Principle 5) • Principle 16: The energy security adaptation imperative (Energy Security Principle 6) • Principle 17: The environmental no harm/​ harm prevention principle (Environmental Sustainability Principle 1) • Principle 18: The principle of sovereign choice of means of environmental protection (Environmental Sustainability Principle 2) • Principle 19: The principle of environmental common but differentiated responsibility (Environmental Sustainability Principle 3) • Principle 20: The principle of environmental impact assessment and monitoring (Environmental Sustainability Principle 4) • Principle 21: The principle of environmental precaution (Environmental Sustainability Principle 5) • Principle 22: The principle of participation in environmental decision-​ making (Environmental Sustainability Principle 6) • Principle 23: The principle of bio-​ diversity protection (Environmental Sustainability Principle 7) • Principle 24: The principle of ocean protection (Environmental Sustainability Principle 8) • Principle 25: The principle of non-​ discrimination (Energy Community Governance Principle 1) • Principle 26: The principle of project-​ specific environmental protection (Energy Community Governance Principle 2) • Principle 27: The principle of minimum labour standards (Energy Community Governance Principle 3) • Principle 28: The principle of community project participation (Energy Community Governance Principle 4) • Principle 29: The principle of indigenous peoples consultation (Indigenous Rights Principle 1)

The Conflict between Energy Transition Principles  221 • Principle 30: The principle of free, prior, and informed consent (Indigenous Rights Principle 2) • Principle 31: The principle of indigenous peoples co-​ management (Indigenous Rights Principle 3) • Principle 32: The principle of cultural respect (Indigenous Rights Principle 4) This chapter will begin by outlining the inherent conflict potential between these different principles. As the chapter will explain, this conflict potential cannot be resolved by deductive logic: each set of principles is premised in fundamentally incommensurate values. This has an immediate impact on their practical application. Different needs pull in different directions. This problem has the potential to go to the heart of the enterprise of energy transition governance. It opens up the spectre of political contestation cloak using the rhetoric of law without providing a means of reconciling the conflicts in question. As this chapter will show, the first step to addressing the conflicting values inherent in the energy transition principles is to understand the function of law in energy transition governance. The main lens through which one traditionally encounters law and the rule of law is adjudication. As such, it is critical to reconcile and resolve conflicts in a final decision. In this context, the ambivalence created by the inconsistency in demands of energy transition principles is indeed problematic. However, the main function of law of energy transition governance is not adjudicatory. While adjudication continues to play an important role in energy transition governance, the principal role of law is in supporting effective and fair policy-​making. This role of law is fundamentally different in this discussion, that is why we advocate for different understanding for a rule of law-​based approach to energy transition. The chapter will conclude that the correlative rights logic developed throughout this book so far is capable of providing guardrails in the context of conflicts between different energy transition principles. It will outline how a reasonable use approach can address the problem of conflicting legal demands both by focusing simultaneously on stakeholder impacts and on energy system processes.

II  The Conflict between Energy Transition Principles The conclusions of each of the preceding five chapters have highlighted the areas of potential conflict between the different areas of energy transition principles. It is therefore reasonably straightforward to conclude that the principles developed so far can and do clash. The issue in this chapter is to determine how such a clash might be resolved within the frame of international law. This section outlines that

222  Conflict and Convergence of Energy Transition Principles this is not a clear task as theoretical matter. It notes that this leads to a necessary indeterminacy in legal principles and that such indeterminacy has significant practical implications. It concludes that this indeterminacy can lead to a temptation to use legal rhetoric as a means of political contestation within energy transition.

A  The Theoretical Incommensurability of Energy Transition Values Each of the five preceding chapters has shown that the distinct principles developed under the rubrics of climate, development, energy equity, energy security, environmental sustainability, and community and indigenous peoples’ rights rely on fundamentally different areas of international law. Most of these different areas of law were specifically negotiated by states in order to resolve specific policy problems. To a point, many of the rules discussed in the preceding five chapters therefore arise out of a form of ‘lex specialis’ or specialized regimes of international law.1 The Energy Transition Principles discussed throughout this part potentially continue to conflict and traditional conflict rules and approaches used in international legal disputes cannot resolve this potential norm conflict.   

In light of this likely starting position, it is highly unlikely that the ordinary conflict rules of international law would be able to resolve the inconsistencies between the different principles. The core conflict principle in this context is the rule lex specialis derogat legi generali (the special rule displaces the general).2 The question is which rule will be counted as ‘special’ or as more specially applicable. Traditional conflict rules do not clearly answer this question in the current context.3 At the same time, it is difficult to heed the interpretive rule that treaty provisions should be interpreted taking other applicable legal norms into account.4

1 This characterization is far from straightforward. For a discussion of the problem of lex specialis as opposed to lex generalis see Bruno Simma and Dirk Pulkowski, ‘Leges Speciales and Self-​Contained Regimes’ in James Crawford and others (eds), The Law of International Responsibility (OUP 2010) 139. 2 Erika De Wet, ‘Sources and the Hierarchy of International Law: The Place of Peremptory Norms and Article 103 of the UN Charter within the Sources of International Law’ in Jean d’Aspremont and Samantha Besson (eds), The Oxford Handbook of the Sources of International Law (OUP 2017) 628. 3 This problem has been well-​trodden in particular in the context of the overlap of international economic law and international human rights law. This literature has been aptly dealt with in Diane Desierto, Public Policy in International Economic Law (OUP 2015) 12–​14. 4 Vienna Convention on the Law of Treaties, art 31(3)(c). For one of the most influential articles on the provision see Campbell McLachlan, ‘The Principle of Systemic Integration and Article 31(3)(c) of the Vienna Convention’ (2005) 54 ICLQ 279.

The Conflict between Energy Transition Principles  223 The values and outcomes each of the regimes in question seeks to support are inconsistent with each other. There is no easy or evident common denominator between protecting bio-​diversity, protecting foreign investments, and realizing human rights. The values and outcomes underpinning each are not measured on the same scale.5 This means that the different regimes cannot straightforwardly be integrated into a single common whole. It also means that there is no conflict rule that provides a clear means to resolve which of the conflicting rules is applicable when and how far. Legal conflict norms appear to run out precisely when we need them the most.

B  The Impact of Incommensurability on Practical Policy Choices The incommensurability of the legal principles developed so far has important practical consequences. These conflicts play out at all the different levels of energy transition planning. This section will look at three examples of such conflicts to illustrate the apparently fraught nature of guiding energy transition by means of the legal principles developed so far. The three examples begin in the current and then move to the midrange planning stage. They are ‘nuclear versus coal’, ‘CCUS versus Energy Storage’, and ‘Solar Radiation Management versus Unmitigated Overshoots’.

(1) Nuclear versus Coal The scenario faced by Germany in early 2023 on how to meet the energy demands of the German economy—​reliance on nuclear or coal—​clearly illustrates that the Energy Transition Principles do not mandate a simple, single answer.   

One fundamental energy system design question is how to secure baseload electricity needs. Coal-​fired power plants and nuclear power plants are particularly suited to covering such needs.6 Both coal and nuclear are options in economies that do not have secure access to sufficient amounts of natural gas. Historically, some societies in this context chose nuclear (eg France, Japan).7 Others leaned more heavily

5 See Martha Nussbaum, The Fragility of Goodness: Luck and Ethics in Greek Tragedy and Philosophy (CUP 2001); Cass R Sunstein, ‘Incommensurability and Valuation in Law’ (1994) 92 Michigan LR 779. 6 For a discussion of both technologies see chs 1 and 3. 7 Ted Nordhaus and Juzel Lloyd, ‘Nuclear Resurgence’ International Monetary Fund (December 2022) https://​www.imf.org/​en/​Publi​cati​ons/​fandd/​iss​ues/​2022/​12/​nucl​ear-​res​urge​nce-​nordh​aus-​lloyd; ‘Japan’s Energy Supply Situation and Basic Policy’ Federation of Electric Power Companies of Japan https://​www.fepc.or.jp/​engl​ish/​ene​rgy_​elec​tric​ity/​suppl​y_​si​tuat​ion/​.

224  Conflict and Convergence of Energy Transition Principles on coal (eg China, India).8 Still others abandoned nuclear for cost reasons (eg US in the 1980s to the 1990s).9 The choice of nuclear versus coal takes on a different complexity in the current context. Nuclear energy is carbon neutral at generation (the value chain to mine uranium and build nuclear power plants still rely on fossil fuels to varying extents). Nuclear power plants are also expensive to build. The operation of nuclear power plants and the treatment and disposal of nuclear fuel rods poses significant unresolved environmental risks.10 Coal power, however, is comparatively straightforward from an environmental perspective. The production of coal poses important environmental challenges.11 It further can cause the displacement of entire communities.12 Yet, there is no risk of catastrophic fallout from current generation coal fired power plants. The main environmental threat from coal-​fired power is the high level of greenhouse gas emissions from such electricity generation. Looking at the energy transition principles developed so far, how should one choose between future coal-​fired power plants versus future nuclear plants? The question is not academic. Several states have announced a financing stop for coal fired power plants abroad. But its construction continues in several countries. This includes China.13 Is such a financing stop justified by the energy transition principles? Events in early 2023 Germany highlight that the answer is not straightforward. In the beginning of 2023, Germany faced a shortfall of gas deliveries from Russia to support electricity generation. At the time, Germany was in the end stage of a nuclear power phase out as well as a coal-​fired power phase out.14 Germany justified its nuclear power phase out on environmental precaution grounds. Germany 8 Joseph Webster and William Tobin, ‘China’s Energy Security Realities and COP27 Ambitions’ Atlantic Council (1 November 2022) https://​www.atla​ntic​coun​cil.org/​blogs/​energ​ysou​rce/​chi​nas-​ene​ rgy-​secur​ity-​realit​ies-​and-​cop27-​ambiti​ons/​; Emily Schmall and Clifford Krauss, ‘India Chases Clean Energy, But Economic Goals Put Coal First’ New York Times (9 December 2022) https://​www.nyti​mes. com/​2022/​12/​07/​busin​ess/​ene​rgy-​envi​ronm​ent/​india-​ene​rgy-​subsid​ies.html. 9 Steve Isser, Electricity Restructuring in the United States, Markets and Policy from the 1978 Energy Act to the Present (CUP 2015) 38. 10 See ch 3. 11 ‘Coal Explained, Coal and the Environment’ USEIA (16 November 2022) https://​www.eia.gov/​ ener​gyex​plai​ned/​coal/​coal-​and-​the-​envi​ronm​ent.php. 12 Loveday Morris, ‘Germany Portrays Itself as a Climate Leader. But It’s Still Razing Villages for Coal Mines’ Washington Post (23 October 2021) https://​www.was​hing​tonp​ost.com/​world/​2021/​10/​23/​germ​ any-​coal-​clim​ate-​cop26/​. 13 Ilaria Mazzocco, ‘China’s Commitment to Stop Overseas Financing of New Coal Plants in Perspective’ Center for Strategic & International Studies (24 September 2021) https://​www.csis.org/​ analy​sis/​chi​nas-​com​mitm​ent-​stop-​overs​eas-​financ​ing-​new-​coal-​pla​nts-​pers​pect​ive. 14 Michał Kędzierski, ‘Germany: Nuclear Phase-​Out Postponed for Three and a Half Months’ Center for Eastern Studies (17 November 2022) https://​www.osw.waw.pl/​en/​pub​lika​cje/​analy​ses/​2022-​11-​17/​ germ​any-​nucl​ear-​phase-​out-​postpo​ned-​three-​and-​a-​half-​mon​ths; Matthias Lang, ‘Coal Exit on Hold” Statutory Update –​Germany to Prepare for Potential Gas Shortage’ Bird & Bird (8 July 2022) https://​ www.twobi​rds.com/​en/​insig​hts/​2022/​germ​any/​statut​ory-​upd​ate-​germ​any-​to-​prep​are-​for-​potent​ial-​ gas-​short​age.

The Conflict between Energy Transition Principles  225 justified the coal-​fired power phase out on climate harm prevention grounds. At the point of having to choose between coal and nuclear under these circumstances, Germany chose coal-​fired generation.15 There was an exercise (either implicit or express) of balancing the principles in discussion and choosing according with the sovereign state values. The German example is important as it provides a means to question whether a global coal-​fired power financing moratorium really can be justified from all perspectives. The energy transition principles provide potentially inconsistent answers. The problem is that failing to produce any energy to observe both principles and avoiding both means of generation runs headlong into the demands of the right to energy. How are then the energy transition principles supposed to help find a solution to this impasse?

(2) CCUS versus Energy Storage The policy choices between CCUS and energy storage solutions highlights that energy transition requires balancing between the different Energy Transition Principles rather than a wholesale adoption of a hierarchy between them.

  

The Energy Transition Principles do not provide a recipe for how to undertake such balancing, and the remainder of the book will address how the Energy Transition Principles support such balancing.

A further fundamental energy transition question is whether one should heavily invest in carbon capture utilization and storage (CCUS) or energy storage solutions to solve the intermittence problem associated with utility-​scale renewable energy (solar and wind) developments instead. Leading climate-​based proposals like the IEA Net Zero 2050 report strongly energy storage over CCUS.16 Legal scholars similarly argue that climate principles demand such a radical switch inconsistent with CCUS reliance.17 The obvious place to start is that the climate global policy and legal regime has rejected a pure input method to climate change mitigation as discussed in Chapter 1. Following the Glasgow Climate Pact, it is therefore incorrect to argue that climate 15 Maximilian Steinbeis, ‘Nichts ist gut’ Verfassungsblog (13 January 2023) https://​verf​assu​ngsb​log. de/​nic​hts-​ist-​gut/​; Georg Hermes, ‘Bundesgesetzgebungskompetenz für die Bedarfsfeststellung eines einzelnen Braunkohletagebaus?’ (2021) 43 Natur und Recht 664; Thomas Schomerus, ‘Die Feststellung der energiepolitischen und energiewirtschaftlichen Notwendigkeit des Tagebaus Garzweiler II nach §48 Kohleverstromungsbeendigungsgesetz (KVBG): rechtspolitisch verfehlt und verfassungswidrig?’ (2021) 43 Natur und Recht 378. Steinbeis refers to both articles as support for the broader proposition that current German action in Garzweiler II is unconstitutional. 16 Stéphanie Bouckaert and others, Net Zero by 2050, A Roadmap for the Global Energy Sector (4th edn, IEA 2021). 17 Peter Drahos, Survival Governance: Energy and Climate in the Chinese Century (OUP 2021).

226  Conflict and Convergence of Energy Transition Principles principles (harm prevention and precaution) demand an abandonment of CCUS as an approach to mitigation.18 This starting point does not dispose of the issue in question. Currently, CCUS remains in the pilot phase.19 The same is true for energy storage projects.20 Both technologies show promise but neither is currently at a point of ramp up to scale. As one leading industry group puts it, the challenge for CCUS is that ‘around two hubs a month would need to be built every year until 2030’ to meet climate compliant mitigation scenarios.21 Therefore, achieving twenty-​seven global hubs in early 2023 is not yet to the needed scale.22 Storage technologies are arguably even further from scale. Given these uncertainties, different principles suggest different pathways. On the one hand, precaution and harm prevention in the climate context counsel towards energy storage solutions. These solutions support technology that is certain to reduce emissions. There is therefore no doubt about their ability to achieve outcomes. The right to energy, on the other hand, counsels towards adapting CCUS: the energy systems CCUS supports are more reliable and resilient, thus reducing energy insecurity. Uncertainty highlights that the values furthered by the different options are of paramount importance in choosing. How does law help balance these values against each other? As it currently stands, law requires balancing. That is exactly what a hybrid approach to climate governance means. Law does not currently provide a means to assess how that balancing should take place. It appears to leave one with few answers and little by way of guidance, suggesting that the Energy Transition Principles developed so far do not provide clear guidelines for action. The remaining chapters of the book will attempt to address this gap.

(3) Solar Radiation Management versus Unmitigated Overshoots The policy choices between deploying solar radiation management as opposed to permitting unmitigated climate change overshoots highlights that principles can be internally ambivalent.

18 See ch 1. 19 ‘The CCUS Hub Playbook, A Guide for Regulators, Industrial Emitters and Hub Developers’ at 14, OGCI (2022) https://​f.hubsp​otus​erco​nten​t30.net/​hubfs/​3971​732/​220​304%20C​CUS%20P​layb​ook%20 (1).pdf (there are ‘27 commercial CCUS facilities operating around the world as of September 2021, with a total capture capacity of 40 million tonnes of carbon dioxide per year’). 20 Stephen Singer, ‘DOE Offers nearly $350M for Pilot Projects Advancing Long-​Duration Energy Storage’ Utility Dive (15 November 2022) https://​www.util​ityd​ive.com/​news/​doe-​off​ers-​nea​rly-​350m-​ for-​pilot-​proje​cts-​advanc​ing-​long-​durat​ion-​ene​rgy-​s/​636​580/​. 21 ‘The CCUS Hub Playbook, A Guide for Regulators, Industrial Emitters and Hub Developers’ OGCI (2022) 5 https://​f.hubsp​otus​erco​nten​t30.net/​hubfs/​3971​732/​220​304%20C​CUS%20P​layb​ ook%20(1).pdf. 22 ibid 14.

The Conflict between Energy Transition Principles  227 The establishment of a hierarchy between Energy Transition Principles would not resolve the problem of how to apply the Energy Transition Principles in key upcoming global policy choices.   

One more fundamental problem concerns the question whether energy transition governance requires one to deploy solar radiation management when faced with the near possibility of a climate goal overshoot. Chapter 10 outlined the significant environmental risks of solar radiation management.23 At the same time, the book throughout has explored the risks of climate change itself. The question of solar radiation management most immediately leads to a clash between rival conceptions of the same principle: precaution. The exact timing of potential climate goal overshoot scenarios is not fully known. Different climate models project different average global temperature scenarios. As the Intergovernmental Panel on Climate Change concluded, ‘uncertainties in regional climate responses at a given GWL are large . . . and natural climate variability occurs in parallel with ongoing warming, so the potential for impacts higher than central estimates could be a more urgent consideration for risk assessments and adaptation planning than the earlier projected timing of reaching 1.5°C (high confidence)’.24 This means that there remains scientific uncertainty as to the exact timing of climate thresholds. The precautionary principle demands that such scientific uncertainty not stand in the way of action, particularly when the scientific baselines available are premised in the best available sciences (such as the science discussed in the Intergovernmental Panel on Climate Change reports). Precaution would suggest that to prevent catastrophic tipping events from being reached, one should begin with solar radiation management.25 The same precaution would also caution against the deployment of solar radiation management if one changes the object of precaution from a climate-​only focus to a global environmental pollution focus. Solar radiation management itself creates a host of potential environmental issues. There is thus uncertainty as to the environmental impact of solar radiation management itself. Therefore, environmental law logic—​and the environmental precautionary principle—​would counsel against deployment.26 Again, the issue is one of balancing. The risks of deployment and the risks of non-​deployment must be weighed against each other. As it stands, the principles

23 See ch 10. 24 Hans-​Otto Pörtner and others (eds), Working Group II Contribution to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change (Intergovernmental Panel on Climate Change 2022) 142. 25 See ch 7. 26 See ch 10.

228  Conflict and Convergence of Energy Transition Principles developed in Part II standing on their own do not provide a means on their face to weigh them against each other. How then should one balance principles against each other?

C  The Threat of the Political Discourse Taking Over The conflict between principles and the uncertainty it creates invites ‘political/​ policy considerations’ to take centre stage. Different values have different salience in different contexts. This means that different stakeholders will naturally prefer one proposed hierarchy of the energy transition principles over another. Stakeholders can then be tempted to use the reconstituted legal principles themselves as a justification for their own value preferences. As outlined in this section, the energy transition principles do not in fact support any such hierarchical order of one value over another (climate, energy equity, environmental sustainability, etc.). One might suspect that this ambiguity is resolved by the particular experiences and situation that a group in society holds. As these factors are shared only within an economically, socially, and culturally limited set, it is not universalizable and as such a political preference (in that it assigns resources according to a personally preferred distribution method).27 The interconnection between energy systems and the economy intensifies this political pull of different energy transition principles. Policy responses like the US Inflation Reduction Act or EU carbon border adjustments can be seen to achieve domestic economic benefits.28 These programmes are on their face motivated by reference to energy transition. Yet, this energy transition rhetoric can be seen to make inherent value judgments beyond what the legal principles developed so far would allow (in some manners of the implementations of these policies in any event). Given the importance of lived experience to this hierarchical ordering, it is not surprising that a ‘political’ turn most threatens cooperation and solidarity. The principles of cooperation and solidarity are at the heart of the Energy Transition Principles. They are critical for Energy Transition Principle 3 (climate common but differentiated responsibility), 8 (energy equity cooperation), 14 (energy security

27 See Carl Schmitt, Der Begriff des Politischen (Hanseatische Verlagsanstalt 1933). 28 For a discussion of EU carbon border adjustments see Jakub Benarek, ‘Is the EU Realizing an Externally Just Green Transition? A Short Analysis of the Carbon Border Adjustment Mechanism from the Perspective of the CBDR Principle and the Right to Development of LDCs’ EJIL: Talk! (31 October 2022) https://​www.ejilt​alk.org/​is-​the-​eu-​realiz​ing-​an-​ext​erna​lly-​just-​green-​tra​nsit​ion-​a-​short-​analy​ sis-​of-​the-​car​bon-​bor​der-​adj​ustm​ent-​mechan​ism-​from-​the-​pers​pect​ive-​of-​the-​cbdr-​princi​ple-​and-​ the-​right-​to-​deve​lopm​ent-​of-​ldcs/​; Jason Bordoff, ‘The Inflation Reduction Act Must Spur Virtuous Competition, Not Vicious Protectionism’ IMF Finance & Development (December 2022) https://​www. imf.org/​en/​Publi​cati​ons/​fandd/​iss​ues/​2022/​12/​amer​ica-​landm​ark-​clim​ate-​law-​bord​off.

The Conflict between Energy Transition Principles  229 cooperation), 19 (environmental common but differentiated responsibility), 28 (community participation), 29 (indigenous peoples’ consultation), 30 (FPIC), and 31 (co-​management). Cooperation and solidarity require states to take a point of view that is not purely self-​centred and self-​interested. Cooperation and solidarity require a position that acknowledges and accepts the existence of frequently contrary immediate interests of different stakeholders. The problem with a turn to the political is that a preference for a specific hierarchical ordering of energy transition principles provides stakeholders with an excuse not to cooperate: such a political invocation permits one to submit that one is cooperating to achieve a particularized goal but that the third party is defecting from what one considered to be the core value to be defended. Non-​cooperation—​like, for example, the imposition of economic penalties—​is cast as a means to secure compliance with a value that is for the supposed good of the third party, even if that third party does not see it that way.29 This is not a logic of cooperation—​it is the logic of competition dressed as goodwill.30 In the absence of a means to balance Energy Transition Principles through policy-​making, the political pull to favour national groups over global objectives risks to undermine the demands of cooperation and solidarity central to the Energy Transition Principles.   

Unless one can legally balance principles against each other, this threat of the political discourse taking over will consolidate. If ordering of different principles is inherently arbitrary and a matter of lived experience or political preference, law cannot constrain overreach in such ordering. This would spell the end for law as a guide to energy transition pathways—​realpolitik and only realpolitik would make that path.

29 Carbon border adjustments in particular face this problem. Such adjustments seek to improve compliance with the value of climate harm prevention. This value preferences runs headlong into the principle of common but differentiated responsibility. 30 Both carbon border adjustments and subsidy proposals like those potentially found in the US Inflation Reduction Act create competition between market blocks. Competition in general is helpful for innovation. The competition created by such governmental programmes may in fact undercut the innovation benefit of competition through over-​protectionism in mature markets. The US and the EU do not need to catch up with the state of the art in innovation. The sneaking suspicion is that protectionist measures are intended to keep out competition that may in turn push innovation. For a discussion of this dynamic of innovation, competition, and political rent-​seeking see Philippe Aghion and others, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations (HUP 2021).

230  Conflict and Convergence of Energy Transition Principles

III  The Rule of Law Demands for Balancing Energy Transition Principles A fundamental value of law is that it allows the transparent, predictable, repeatable, and universalizable resolution of conflict on the basis of a pre-​established and authoritative set of principles and rules.31 It is the not value or desirability of conduct in a particular context that matters but rather the possibility of embedding decisions in constraints that limit purely expedient and ad hoc decision-​making.32 The problem uncovered in the last section is that unless there is a way to legally constrain the manner in which one resolves value conflicts between Energy Transition Principles, decision-​making again appears to become purely expedient. It therefore would not meet the requirements of a rule of law-​based paradigm.

A  Law as Adjudication and Law as Problem Solving Given the context in which the Energy Transition Principles will be invoked, it is important to make a functional distinction on how law can guide decision-​ making. As Michael Reisman observed, one can apply law in two fundamentally different ways.33 First, it is possible to think of law through the lens of adjudication. There is a dispute and in that dispute one party must prevail due to the impartial application of law.34 Secondly, it is also possible to think of law through the lens of policy-​making. The point is to realize policy goals consistently with legal demands. Both lenses appropriately apply law.35 Both do so in very different ways.

(1) Law as Adjudication When most non-​lawyers think about law, they think of adjudication. Adjudication typically requires a dispute between a plurality of actors. In the context of such a dispute, an adjudicator must establish what actually happened by assembling a factual record. Once the factual record has been assembled, a decision-​maker must then determine which legal rules and principles might be relevant to the facts so assembled. Once the rules and principles have been identified, a decision-​maker must determine what these rules and principle mean (i.e., the decision-​maker must interpret the rules). Next, the decision-​maker must apply the interpreted rules and principles to the facts at bar. To the extent that the rules and principles require inconsistent results in light of the facts as the decision-​maker found them, 31 Ronald Dworkin, Law’s Empire (HUP 1986) 93. 32 See ibid. 33 W Michael Reisman, The Quest for World Order and Human Dignity in the Twenty-​ First Century: Constitutive Process and Individual Commitment (Brill 2012) 168–​77. 34 ibid 177–​83. 35 ibid 183–​90.

Demands for Balancing Energy Transition Principles  231 the decision-​maker must determine which rules or principles must trump so as to make a final disposition of the case and render judgment. Decision-​makers do not act as automata. Rather, all of the steps in the process of adjudication will provide the decision-​maker with a certain amount of discretion. Determining what happened requires a decision-​maker to make credibility assessments, give weight to evidence, draw inferences, etc. Determining which rules and principles to include similarly involves judgment. Interpretation of the content of the rules and principles broadens the scope for judgment, particularly in cases of first impression and in the context of judicial or quasi-​judicial authorities not bound by a system of precedent. The application of law to fact and the appreciation of which rules more squarely fit them just as clearly involve discretion.36 Because of this discretion (or perhaps despite it), indeterminacy causes particular problems for adjudication. An adjudicator must make a determination and cannot leave an issue unresolved.37 Adjudication imposes a binary determinability on disputes (liability versus no liability; jurisdiction versus no jurisdiction; breach versus no breach, etc.). The more open-​ended a particular dispute, the greater the potential for inconsistency. Claims that international law falls prey to politics are particularly pronounced in the context of international adjudication. Deconstructive practice has been brought to bear on international adjudication to show that there is no ultimate principle that can consistently guide decision-​making from within law.38 Decisions are either over-​determined or rely on multiple, mutually inconsistent grounds. At the same time, decisions are also under-​determined by failing to provide an ultimate rationale for choosing one set of arguments over another. Because adjudication in the final analysis leans on over-​determined and under-​determined reasoning, it invites the kind political, value-​based argumentation discussed in section I above. This critique is inapposite to a rule of law-​based approach to energy transition governance. Energy transition is not a matter of adjudication. It is a matter of bottom-​up, cooperative administrative decision-​making that ideally would substantially reduce the role of law as an adjudication instrument. The question is not who is right or who is wrong but how to regulate and allocate rights in the face of multiple competing legal demands. The critique that adjudication does not comply with the rule of law because a decision is premised in multiple inconsistent values showcases that international adjudication habitually does balance incommensurate values against each other.

36 See Reisman (n 33)177. 37 On the problem of non liquet see Sir Hersch Lauterpacht, The Function of Law in the International Community (OUP 2011) 135–​44. 38 Martti Koskenniemi, From Apology to Utopia: The Structure of International Legal Arguments (CUP 2005); David Kennedy, ‘The Sources of International Law’ (1987) 2 American University Intl LR 1.

232  Conflict and Convergence of Energy Transition Principles

  

International adjudication cannot provide a hierarchy of values but instead provides for a forum in which decision is motivated by reference to multiple audiences, each of which is seen as an equal before the law and is entitled to judicial reasoning supporting decision-​making.

Yet, even the critique of international adjudication as political also provides a key for understanding how adjudication, too, is capable of using the tension between different values as a driver for judgment within an appropriately legal frame. This key is the identification of over-​determination of decision.39 Decision-​makers, when possible, should seek to justify their decisions on the basis of multiple facially inconsistent values. That means that decisions are factually motivated in such a manner as to avoid a value clash as far as this is feasible. This over-​determination of decision is not unprincipled or accidental. Instead, its value commitment is pluralist since it does not give absolute preference to any one value but rather seeks to incorporate and balance as many values in the decision as is feasible.40 Its procedural commitment is ‘judicious’ in the sense that it is humble—​it seeks to resolve as little as possible by way of bright-​line pronouncements given that such pronouncements risk introducing a value preference that cannot be fully defended outside of the facts of a specific dispute.41 Additionally, this approach does not seek to find a perfect and definitive solution. The energy transition will remain an evolving challenge. Adjudication thus provides a clue for how to approach value conflict between applicable legal principles. It involves an exercise of discerning judgment. In the context of such a value conflict, decision-​making should attempt to over-​determine decision factually. Decision must be consistent with multiple values at the same time. Such an over-​determined decision still does not provide an arithmetic formula for how to decide a dispute. Rather, it is premised on an appreciation of the whole. Such a style of discerning judgment cannot be reduced to any a priori principle (one can only explain judgment by exercising it and not ex ante). It therefore can appear under-​determined through an a priori lens. However, it is entirely consistent within its appreciation of the situation in its entirety, which is the advocated approach when deciding on energy transition matters.42 Such exercise of discerning judgment, while under-​determined from the point of view of a priori reasoning, is no longer arbitrary. An arbitrary decision imposes the whim of a decision-​maker on a person or group at without their constructive 39 For one such example see Koskenniemi (n 39)293. 40 See Nussbaum (n 5)79. 41 In the domestic public law context, an analogue to this technique is the doctrine of constitutional avoidance. On this doctrine see Eric Fish, ‘Constitutional Avoidance as Interpretation and as Remedy’ (2016) 114 MLR 1275. 42 This is what makes judgment ‘judgment’ as Hans-​Georg Gadamer pointed out in his Truth and Method. Hans-​Georg Gadamer, Wahrheit und Methode, Grundzüge einer philosophischen Hermeneutik (Mohr Siebeck 1990) 36.

Demands for Balancing Energy Transition Principles  233 agreement.43 As discussed above, the absolute choice of one value over another exclusively on the basis of the lived experience of a decision-​maker is arbitrary; it does not engage with the lived experience of the persons most immediately and negatively affected by the decision. Where a decision-​maker incorporates the values of all parties in decision-​making, this is no longer a fair criticism of the decision. The decision is justified by reference to all relevant values involved. While it is true that more than one decision could be made that could incorporate such values—​that is, the decision is under-​determined because it is not clear why (the motivation) this decision was made rather than another. However, in such cases, the process of decision-​making is no longer arbitrary even if the decision itself remains under-​determined.

(2) Law as an Instrument for Problem Solving Law has a less obvious role to play than the one mentioned above. In most instances in which transactional lawyers, government lawyers and diplomats provide legal advice the issue is one of resolving a particular problem or set of problems. This problem must achieve specific goals in the setting of particular social contexts. Here, law first acts as a constraint on action; i.e., law identifies what is legally impermissible for an actor to do either because the contemplated action would be beyond the competence of the actor or because the contemplated action would run afoul of a legal rule enjoining the conduct in question. Secondly, law also acts as a tool to assist in structuring action within the realm of the permissible in order actually to realize the goal in question.44 Law can also serve as a problem-​solving tool to assist a decision-​maker in policy-​making. Lawyers in this mode articulate and interrogate legal principles to determine their social and political salience in the context of a specific policy problem.   

Both functions of law in a problem-​solving setting are not hampered by indeterminacy. Lawyers act creatively to find solutions for an impasse precisely because the law does not provide a once-​and-​for all answer to legal problems. Also, reality and problems mutate and written law (either case law or statutes) is not necessarily updated on a regular basis. The Paris Agreement is a case in point. The Paris Agreement likely would not have been ratified by the US Senate at the time of its conclusion by the Obama administration. Consequently, the negotiators had to find a means to structure the Paris Agreement so as to bring the commitments made by the US within the scope of permissible executive unilateral action.

43 44

Philip Pettit, Republicanism: A Theory of Freedom and Government (OUP 1997) 63. See Reisman (n 33)183.

234  Conflict and Convergence of Energy Transition Principles Lawyers in this context used indeterminacies in the context of US administrative and foreign relations law to bring the US within the global consensus.45 This structure was so successful that when the Trump administration withdrew from the Paris Agreement, it applied the Paris Agreement’s terms (as opposed to arguing that the Obama administration lacked the authority to conclude it on behalf of the US).46 When the US rejoined the Paris Agreement during the Biden administration, arguments that the Biden administration lacked the power to do so were not raised with any level of conviction.47 US lawyers used law as a tool to bring the US into the fold of a global consensus building exercise on climate change even as the tools available during the previous climate negotiation of a similar scope (the Kyoto Protocol) would have failed. To provide a further example, the problem-​solving approach is also familiar to human rights lawyers seeking to implement the obligation progressively to realize human rights. The realization of human rights creates conflicts between different rights given the very real financial constraints on government action. A government may thus be faced with a choice between how far to improve education access, electricity access, and access to healthcare. It is not likely to be able to realize all three outcomes fully at once, even though it is under an obligation to value each. Navigating between inconsistent commitments is part and parcel of the lawyer’s usual toolkit. Law constrains and guides expedient decision-​making by outlining alternative actions, reducing the risk of political interference. The essential elements of a problem-​solving approach to law are balancing rights and the exercise of judgment. In this context, too, law over-​determines problem solutions by testing them against different legal values and balancing these values against each other. It does so to support a decision with as many different values and actors as possible to make the resulting as sustainable or ‘sticky’ as possible.48 More than in adjudication, law operating through a problem-​solving lens articulates legal principles to determine their social salience. It looks to the ‘why’ motivating the relevant rule or principle in its broader social context rather than just the rule or principle itself. Law is a tool to understand, map and implement stakeholders’ interests.49 And it does that all the time, with very complex problems. The plurality of such interests is a fact of social life. It is unsurprising and desirable that it would be reflected in law. Law as problem solving is the art of balancing these demands against each other. 45 Harold Hongju Koh, ‘Triptych’s End: A Better Framework to Evaluate 21st Century International Lawmaking’ (2017) 127 YLJF 338. 46 See Lisa Friedman, ‘Trump Serves Notice to Quit Paris Climate Agreement’ NY Times (4 November 2019) https://​www.nyti​mes.com/​2019/​11/​04/​clim​ate/​trump-​paris-​agreem​ent-​clim​ate.html. 47 For the muted level of opposition see Rachel Frazin, ‘Republican Senators Take Aim at Paris Agreement with New Legislation’ The Hill (22 February 2021) https://​theh​ill.com/​pol​icy/​ene​rgy-​envi​ ronm​ent/​539​898-​rep​ubli​can-​senat​ors-​take-​aim-​at-​paris-​agreem​ent-​with-​new/​. 48 Koh (n 45). 49 Reisman (n 33)183.

Demands for Balancing Energy Transition Principles  235

B  Energy Transition Governance as Problem Solving Energy transition demands the use of law as a tool for problem-​solving rather than as a tool for adjudication. No adjudication (either individually or as a string of judicial decisions from different courts) is going to achieve energy transition. Energy transition is too complex for adjudication because it requires the creation of new and global energy value chains. These global value chains rely on the opening and expansion of extractive industry projects around the world. These global value chains require the construction of new processing plants and power plants. They require a whole new transport infrastructure and so on. Each of these components requires planning, permitting and integration. No single court or network of courts could feasible achieve such a result. Courts lack the requisite expertise, knowledge, and mandate to see this task through following the coordinated approach advocated by this book. The complexity to which energy transition policies respond highlights why energy transition governance relies upon law as a problem-​solving tool.

  

The bottom-​up governance approach discussed throughout the book invites this use of law as an organic tool for improvement of policy responses, as opposed as a stark command (mainly through adjudication) to comply with a single specific ex ante vision of energy transition pathways.

The nature of energy transition as a problem-​solving endeavour also is readily apparent as a positive matter on the face of the Energy Transition Principles developed in this part. All of these principles follow a logic of bottom-​up, networked governance. Such bottom-​up governance is distinguishable from a top-​ down governance. Top-​down governance sets specific obligations ex ante. These obligations could in principle be enforced by way of dispute resolution mechanisms. Bottom-​up governance does not set specific international obligations ex ante. Rather, it creates a structure through which cooperative efforts towards a shared goal can be managed and harnessed towards desired outcomes. This governance approach to energy transition outcomes is central to the principles developed so far. One of the weight-​bearing components for all Energy Transition Principles, no matter their origin, is the sovereign choice of means. This sovereign choice of means is central to the achievement of climate outcomes. In the climate context, this sovereign choice of means is reflected in the NDC approach of the Paris Agreement. In the energy equity and development context, this sovereign choice of means is reflected in the obligation on states progressively to realize human rights viewed as a totality. In the energy security context, this sovereign choice of means is reflected in energy sovereignty and sovereignty of natural resources. In

236  Conflict and Convergence of Energy Transition Principles the environmental context, the sovereign choice of means is similarly reflected in the manner in which the harm prevention principle is instrumentalized. Similarly, in the context of community governance, the obligations of consultation and participation do not predetermine an outcome but rather leave the state with the regulatory discretion to set its own policy goals in the context of the broader legal strictures set out in Chapter 11. The sovereign choice of means towards a shared goal treats law as a tool towards problem solutions. The state has significant latitude how it realizes shared goals. Yet, the state does not have the option simply to ignore internationally agreed upon goals. Rather, the point of sovereign choice of means is to use international, national, and local (state, municipal, provincial, etc.) law to achieve goals with the greatest ambition possible. The second critical weight-​bearing component for all energy transition principles, no matter their origin, is cooperation. This operation to cooperate again does not pre-​determine how cooperation is to occur. It leaves significant leeway to the community of states to achieve outcomes collectively. Law—​and more specifically the Energy Transition Principles—​assist in guiding this process. The Energy Transition Principles do not predetermine it. The combination of sovereign choice and cooperation towards key shared goals is at the heart of both problem-​solving and bottom-​up governance. It requires to think of law not as predetermining means ex ante. It is premised on a flexible use of legal structuring tools (laws, regulations, ordinances, contracts, bidding instructions, etc.) to identify, strengthen, and achieve goals. At the latest since the Copenhagen climate negotiations, Energy Transition Principles have consciously embraced this view of law as a problem-​solving tool. In doing so, the international climate community consciously abandoned the narrower conception of the function of law inherent in the Kyoto Protocol.

IV  Governing the Energy Commons: The Correlative Rights Logic for Balancing Energy Transition Principles Situating the Energy Transition Principles in the context of a problem-​solving mode of legal decision-​making does not entirely resolve the problem identified at the beginning of this Chapter. An understanding of the Energy Transition Principles as a means to resolve problems only assists so much in addressing conflicts between different Energy Transition Principles. More concretely, it is not clear yet how one should address the practical conflicts between reliance on coal-​ fired electricity or nuclear electricity to meet baseload demand, a focus on CCUS on the hand and energy storage on the other, and an approach that looks to solar radiation management to prevent or limit overshoot scenarios and an approach that risks allowing an overshoot scenario to happen mentioned above. This section

Governing the Energy Commons  237 will try to showcase how a correlative rights-​based approach assists in navigating these problems.

A  Correlative Rights of Energy Transition Stakeholders The starting points for a correlative rights analysis is that different stakeholders are rightful owners of parts of a common pool resource. Each stakeholder is ‘sovereign’ in the sense of having exclusive ownership rights with regard to a specific portion of the resource. At the same time, each stakeholder must cooperate with other owners of shares in the common pool resource in order to protect the resource pool as a whole. The structure of correlative rights fits reasonably well over the structure of bottom-​up governance. The principle of sovereign choice of means is inherent in the idea of ownership. Each owner can develop their respective part of the common pool resource as they wish. At the same time, the principle of cooperation is central to correlative rights. Unreasonable use of their share of the resource by one owner can significantly impair the common pool for all. A correlative rights logic explains how the bottom-​up use of legal principles in solving specific problems can lead to the adoption of effective solutions by a critical mass of stakeholders responding to each other’s efforts in a particular circumstance.   

The logic of correlative rights organized governance of the common pool resource overlays the rubrics of reasonable use and waste. As outlined in ­chapter 6, reasonable use is a matter of use that is consistent with community standards. Community standards change in much the way of bottom-​up governance: each member of a community changes its own conduct. When a critical mass of community members has changed its conduct, which occurs over time—​never suddenly, the community as a whole has shifted.50 Conduct that impairs resource use by others contrary to community standards would be unreasonable and would have to cease. Depending upon the circumstance, community members may have to contribute to the cost of a change in conduct to the extent that the community wishes to displace pre-​existing and continuing conduct by an outlier who now finds him/​herself out of step.51

50 On critical mass see Adeno Addis, ‘The Concept of Critical Mass in Legal Discourse’ (2007) 29 Cardozo LR 97. 51 See ch 6.

238  Conflict and Convergence of Energy Transition Principles This logic can help to deal with the coal versus nuclear problem identified earlier on in this chapter.52 Before sketching how a correlative rights logic would seek to resolve the value conflict, two methodological points are important to bear in mind. First, comparison calls for factual inductive judgment and not deductive conclusions about the values involved themselves. Policy decisions do not just affect one set of values and legal principles. Rather, they affect values and legal principles across the board. One can then compare the relative impacts of different policy pathways to determine whether a particular pathway is out of step with reasonable use (and what consequences this has for each of the correlative right holders.) Such bottom-​up governance is always sensitive to context and particularly to the relative resource base and historical circumstances of stakeholders.   

Secondly, the position of the parties themselves matters. The relative resource base, their historical development, and the timeline of alternative conducts matter. What may be unreasonable conduct for Germany, therefore, is not necessarily unreasonable for India, at any given time. The factual, inductive nature of the correlative rights analysis can and does account for differentiation. It is factually sensitive all the way down rather than making abstract judgments about policy choices in general, based on values from a specific corner of the world. With these caveats in mind, one can assess the German coal versus nuclear policy conflict. To begin with, Germany—​like any state—​has the right to make a sovereign choice of means how it achieves its emissions reductions to meet climate contributions.53 Germany similarly has equal energy sovereignty over its energy systems, meaning that it is entitled to deference about its energy choices.54 Particularly when Germany’s policy concerns are driven by environmental sustainability and energy security concerns, as they clearly are, Germany is acting within its traditional margin of energy sovereignty, and evidently, caring for its population’s mid-​and long-​term well-​being. This leaves the question whether Germany’s conduct is consistent with community standards. Here, Germany’s conduct is more problematic. In the first place, Germany finds itself in a region that already relies on nuclear power.55 Germany’s concern about the environmental consequences of a nuclear accident are not eliminated by a German exit from nuclear power. They are only diminished. Germany continued to import electricity generated by nuclear power plants in France after 52 See below. 53 Energy Transition Principle 2. 54 Energy Transition Principles 7, 12. 55 Nuclear Energy Statistics, Eurostat (December 2022) https://​ec.eur​opa.eu/​euros​tat/​sta​tist​ics-​ explai​ned/​index.php?title=​Nuclea​r_​en​ergy​_​sta​tist​ics (‘Nuclear plants generated around 25.2% of the total electricity produced in the EU in 2021’)(.

Governing the Energy Commons  239 its nuclear phase-​out began in 2011.56 The German energy market actively continued to contribute to the risk of nuclear accidents. The German position therefore is effective only if analysed from a narrow perspective. Germany uses its own energy sovereignty in a manner that is in tension with community standards.57 To further complicate matters, the question is not one of a German nuclear exit in the abstract. Rather, it is a question of relying on coal power or nuclear power to address an energy security shock. The question is nuclear or coal. Here, community standards would question Germany’s policy choice. Regional community standards have pushed to a faster coal exit as a matter of energy planning, for example in the Netherlands.58 One could say that the effort made by the Dutch government through its very unpopular choices (reducing speed limit in highways, etc.) and the hard work of The Hague courts in Urgenda and Milieudifensie was erased by the German decision. The Glasgow Climate Pact further has called for a phase-​out of unmitigated coal, similarly underlining a global concern about coal as a feedstock from a climate perspective.59 The nuclear alternative is not hypothetical. Rather, there are nuclear power plants that could assist in meeting energy demand at reasonably low costs. There are no time concerns or capital expenditure arguments that could be made for the use of coal. The relevant capital expenditures have already been made. The German government is choosing not fully to realize the return to energy systems from these investments. This leaves the ultimate question of comparing the negative consequences of both coal and nuclear use. The precautionary principle requires one to assume a worst-​case scenario on both fronts.60 This means that one must compare the environmental risks posed by a nuclear disaster with the worst-​case climate scenario. It must then establish the impact of these worst-​case scenarios across the board. Answering this question requires study and communication between community members. It requires due diligence as part of the process of decision-​making. This due diligence obligation is the subject of the next chapter. It is possible to reach some preliminary conclusions ahead of any future due diligence. Due diligence on nuclear energy suggests that the environmental risks

56 Philip Akoto, ‘Nuclear Power Plant Problems Make France an Electricity Importer’ EnerGate (5 July 2022). https://​www.energ​ate-​messen​ger.com/​news/​223​699/​nucl​ear-​power-​plant-​probl​ems-​make-​ fra​nce-​an-​elec​tric​ity-​impor​ter (noting that ‘[w]‌hile Germany always imported between 2 and just under 8 billion kWh from France in the first half of 2015 to 2021, the opposite was true in 2022: France purchased just under 2 billion kWh from Germany in the first six months of the current year’). 57 America Hernandez, ‘Parliament Votes to Give Green Labels to Nuclear and Gas’ Politico (6 July 2022) https://​www.polit​ico.eu/​arti​cle/​par​liam​ent-​votes-​to-​give-​green-​lab​els-​to-​nucl​ear-​and-​gas/​. 58 See André Nollkaemper and Laura Burgers, ‘A Classic in Climate Change Litigation: The Dutch Supreme Court Decision in the Urgenda Case’ EJIL:Talk! (6 January 2020) https://​www.ejilt​alk.org/​a-​ new-​clas​sic-​in-​clim​ate-​cha​nge-​lit​igat​ion-​the-​dutch-​supr​eme-​court-​decis​ion-​in-​the-​urge​nda-​case/​. 59 Glasgow Climate Pact (CMA.3), 36. 60 Energy Transition Principles 5, 21.

240  Conflict and Convergence of Energy Transition Principles associated with nuclear energy are significant but manageable.61 Due diligence further suggests that nuclear power is an effective to reduce climate risks from coal-​ fired generation.62 As it stands, it is likely that German policy-​makers should find offset reductions for the emissions from power generation that could have been avoided in the first place by existing nuclear power capabilities. Given the ready availability of nuclear as an alternative, it would be difficult to justify the use of coal on energy security grounds. Similarly, it is not plausible to defend the relative assessment of climate versus environmental risks without climate mitigation. This does not require a resumption of nuclear electricity generation (although that would remain an obvious policy approach). Germany could also implement aggressive CCUS approaches to reduce emissions from large sources in excess of current efforts. Germany could cut emissions in sectors other than energy. Germany could reduce total energy consumption. There are significant additional options. In its context, it is likely the case that any prolonged use by Germany of coal-​ fired as opposed to nuclear energy is inconsistent with the Energy Transition Principles, given Germany’s own internal understanding of its climate obligations and the available means to generate electricity in a more climate-​friendly manner.

  

This conclusion does not compel a restart of Germany’s nuclear fleet but requires the policy-​maker, at least, to find offsets by means of other policy measures for any actual surplus emissions attributable to coal-​fired generation as against an available nuclear alternative.

In a final twist, German constitutional jurisprudence itself seems to be consistent with this assessment. Germany’s Constitutional Court in Neubauer noted the lack of sufficient climate ambition in German climate legislation.63 It did so on the basis of a developmentally based analysis that is broadly consistent with

61 ‘Questions and Answers on the EU Taxonomy Complementary Climate Delegated Act Covering Certain Nuclear and Gas Activities’ European Commission (2 February 2022) https://​ec.eur​opa.eu/​ com​miss​ion/​pres​scor​ner/​det​ail/​en/​qanda​_​22_​712 (‘Following scientific advice, the Commission has concluded that nuclear energy, subject to strict safety and environmental conditions (including on waste disposal) that ensure the respect of the do no significant harm principle, can play a role in the transition towards climate neutrality in line with the European Green Deal’). 62 ibid (‘The Technical Expert Group on Sustainable Finance, advising the Commission on Taxonomy, acknowledged that nuclear represents a low-​carbon energy source. This is in line with the positions of international organisations such as the Intergovernmental Panel on Climate Change (IPCC), the Organisation for Economic Co-​ operation and Development (OECD) and the UN Economic Commission for Europe, which consider CO2 emissions from nuclear power plants over their life-​cycle comparable to those from renewable energy sources (as low or even lower)’). 63 Bundesverfassungsgericht (BVerfG) (24 March 2021) 157 Entscheidungen des Bundesverfassungsgerichts (BVerfGE) 270 (Neubauer).

Governing the Energy Commons  241 the correlative rights approach discussed so far.64 Rather than trying to resolve the issue in adjudication (unlike the Dutch courts), the court challenged the legislature on the grounds that its legislative effort had failed to solve the problem and asked it to draft more efficacious legislation. In the German context, it is therefore possible to resolve a value conflict between climate, energy, and environmental principles—​it is unreasonable for Germany to insist on its coal increase combined with an anti-​nuclear position under the current circumstances and under reasonable assumptions. Consistent with a bottom-​up governance approach, it is likely that the issue will be resolved internally within Germany.65 This resolution is not likely to mandate Germany to re-​start German nuclear generation but will require the German regulator to offset the emissions surplus actually caused by a future prolonged use of coal-​fired generation instead of reliance on nuclear generation.

B  Correlative Rights and Energy System Processes Correlative rights look at more than the community standards of right holders. The correlative rights logic looks also to the preservation of the common pool resources themselves. The chief tool of protection in this context was the prohibition of waste discussed in Chapter 6. Waste can help to answer how to resolve the clashes between Energy Transition Principles in the context of CCUS and solar radiation management. The question whether to invest in CCUS or in energy storage to support renewable generation is a question that helps to illustrate how the protection of the sustainability of energy systems themselves can assist in refining the problem analysis and finding solutions. In the first place, consistent with the bottom-​up governance approach to energy transition, states have an individual choice which approach to take to their own energy systems.66 This means that a state wishing to lean more heavily on CCUS can do so. Similarly, a state wishing to support energy storage is also able to move in that direction. Both approaches provide ample opportunity for cooperation. This analysis steps short in one important respect. Both approaches have significant impacts on energy systems and economic systems as a whole. In the first place, global energy sources remain predominantly fossil fuel driven.67 These global fossil fuel energy systems rely on a significant physical infrastructure. This

64 For a discussion see Matthias Goldmann, ‘Judges for the Future: The Climate Action Judgement as Postcolonial Turn in Constitutional Law?’ Verfassungsblog (30 April 2021) https://​verf​assu​ngsb​log.de/​ jud​ges-​for-​fut​ure. 65 Hermes (n 15); Schomerus (n 15). 66 Energy Transition Principles 2, 7, 12. 67 Laura Cozzi and others, World Energy Outlook 2022 (IEA 2022) 239 (listing total final consumption share of unabated fossil fuels as 66 per cent).

242  Conflict and Convergence of Energy Transition Principles infrastructure was capital expenditure intensive.68 Similarly, economic systems have grown around this infrastructure. A replacement of this infrastructure destroys energy value chains in their entirety, generating ripple effects well beyond the energy industry. The stranding and destruction of these value chains appears wasteful: there is a ready alternative to hand that does not lead to the destruction of existing energy value chains in their entirety. The development of CCUS technology is particularly helpful to the extent that it can protect energy security built around fossil fuel value chains in developing economies. CCUS technology implemented scale provides obvious benefits in extending the life of energy assets in those countries,69 while making fossil fuels acceptable in a low-​carbon future, which is a global imperative. It also provides a means to attract carbon market capital to those jurisdictions to finance CCUS hubs.70 It would therefore be helpful for developed states to cooperate with developing states to bring CCUS technology to those jurisdictions to meet the Glasgow Climate Pact goal of net zero emissions by or around mid-​century.71 Existing energy assets could be recycled rather than to have to be replaced.72 A waste perspective would therefore counsel towards the development of CCUS particularly with the preservation of existing energy value chains in mind. A problem-​solving approach to the Energy Transition Principles counsels for investment in CCUS particularly to protect existing economic activities in developing countries to safeguard economic development while also directing leading edge energy technology innovation and development to those states.   

Secondly, this does not mean that all efforts should focus on CCUS. Rather, energy systems are hardwired into broader economic systems. Such economic systems change due to innovation on the basis of a cycle of creative destruction.73 Historically, these cycles drove innovation in energy systems first with the introduction of coal powered steam engines, transforming the energy mix and global economy, and then with complementing coal power with oil and gas power, doing 68 For a rough and ready guide regarding the cost of energy infrastructure in electricity generation see ‘Cost and Performance Characteristics of New Generating Technologies, Annual Energy Outlook 2022’ USEIA (March 2022) https://​www.eia.gov/​outlo​oks/​aeo/​assu​mpti​ons/​pdf/​tabl​e_​8.2.pdf. For a discussion of the debt profile in particular as an obstacle to coal phase out see Divya Karyza, ‘Indonesia’s $20 Billion Climate Deal Requires Eye on Debt: Experts’ Asian News Network (21 November 2022) https://​asian​ews.netw​ork/​ind​ones​ias-​20-​bill​ion-​clim​ate-​deal-​requi​res-​eye-​on-​debt-​expe​rts/​ 69 To be implemented at scale, it would need to significantly exceed IEA projections. ibid. 70 Eric Williams and others, ‘A Guide to the Circular Carbon Economy (CCE)’ King Abdullah Petroleum Studies and Research Center (August 2020) 35–​36. 71 Glasgow Climate Pact (CMA.3) 22, 32. 72 See Williams and others (n 70)35–​36. 73 Carlota Perez, Technical Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages (Edward Elgar Publishing 2003).

Governing the Energy Commons  243 the same. These innovations allowed energy-​intensive activities to develop and reach new markets. Distributed renewable generation with energy storage promises to extend energy access again to areas in which the construction of a traditional grid is cost prohibitive. It is also reshaping the energy structures, as coal, oil, and gas did in their turn. The development of energy storage therefore is equally as important from a waste perspective. Energy systems are reliable, reach more people, and therefore lower costs when renewable energy can overcome intermittence problems. This again provides significant opportunities for cooperation to increase energy access around the world. Where and how to prioritize between CCUS and energy storage is a matter of increasing energy access, economic opportunity, and climate outcomes at the same time. It should be evident that a desirable objective is to avoid wasting progress that has already been made to provide global energy access. At the same time, it is equally desirable to use resources to increase the global realization of developmental outcomes. This requires a view that switches from ‘either/​or’ to ‘both’. A problem-​solving approach would similarly support investment in energy storage to take advantage of new renewable energy generation, leaving the balance between investments to policy-​makers in specific contexts.   

The preference for a mix of both CCUS and energy storage development does not mean that the Energy Transition Principles suggest a hands-​off approach. Quite the opposite. The question of how to support CCUS and energy storage again requires monitoring, cooperation, and planning. In a word, it requires diligence. This diligence must measure and provide a baseline for how to proceed in the context of specific country circumstances. However, from a bird’s eye perspective of applying the Energy Transition Principles, the insistence on a mix of approaches remains the best prescription. The question whether to look to solar radiation management or whether to let overshoot scenarios happen, finally, helps to illustrate how problem-​solving must look beyond energy systems. Solar radiation management involves significant environmental risks. These risks will manifest differently around the world depending on how solar radiation management is deployed. Similarly, the risks of allowing climate overshoot scenarios and the reaching of tipping points will manifest differently around the world. On the whole, the destructive force of climate change suggests that an all-​out prohibition of solar radiation management is untenable. Sizeable outcomes in energy transitions have already been achieved. Momentum behind these achievements suggests that energy transition has in fact a good change to be successful. The problem is that its success is likely to come later than desired. By the time that

244  Conflict and Convergence of Energy Transition Principles many of the structural reforms will yield their full results, temperatures will have moved past Paris Agreement thresholds. The efforts made so far would suggest that studying solar radiation management as a stop gap measure is a necessity. Without such a stopgap measure, energy transition efforts are likely to be futile for a large portion of the global population. A stopgap measure might be able to protect a significant portion of that population. At a minimum, some form of solar radiation management may be able to delay sea level rise and thus protect coastal communities.74 This is not to say that solar radiation management should be started on a whim. Rather, the Energy Transition Principles require significant diligence to be undertaken before solar radiation management can be deployed. This diligence should however be undertaken even over the most understandable and principled objections. It increasingly appears that without such drastic measures, the energy transition enterprise will prove to be futile. The protection of energy transition processes themselves therefore requires that solar radiation management at lease be studied.

V Conclusion The discussion in this chapter has outlined how the thirty-​two Energy Transition Principles can become a core driver of energy transition governance. The principal insight of the chapter was that it is important to step away from a principally adjudicatory understanding of law that focuses on the determination of rights and to see law as a tool for problem solving of shared problems, as it has been used for a long time and in a variety of fields. The chapter explained that this switch in perspective was necessitated in particular by the purposefully bottom-​up nature of energy transition governance processes. The chapter focused in particular on the interaction between the two core structural requirements for bottom-​up governance to work. On the one hand, governance must leave significant room for manoeuvre to participating states. There is no ex ante constraint. Rather, bottom-​up governance empowers states to act with progressive ambition to achieve goals flexibly and according to their own nationally determined contributions. On the other hand, governance relies on cooperation between different stakeholders. This duty to cooperate limits the scope for individual action. As national and international action must be responsive to multiple different values at the same time, the incommensurability of the Energy Transition Principles proved to be asset rather than a hindrance. One of the principal objections to pluralist governance principles is that it is not possible to draw a principled preference 74 JC Moore and others, ‘Efficacy of Geoengineering to Limit 21st Century Sea-​Level Rise’ (2010) 107 Proceedings of the National Academy of Sciences of the United States of America 15699.

Conclusion  245 as to which value should be given pride of place. Consequently, decisions must always be over-​determined. The chapter showed that such over-​determination proves helpful to strengthen the sustainability of decision-​making in multiple authoritative expectations of different global stakeholders in energy transition. The chapter did not leave over-​determination to chance. Rather, the principles of correlative rights again helped to explain how different Energy Transition Principles could be reconciled with each other. Specifically, it showed how community standards could be used in a bottom-​up governance framework to govern and achieve common goals over time. It also outlined how such decisions will always be fact specific and look to the specific resources and problems to be resolved rather than providing a one size fits all solution. A key additional insight from this chapter was that the factual nature of the application of the Energy Transition Principles highlighted the need for due diligence. To make appropriate decisions in an inductive governance approach requires a detailed understanding of the factual nature of the problems to be solved. This detailed understanding does not arise of its own. It is itself the result of a diligence process that must be managed as discussed in the next chapter. This diligence further requires communication and cooperation. Diligence requires not just a gathering of ‘passive’ information. It requires an engagement with active community stakeholders to understand impacts and alternatives. Thus, decisions are not just factual and specific. They are also interactive and adaptive. The ultimate result is that the Energy Transition Principles are first and foremost premised in conduct. There is no correct ‘what’ of energy transition. There is just an appropriate ‘how’. If this conclusion sounds familiar it is because it repeats a theme from the very first principle discussed in this Part of the book—​the no harm/​harm prevention principle in climate law and international environmental law. The Energy Transition Principles, in short, have come full circle and end where they started—​the attainment of a result through robust obligations of conduct including communicative conduct. This leaves one last question to be answered. Why are we limited to governing the ‘how’ when what we want to achieve is a series of ‘whats’? In the context of the harm prevention principle, the frustration of leading international environmental lawyers was palpable that international law is not sufficiently focused on results.75 The focus on state conduct limited the attainability of environmental protection. After engagement with this part of the book, a reader would be forgiven for sharing the same sense of exasperation: we should achieve results instead of focusing on process given the urgency of the problem energy transition must ultimately solve. In some sense, the answer why the Energy Transition Principles govern a ‘how’ is easier to give than its environmental counterpart. There is no obvious and 75 See Philippe Sands and Jacqueline Peel, Principles of International Environmental Law (4th edn, CUP 2018) 210, 803.

246  Conflict and Convergence of Energy Transition Principles achievable pathway to energy transition. Every choice made in the energy transition context has trade-​offs. These trade-​offs are significant and are not of necessity equitably shared throughout world society. When there is no obvious answer how to proceed, it is not possible to legitimate a policy path by reference to a substantive principle. The lack of an obvious answer means that people could look at the problem differently. If they can look at the problem differently, they are likely to see the substance of a decision as arbitrarily depriving them of a right or benefit. The focus on a ‘what’ would always be a focus on a means of decision-​making that is circuitous or arbitrary: it is only justifiable if one already agrees to the outcome in the first place. A focus on process can come a long way to redressing this problem. No decision or pathway is right in the abstract. Every decision is questioned, challenged, and contested. It is the very fact that a decision is ultimately as over-​determined as possible that gives it substantive authority. As many value systems as possible have contributed to the decision. This can only happen as a result of an appropriate process of decision-​making. The focus on process in the Energy Transition Principles is not a focus on process for its own sake. The Energy Transition Principles must secure outcomes. They must do so in a reasonably short window of time. Process therefore is goal oriented. In fact, the only purpose of the process is to secure the goal in a sustainable manner. The exasperation ‘why again process’ can therefore be answered echoing Jutta Brunée’s conclusion in international environmental law: ‘[p]‌ractically speaking, however desirable one may think that binding substantive obligations backed by binding dispute settlement are, this kind of approach is neither achievable nor desirable in the context of a complex global challenge like climate change’—​or, in our case, energy transition.76



76

Jutta Brunée, Procedure and Substance in International Environmental Law (Brill 2020) 208.

PART III

IMPLE ME N T ING T H E E NE RG Y TR A N SIT ION PR INC I PLE S

13

Due Diligence I Introduction Part II of the book outlined the substantive international legal principles that guide energy transition governance. As Part II concluded, these principles support a bottom-​up, networked governance framework that solves the key and overlapping climate, energy, economic, development, security, environmental, and community problems that are typically grouped together under the ‘energy transition’ banner. The principles aimed at core energy transition outcomes—​avoiding a climate catastrophe, provide an equitable access to human development, secure equal participation to all members of world society in an innovation-​based world economy, and support a circular energy economy. Part III now discusses three core processes through which the Energy Transition Principles can help to achieve such outcomes. Part III begins with due diligence.1 Chapter 14 addresses consultation, transfer, and autonomy. Finally, Chapter 15 discusses the role of international dispute resolution. Due diligence is the thread weaving through energy transition and the Energy Transition Principles. This chapter begins with a working definition of due diligence. It then situates due diligence in the context of the Energy Transition Principles outlined in Part II. It next develops that stakeholders conduct due diligence. It contrasts a view of due diligence as a minimum obligation of conduct to avoid liability with a view of due diligence as a practice aiming at fulfilment of valued outcomes. The chapter then applies this understanding of due diligence as a practice to four distinct phases of due diligence: (i) information gathering; (ii) risk mitigation planning; (iii) monitoring; and (iv) adaptation. The chapter ends by introducing the problem of how such diligence can in fact combine different diligence parameters in a single decision-​making function. This part of the chapter picks up where Chapter 12 left off. It explains how due diligence is capable of both providing and digesting the inputs necessary to govern energy resources through a correlative rights lens. It therefore provides a means that can assist in developing a decisional rubric that can implement the Energy Transition

1 Several of the arguments developed in this chapter were developed first in Frédéric G Sourgens, ‘Diligent Zero’ (2022) 75 SMU LR 417. The arguments have been developed further rather significantly due to the work on this book.

250  Due Diligence Principles fully in the context of a broader obligation of conduct in energy transition governance. The key point of this chapter is that energy transition governance can look to implement the developed principles along familiar lines. The correlative rights logic developed throughout this book relies on principles of reasonable use. This chapter provides the answer to the question: what does it mean to be reasonable? Consistent with the framework developed so far, it develops that the answer to this question is to focus on the ‘how’ rather than the ‘what’.

II  Due Diligence Obligations and the Energy Transition Principles The exact nature and content of ‘due diligence’ remains contentious.2 Even as the meaning of ‘due diligence’ remains foggy, the invocation of ‘due diligence’ is ubiquitous. To tackle this imprecision requires a working definition of due diligence. Working Definition of Due Diligence ‘Diligence’ is a function of preparedness. Being ‘due’ is a function of reasonable expectations. The working definition of ‘due diligence’ is reasonable preparedness.   

First, diligence is a function of preparedness. A diligent student is prepared for class and for the exam. A diligent pilot is prepared for the upcoming flight, and so on. This preparation does not have to have an immediate impact on outcomes: an unprepared student can answer a question correctly in class or in an exam and an unprepared pilot can successfully complete a trip. However, preparation limits risks. Diligence concerns this limitation of risk through some form of preparedness. Secondly, what is ‘due’ is what is reasonably expected. A student acts with due diligence when she has completed the assigned readings, has interrogated those readings in terms of the rubrics developed in class, and has internalized the lessons from the readings and prior class discussions. Students need not have read every book, memorized every word, or anticipated every possible question to be prepared. The student just needs to have reasonably met the ordinary classroom standards. Due diligence communicates that diligence is never absolute—​ something that would in any event be impossible to achieve given the wisdom of the originally Yiddish adage ‘man plans, God laughs’.3

2

3

On this continued debate see Samantha Besson, La due diligence en droit international (Brill 2021). ‘Mann tracht, un Gott lacht’.

Due Diligence Obligations and Energy Transition Principles  251 This section will map which principles developed so far involve such preparedness to fulfil. On the basis of this cartography, it will then briefly address the theoretical question of what due diligence ‘is’ (a duty, an obligation, a standard, a secondary rule of international law, etc.).

A  Climate and Environmental Law Due diligence is central to every climate and environmental principle developed in this book. However, the relationship between due diligence and the Energy Transition Principles to do with climate and international environmental protection are more immediate in the context of several core principles. This section will focus on these principles.

(1) Energy Transition Principles 1 and 17: Harm Prevention Due diligence is an express means to implement the harm prevention principle in international climate and international environmental law.   

The climate and environmental harm prevention principles rely expressly on due diligence. ‘Due diligence’ is consistent with the working definition of reasonable preparedness. The procedural components of the harm prevention principle concern preparedness.4 A state must ‘use all the means at its disposal in order to avoid activities which take place in its territory, or any area under its jurisdiction, causing significant damage to the environment of another [s]‌tate’.5 This is a procedural rather than a substantive obligation (‘use means’ not ‘achieve results’).6 This obligation is implemented by acting ‘with due diligence’, meaning that a state must adopt ‘appropriate rules and measures’ as well as display ‘a certain level of vigilance in their enforcement and the exercise of administrative control . . . to safeguard the rights of the other party’.7 ‘Appropriate’ and ‘certain level’ require reasonable rather than perfect preparedness.8 Due diligence is a function of reasonable preparedness in light of the means available to a state to achieve a core purpose through setting an acceptably effective regulatory system and exercising appropriate vigilance.

4 Importantly, the taking of steps of preparedness is not itself a free-​standing obligation. It is a means of implementing the harm prevention rule’s broader mandate. See Jutta Brunnée, Procedure and Substance in International Environmental Law (Brill 2020) 34. 5 Pulp Mills (Argentina v Uruguay) [2010] ICJ Rep 14, 65 (20 April 2010). 6 Brunnée (n 4) 64. 7 ibid 79. 8 ibid.

252  Due Diligence

(2) Energy Transition Principles 4 and 20: Impact Assessment and Monitoring Impact assessment and monitoring in international climate and environmental law support the reasonable climate and environmental preparedness of states by providing factual record for a state’s policy judgment.   

The principle of impact assessment and monitoring in both climate and the environmental setting relates directly to the exercise of due diligence. Due diligence in this context, too, is used consistently with the working definition. The point of impact assessments and monitoring is to ‘enable . . . the State to determine the extent and the nature of the risk involved in an activity and consequently the type of preventive measures it should take’.9 The impact assessment obligation supports preparedness. It anchors a core and detailed means to act with preparedness regarding transboundary effects of domestic activity in national law.

(3) Energy Transition Principle 5 and 21: Precaution Precaution in international climate and environmental law is a form of forward-​ looking reasonable preparedness that requires inquiry and a particular means of understanding ongoing scientific investigations.   

The precautionary principle in both climate and the environment is functionally related to the exercise of due diligence. Precaution requires a state not to use ‘lack of full scientific certainty’ as a ‘reason for postponing cost-​effective measures to prevent environmental degradation’ to the extent that ‘there are threats of serious or irreversible damage’.10 Precaution is a matter of preparedness because it anticipates a specific threat. Such preparedness does not require any and all anticipatory measures, but only reasonable measures as benchmarked against specific goals (cost-​ effective measures, measures that protect human rights, etc.)11 Precaution differs from diligence in that diligence focuses on present or imminent rather than distant and potentially speculative threats.12 Precaution is still a kind of preparedness—​it is a requirement of Vorsorge or anticipatory care.13 Such anticipatory care requires

9 Draft Articles on Prevention of Transboundary Harm from Hazardous Activities with commentary, International Law Commission (2001), art 7, comment 1. 10 Rio Declaration on Environment and Development (1992), principle 15. 11 See ch 7 on the definition of precaution in international climate law following the Paris Agreement. 12 See Besson (n 2) 130. 13 See Jacqueline Peel, ‘Precaution’ in Lavanya Rajamani and Jacqueline Peel (eds), The Oxford Handbook of International Environmental Law (2nd edn, OUP 2021) 302, 307.

Due Diligence Obligations and Energy Transition Principles  253 one to be prepared reasonably so as to respond to the object of the obligation of care in question. Precaution projects diligence into the future with regard to certain covered classes of risks.

(4) Reasonable Preparedness and the Other Relevant Energy Transition Principles Due diligence as reasonable preparedness is a core means to implement the other Energy Transition Principles relating to international climate and environmental law.   

Every climate and environmental Energy Transition Principle requires reasonable preparedness to realize. A sovereign choice of means requires preparation in policy-​making (Energy Transition Principle 2 and 18).14 Similarly, common but differentiated responsibility as solidarity requires preparation, understanding how courses of action will affect different members of world society,, and what assistance is required to support developing countries in fulfilling climate and environmental ambitions (Energy Transition Principles 3 and 19).15 The obligations of participation and protection of specific environmental goals similarly can only be poorly respected, protected, or fulfilled without preparation (Energy Transition Principles 22–​24).16 The idea of due diligence imbues every climate-​related and environmental Energy Transition Principle.

B  Human Rights Law Due diligence is central to every human rights principle developed in this book. However, the relationship between due diligence and the Energy Transition Principles with the right to energy, energy security, and community and indigenous rights is more immediate in the context of several core principles. This section will focus on these principles.

(1) Energy Transition Principles 6 and 11: The Right to Energy and Energy Resilience States must exercise reasonable preparedness in order to fulfil the fundamental right to energy by planning energy systems to provide energy access, regulating

14

See chs 7, 10. See ibid. 16 See ibid. 15

254  Due Diligence energy systems participants, and monitoring and enforcing the rules relating to the energy sector.   

The right to energy, as well as the right to energy resilience, are rights that require governmental action to fulfil. States must either plan and provide energy themselves, plan appropriately to regulate cost of service markets, or police deregulated markets.17 Energy security concerns highlight that states must plan not just for a best-​case scenario but must be reasonably prepared for energy shortfalls.18 An analogy to the fulfilment of the right to water confirms the same conclusion—​due diligence and reasonable preparedness are key to fulfil rights to basic services.19

(2) Energy Transition Principles 9, 15, and 28: The Principles of Monitoring and Participation Impact assessment and monitoring in human rights law support the reasonable preparedness of states progressively to realize rights by providing factual record for a state’s policy judgment.   

Impact assessment and monitoring go directly to the exercise of due diligence. The same concerns as already outlined above in the environmental setting are apt in the human rights context. Due diligence is therefore central to the right to energy regime. The principle of participation further strengthens this link. Persons have ‘the right to active, free and meaningful participation in development and in the fair distribution of benefits resulting therefrom’.20 Such participation requires preparedness by states to engage with stakeholders. It requires the collection of relevant data, as well as its dissemination. It requires the creation of sufficient fora in which persons can express their views. It requires mechanisms by which the comments are incorporated in policy-​making, and so on. These requirements cannot be met by states without preparedness. Due diligence in the sense used in this chapter is therefore also central to this human rights function. 17 See Kim Talus, Introduction to EU Energy Law (OUP 2016) 15–​54 (discussing the European context); Alexandra Klass, ‘Public Utilities and Transportation Electrification’ (2019) 104 Iowa LR 545, 567–​68 (discussing investor-​owned utilities in the US). 18 For a discussion of EU reforms to shore up energy security in light of recent upheavals in European energy markets see Leonardo Meeus and others, ‘The 5th EU Electricity market Reform: A Renewable Jackpot for all Europeans Package?’ EUI Florence School of Regulation Robert Schuman Centre Policy Brief 2022/​ 59 (November 2022) https://​cad​mus.eui.eu/​bitstr​eam/​han​dle/​1814/​75089/​PB_​2022​_​ 59_​RSC.pdf?seque​nce=​1&isAllo​wed=​y. 19 General Comment No 15 (2002) on the Right to Water (arts 11 and 12 of the Covenant), UN Doc E?C.12/​2002/​11, para 26. 20 Convention on the Right to Development (Draft 2), art 4(2).

Due Diligence Obligations and Energy Transition Principles  255

(3) Reasonable Preparedness and the Other Relevant Energy Transition Principles Due diligence as reasonable preparedness is a core means to implement the other Energy Transition Principles relating to international human rights.   

Many of the principles outlined in this book traditionally are grouped under the heading of ‘positive’ human rights.21 The progressive realization of such positive obligations has ‘obvious similarities with due diligence obligations in that they require adequate efforts and not the realization of immediate results’.22 This is the case most clearly in the context of the sovereign choice of means of realization of the right to energy (Energy Transition Principle 7). Similarly, it is at the heart of the cooperation with regard to the realization of the rights in question (Energy Transition Principle 8). It is just as central in the context of securing minimum labour standards (Energy Transition Principle 27). While the obligations of environmental protection, FPIC, and cultural respect do not neatly fit a single category of positive or negative rights, their respect and fulfilment requires reasonable preparedness. At a minimum, states must know of the relevant harms to avoid inflicting them. Knowing of such harms requires some level of preparation. Finally, reasonable preparedness is central to the adaptation imperative: adaptation requires detailed anticipation of risks and planning (Energy Transition Principles 10 and 16).

C  Energy and Economic Law The energy transition principles anchored in energy and economic law similarly all require reasonable preparedness. The areas in which energy and economic law are meaningfully additive to the discussion so far are energy value chain sovereignty (Energy Transition Principle 12), the good faith performance of contracts (Energy Transition Principle 13), and the obligation to cooperate towards safeguarding security of supply and security of demand (Energy Transition Principle 14).

(1) Energy Transition Principle 12: Energy Value Chain Sovereignty Energy value chain sovereignty requires reasonable preparedness by states to create the markets within which states can secure the bundle of rights inherent

21 Martin Scheinin, ‘Core Rights and Obligations’ in Dinah Shelton (ed), The Oxford Handbook of International Human Rights (OUP 2013) 527, 536. 22 Maria Monnheimer, Due Diligence Obligations in International Human Rights Law (CUP 2021) 74.

256  Due Diligence in their sovereign decision-​making (revenue raising, increasing affordable energy access, managing the national energy mix, securing the reliability, and resilience of energy access, etc.)   

Energy value chain sovereignty gives states the authority to authorize, restrict or prohibit development of relevant resources as well as an entitlement to equitable fiscal participation.23 Setting appropriate fiscal policy requires reasonable preparedness, ie an understanding of the economics of the value chains in question at the very least. Energy value chain sovereignty is a charge to manage energy value chains under the jurisdiction of the state in order to fulfil the right to development and, consequently, the right to energy.24 Such energy value chain sovereignty requires state planning to create the markets within which it can secure the bundle of rights inherent in its sovereign decision-​making (revenue raising, increasing affordable energy access, managing the national energy mix, securing the reliability and resilience of energy access, etc.). Each of these tasks requires substantial preparedness at overlapping levels of government.

(2) Energy Transition Principle 13: Good Faith Performance of Contracts The good faith performance of long-​term energy contracts requires reasonable preparedness to anticipate obstacles to performance, reasonably communicate with counter-​parties, and to secure the economic object of long-​term energy contracts.   

The good faith performance of energy contracts similarly requires reasonable preparedness by all parties to those contracts. A full catalogue of such good faith obligations is beyond the scope of this chapter.25 The core energy contracts in the first instance require the parties to anticipate, plan for and react to political, engineering and market challenges. Operators of oil and gas projects, for example, must act as reasonably prudent operators.26 Further, they must act consistently with good international practice.27 This duty implies a reasonable level of preparedness on the part of private partners in the performance of international energy contracts. States, similarly, must exercise their regulatory discretion under contracts ‘in light 23 ‘Permanent Sovereignty over Natural Resources’ General Assembly Resolution 1803 (XVII) (14 December 1962) UN Doc A/​RES/​3171, para 2. 24 ibid para 1. 25 See Frédéric G Sourgens, Good Faith in Transnational Law: A Pluralist Account (Brill 2022). 26 See Gary B Conine, ‘Prudent Operator Standard: Applications beyond the Oil and Gas Lease’ (2001) 41 Natural Resources J 23. 27 Petroleum Agreement between Ghana and Tullow Ghana Limited in respect of Deepwater Tano Contract Area (10 March 2006) 6.5.iii, 11.1.

Due Diligence Obligations and Energy Transition Principles  257 of generally accepted international petroleum practice, reasonableness (i.e., approval with not be unreasonably withheld) or good faith’.28 Good faith requires prudence, preparation, communication, and some flexibility from all parties.29 This reasonableness requires parties to be prepared for the eventuality of changes, which is more of a certainty in every decades-​long contract.

(3) Energy Transition Principle 13: Cooperation Towards Safeguarding Security of Supply and Demand Due to the global nature of energy value chains, states must cooperate with each other with reasonable preparedness to balance supply and demand as market participants and regulators.   

Supply and demand security in global energy markets requires significant preparedness. Energy value chains are (and have for a long time been) global and highly complex.30 Energy value chains are sensitive to external and internal irritations and disruptions. No single state is able completely to safeguard in the long-​ term its own security of supply or demand. This means that states must rely on global energy value chains. To rely on global energy value chains (and to make such value chains reliable) requires reasonable preparedness as a market participant. This requirement is central to international energy law instruments, as outlined in previous chapters. To fulfil energy security, too, requires due diligence.31

D  Theoretical Concerns The concept of due diligence is not without theoretical controversy. The first of these controversies concerns the question whether ‘due diligence’ means a single concept throughout the disparate legal contexts or whether it has inconsistent

28 King & Spalding LLP, Upstream Government Petroleum Contracts, A Practitioner’s Guide to Concessions, Production Sharing Contracts and Risk Service Agreements (Juris Publishing 2017) 151. 29 Jonathan Baughman, ‘The Prudent Operator Standard in the 21st Century’ (2012) 58 RMMLF/​ FNREL Institute 12–​ 1, 12–​ 31; Trans-​ Lex Principles Upstream Government Petroleum Contracts, A Practitioner’s Guide to Concessions, Production Sharing Contracts and Risk Service Agreements (Juris Publishing 2017) Nos IV.6.9, VIII.1. 30 On an historical appraisal of the global nature of energy markets and the relationship between geo-​politics and the desire for energy independence see Nicholas Mulder, The Economic Weapon: The Rise of Sanctions as a Tool of Modern War (YUP 2022). For one such chain see Margarita M Balmaceda, Russian Energy Chains: The Remaking of Technopolitics from Siberia to Ukraine to the European Union (CoUP 2021). 31 For a cross-​cutting analysis see Peter D Cameron, International Energy Investment Law: The Pursuit of Stability (2nd edn, OUP 2021) see also Kaj Hobér, The Energy Charter Treaty (OUP 2020) 347–​49 (discussing art 18 of the Energy Charter Treaty).

258  Due Diligence meanings in different areas of domestic and international law. As Samantha Besson notes in her seminal recent study of due diligence in international law, it has particularly been questioned whether due diligence in the US corporate law context functions like due diligence in international law given their radically different origins.32 Even though the object and substantive means by which one is duly diligent changes with specific contexts, the function of due diligence as reasonable preparedness is reasonable constant irrespective of legal context.   

This chapter has shown that ‘due diligence’ functions similarly across vastly different legal fields. ‘Due diligence’ in the energy transition context requires reasonable preparedness, no matter the specific context. Due diligence requires the same tasks in the corporate setting: due diligence is reasonable preparedness to understand what one acquires.33 ‘Due diligence’ in international environmental law is about reasonable preparedness even if preparedness is aimed at a completely different object (preventing environmental harm).34 Corporate human rights due diligence is about reasonable preparedness to understand the impact of corporate activities on the human rights of the local population.35 Lawyers in each setting engage in meaningfully similar intellectual tasks, even if they ask different substantive questions. Due diligence is not free-​standing primary obligation or secondary rule of international law but is a means to comply with and fulfil primary obligations, particularly when different primary obligations may facially conflict.   

The second controversy concerns whether due diligence is a rule of international responsibility or whether it is a primary substantive obligation at international law. This controversy is related to the first. Due diligence is conducted concretely in the context of specific factual circumstances and obligations.36 In such a context, is

32 Besson (n 2) 20. 33 See Richard Harroch, ‘A Comprehensive Guide to Due Diligence Issues in Mergers and Acquisitions’ Forbes (27 May 2019) https://​www.for​bes.com/​sites/​allb​usin​ess/​2019/​03/​27/​compre​hens​ ive-​guide-​due-​dilige​nce-​iss​ues-​merg​ers-​and-​acqui​siti​ons/​?sh=​45642​3352​574. 34 Brunnée (n 4) 34. 35 General Comment No 24 (2017) on State Obligations under the International Covenant on Economic, Social and Cultural Rights in the Context of Business Activities, UN Doc E/​C.12/​GC/​24, 15–​17; For a discussion see Diane Desierto, Public Policy in International Economic Law: The ICESCR in Trade, Finance, and Investment (OUP 2015) 131–​37. 36 Genocide Case (Bosnia and Herzegovina v Serbia and Montenegro), 2007 ICJ 43, 221 (26 February); Brunnée (n 4) 106–​12; Desierto (n 35)132–​33; Besson (n 2) 28.

Due Diligence Obligations and Energy Transition Principles  259 the lack of due diligence an independent violation of a free-​standing substantive obligation of general international law? Alternatively, does due diligence provide a secondary rule of how international responsibility is incurred in general (be it in relation to a specific rule of international law invoked in a particular case)? The answer is properly that it is neither. There is no free-​standing obligation of states to act with due diligence as such.37 The lack of diligence alone does not make state action wrongful.38 Conduct with diligence similarly is not a circumstance precluding wrongfulness. Diligent state action can still violate a present obligation of result.39 As Samantha Besson argues, due diligence instead is a flexible means to meet some international legal obligations.40 Due diligence therefore appears to fit between an independent primary rule and a secondary rule of international law.41 Reasonable preparedness in the energy transition context is not predominantly a matter of the absence of fault in the performance of one’s obligations but of the reasonable exercise of correlative rights.   

The third controversy is closely related to the second. Scholars like Besson argue that due diligence sets the standard for fault for obligations of conduct sounding in negligence. The exercise of diligence is the inverse of negligent conduct. Due diligence defines the duty of care owed to others the breach of which is wrongful (ie fault).42 This understanding of due diligence makes sense in an adjudicatory context. Adjudication must resolve disputes on the basis of the legal obligations parties owe to each other. In this context, it is natural that courts and tribunals frame due diligence (or its absence) in the context of the breach of an international legal obligation (such as for example the duty to warn about mines in a shipping lane in Corfu Channel).43 This understanding of due diligence makes decidedly less sense in a problem-​ solving application of law.44 In the energy transition context, the point of due diligence is to achieve the full realization of a just transition consistent with the 37 See Pulp Mills (Argentina v Uruguay) (n 5) 103–​104. 38 ibid. 39 On the distinction between obligations of conduct and obligations of result see Rüdiger Wolfrum, ‘General International Law (Principles, Rules, and Standards)’ Max Planck Encyclopedia of Intl L (December 2010) 68–​71. 40 Besson (n 2) 127. 41 ibid 80. 42 ibid 94–​95; Monnheimer (n 22) 94–​106 (discussing the concepts in detail). 43 Corfu Channel (UK v Albania) [1949] ICJ Rep 4, 22 (9 April 1949). For a discussion of whether the case in fact imposed a diligence obligation see Brunnée (n 4) 67. 44 W Michael Reisman, The Quest for World Order and Human Dignity in the Twenty-​ First Century: Constitutive Process and Individual Commitment (Brill 2012) 183–​90.

260  Due Diligence demands of all Energy Transition Principles. The point is not to avoid blame (fault) by doing the bare minimum.45 Due diligence in energy transition instead governs up cooperatively to achieve a shared goal. This governing up casts due diligence as the securing of correlative rights in commons governance. Correlative right holders must exercise their rights in a manner that was consistent with the rights of other owners of a common pool resource (even though each owner owned the underlying right as fully as the law formally allowed). This exercise of correlative rights requires reasonable preparedness—​ that is due diligence.46 Each party must not to abuse its right to the common pool resource.47 Abuse of right is not a matter of fault. It is a matter of understanding and embedding ownership rights in community standards of the resource community. Due diligence is needed to align one’s own conduct with the demands of the resource community and other resource community participants. Here, diligence supports the full realization of the resource rather than a bare minimum fault-​based understanding. Diligence aims to achieve outcomes. Its aim is not to avoid liability. Given the task of the Energy Transition Principles, this understanding of due diligence has the greater hope of providing aid to policy-​makers interested in pathways to achieving energy transition. It is in this sense that we use due diligence for the remainder of the chapter. Given the specific task of concrete energy transition decision-​making, due diligence has a key role to play. Energy transition is about the preparedness to face the multiple simultaneous and contradictory demands of climate, economic, energy, development, security, environmental and human rights threats. To meet these threats successfully, energy transition requires planning, flexibility, and steadfast global cooperation around shared goals. If ‘energy transition’ is about anything, it is about instrumentalizing the Energy Transition Principles developed in Part II to devise and implement a plan of action. This task—​the development of a plan of action to internalize core values and legal principles protecting those values—​is the task par excellence assigned to due diligence.

45 This is what the reference to negligence would work, particularly if reasonableness were defined positively. To the extent that one wished to define negligence normatively one would escape conceptual problems but would also run headlong into pluralism problems. For a discussion see Alan D Miller and Ronen Perry, ‘The Reasonable Person’ (2012) 87 NYU LR 323. For a further discussion of the pluralist dimension in this context see Frédéric G Sourgens, ‘Reason and Reasonableness: The Necessary Diversity of the Common Law’ (2014) 67 Maine LR 73. 46 It is noteworthy that Besson’s study touches on the same point when noting the principle of good neighbourliness as a source of diligence. Besson (n 2) 88. These neighbourliness obligations are at the heart of a correlative rights understanding of faultless diligence. 47 For a discussion of common pool resources in a related context see Carol M Rose, Property and Persuasion, Essays on the History, Theory, and Rhetoric of Ownership (Routledge 1994) 167. For a discussion of the underlying comparative legal basis for the arguments outlined here see Frederic G Sourgens, ‘Cyber-​Nuisance’ (2021) 42 PJIL 1005.

The Content of Due Diligence  261

III  The Content of Due Diligence Due diligence is a flexible means of fulfilling or achieving outcomes through reasonable preparedness. It is flexible because there are many ways to be reasonably prepared. It is aimed at achieving outcomes as it is a reasonable preparedness ‘to x’. These outcomes fulfil or realize a goal specified in a legal principle, in this case in one of the Energy Transition Principles. The discussion below will further refine the working definition of due diligence as reasonable preparedness in this light. It will look at reasonable preparedness in four different stages—​investigation, mitigation, monitoring, and adaptation. Reasonable preparedness means to do all four things—​ investigate, mitigate, monitor, and adapt. Due Diligence as Practice A practice aims at the realization of a specific set of goals.

  

The practice of reasonable preparedness requires stakeholders to investigate, plan and mitigate, monitor, and adapt for the achievement of such goals measured against a standard of excellence.

As due diligence is not a free-​standing obligation or secondary rule of international law, it leaves the question regarding how one should think of the four stages of due diligence outlined below. The approach taken here is to treat due diligence as a ‘practice’. ‘Practice’ is a creature of ethics. It is a ‘ . . . coherent and complex form of socially established cooperative human activity through which goods internal to that form of activity are realized’.48 Practice thus aims at the realization or fulfilment of a goal (just like diligence). This cooperative activity occurs ‘in the course of trying to achieve those standards of excellence which are appropriate to, and partially definitive of, that form of activity’.49 The standards in other words are necessarily tied to the ends to be achieved. Further, they are flexible in that they seek to achieve a standard of excellence—​a single path cannot be taken to succeed in all cases. Finally, such practices have ‘the result that human powers to achieve excellence, and human conceptions of the ends and goods involved, are systemically extended’.50 That is, they govern and aim up rather than setting a minimum floor. 48 Alastair McIntyre, After Virtue (Duckworth 1987) 187. The definition of practice is expressly Aristotelian. On the link to Aristotelian thought see Kelvin Knight, ‘Practices: The Aristotelian Concept’ (2008) 30 Analyse & Kritik 317. On praxis in Aristotle’s ethical thought see further AWH Adkins, ‘Theoria versus Praxis in the Nicomachean Ethics and the Republic’ (1978) 73 Classical Philology 297. 49 McIntyre (n 48) 187. 50 ibid.

262  Due Diligence When the discussion below focuses on practices, it means that the actions in question improve through goal-​oriented repetition and internalization: ‘practice makes perfect’. This means that goal-​oriented flexible repetition achieves the full realization of the goal of diligence.51 Falling short of that full realization is not of its own a basis for liability. That does not entail that one should not strive for excellence. The practice-​based understanding of diligence below therefore incorporates the broader problem-​solving goal of the last chapters.

A  The Practice to Investigate Due diligence as a practice of reasonable preparedness must strive to investigate and gather and analyse data so as to understand risks and inter-​actions between risks.   

Diligence as reasonable preparedness in the first place must collect data and project risks.52 Diligence must collect such data for each of the Energy Transition Principles or cluster of Energy Transition Principles. As discussed in the final section of this chapter, holistic diligence must do so across different traditional diligence regimes. Due diligence under the Energy Transition Principles requires a collection of data. This collection must begin with the baseline of impacts of current energy value chains and project the likely impacts of alternative energy transition pathways. Due diligence must collect such data with regard to: • climate impacts as aggregated authoritatively by the IPCC;53 • energy system impacts, including an analysis of the resilience and reliability of energy value chains as aggregated authoritatively for example by the IEA, OPEC, and IRENA and supplemented by stakeholder investigation;54 • transboundary environmental impacts outside of climate impacts (biodiversity, etc.) as established in environmental impact assessments;55 51 Aristotle, ‘Nicomachean Ethics at 1097a7-​1098a19’ in Jonathan Barnes (ed), The Complete Works of Aristotle: The Revised Oxford Translation, vol 2 (PUP 1984) 1734–​35. 52 See Corfu Channel (UK v Albania) (n 43) 20. 53 Stéphanie Bouckaert and others, Net Zero by 2050, A Roadmap for the Global Energy Sector (4th rev edn, IEA 2021) 30–​46; Myles Allen and others, ‘Summary for Policymakers’ in Valérie Masson-​ Delmotte and others (eds), Global Warming of 1.50C (IPCC 2019) 4. 54 Bouckaert (n 53) 37–​40, 64–​83; OPEC, 2021 World Oil Outlook 2045 (OPEC 2021); Rahia Ferroukhi and others, World Energy Transitions Outlook 2022 (IRENA 2022). 55 See Eli Kintisch, ‘Technologies’ in Michael B Gerrard and Tracy Hester (eds), Climate Engineering and the Law: Regulation and Liability for Solar Radiation Management and Carbon Dioxide Removal 28–​56 (Michael B. Gerrard and Tracy Hester (eds), CUP 2018); John Copeland Nagle, ‘Green Harms of Green Projects’ (2013) 27 Notre Dame J L, Ethics & Public Policy 59, 62, 66; Katherine Trisolini,

The Content of Due Diligence  263 • human rights impacts of energy value chains as a whole as aggregated by the IPCC and human rights organs as well as on the basis of independent stakeholder investigation.56 Understood as a practice, data gathering in due diligence builds on itself. The more data decision-​makers gather, they better they become at information gathering. Thus, while data gathering does not require the collection of all conceivable data on specific policies, projects, or approaches, a practice of data gathering will improve on itself over time. It will locate both more and more relevant data over time because it builds on learning from past due diligence efforts. Due diligence as a data gathering practice therefore governs up towards excellence rather than down towards a minimum standard of competence. With the improvement of data analytics and artificial intelligence more data can become meaningful and thus be meaningfully gathered. One of the advantages of data analytics and artificial intelligence is the ability quickly to see correlations and developments difficult to model ‘on paper’. This means that technological advancements in computing and programming will help parties to use more data by capturing more inputs, and use inputs more accurately. Understood as a practice, due diligence is also an essentially cooperative activity.57 A state will be able to gather only some of the information directly by use of its domestic police powers. Other information will not be readily available to decision-​makers because it concerns global phenomena. Diligent decision-​makers therefore need each other in order to gather information on global impacts.58 These cooperative efforts again improve the overall quality of data gathering by sharing insights and information and by collating a more detailed picture of outcomes and goals.59 This more detailed picture again supports a governing up in energy transition through diligence as a practice.

‘Holistic Climate Change Governance: Towards Mitigation and Adaptation Synthesis’ (2014) Colorado LR 615, 677. 56 Office of the High Commissioner on Human Rights, Joint Statement of the United Nations Special Procedures Mandate Holders on the Occasion of the 24th Conference of the Parties to the UNFCCC (6 December 2018) https://​www.ohchr.org/​EN/​New​sEve​nts/​Pages/​Disp​layN​ews.aspx?New​ sID=​23982&Lan​gID=​E. For a discussion see Kristin Casper, ‘Climate Justice: Holding Governments and Business Accountable for the Climate Crisis’ (2019) 113 American Society of Intl L Proceedings 197, 198; Joyashree Roy and others, ‘Sustainable Development, Poverty Eradication and Reducing Inequalities’ in Valérie Masson-​Delmotte and others (eds), Global Warming of 1.50C (IPCC 2019) 446–​510. 57 ILC Draft Articles on the Prevention of Transboundary Harm from Hazardous Activities with Commentary (2001), art 12 comment 4. 58 ibid. 59 This argument is advanced and supported in Anne-​Marie Slaughter’s work. For the locus classicus see Anne-​Marie Slaughter, A New World Order (PUP 2004).

264  Due Diligence

B  The Practice Reasonably to Mitigate Known Risks Due diligence as a practice of reasonable preparedness must strive to plan for and mitigate risks holistically across energy system impacts.   

Due diligence as reasonable preparedness needs to use the data it gathered to plan to respond and mitigate impact.60 Such plans cannot completely eliminate impacts and must make reasonable plans only.61 At a minimum, the measures taken in response to identified negative impacts must be proportionate efforts to address the projected threat.62 Low risk probabilities can materialize, meaning that significant impacts can nevertheless be felt. If the original risk assessment was properly made on the basis of information available and mitigations were proportionate to the risk, stakeholder action should be deemed diligent even in the face of such impacts.63 As stakeholders practice due diligence, these events are likely to decrease as risk projections become more accurate and mitigation measures more efficient. Due diligence as practice therefore allows state decision-​makers to improve outcomes without risking allegations that prior diligence was negligent. Similarly, diligence at this stage remains a cooperative activity. It is not possible for one state alone to mitigate damages, holistically, through the entirety of energy value chains. It takes multiple states along the value chain to address harms effectively.64 As different states network solutions with each other, the exchange of ideas will improve the set of potential solutions that could be adopted. There is thus a network effect to due diligence in the mitigation as well as in the data gathering phase.

60 Indus Waters Kishenganga (Pakistan v India), Award (20 December 2013), (2013) 31 RIAA 309, 354; ILC Draft Articles on the Prevention of Transboundary Harm from Hazardous Activities with Commentary (2001), art 3; Anne Peters and others, ‘Due Diligence: The Risky Management Tool in International Law’ (2021) 9 Cambridge Intl LJ 121, 125–​26; Tamar Meshel and Moin A Yahya, ‘International Water Law and Fresh Water Dispute Resolution: A Cosean Perspective’ (2021) 92 University of Colorado LR 509, 546–​47. Dionysia Katelouzou and Peer Zumbansen, ‘The Transnationalization of Corporate Governance; Law, Institutional Arrangements, and Corporate Power’ (2021) 38 Arizona J Intl & Comparative L 1, 52. 61 Peters and others (n 60)126. 62 This understanding of proportionality underlies the ILC Transboundary Harm articles. ILC Draft Articles on the Prevention of Transboundary Harm from Hazardous Activities with Commentary (2001), art 3 comment 9, 18; Alabama Claims (United States v Great Britain) Award (8 May 1871), 29 UN RIAA 125; see also Marco Longobardo, ‘The Relevance of the Concept of Due Diligence for International Humanitarian Law’ (2019) 37 Wisconsin Intl LJ 44, 47–​54. 63 GM Lawrence, ‘White Paper: Perceptual Biases in the Assessment of “Reasonableness” in Due Diligence and Reliance’ (October 2017) 3 https://​exeter​ltd.com/​wp-​cont​ent/​uplo​ads/​2017/​10/​White-​ Paper-​Per​cept​ual-​Bia​ses-​in-​the-​Ass​essm​ent-​of-​Rea​sona​blen​ess.pdf; Longobardo (n 62) 47–​54. 64 Edith Brown Weiss convincingly argues that the broader the coalition of decision-​makers, the more sustainable decisions will be as they will also reflect the input from the stakeholders in question. See Edith Brown Weiss, Establishing Norms in a Kaleidoscopic World (Brill 2020) 117–​20.

The Content of Due Diligence  265 The key difficulty for risk mitigation in the energy transition context is that it must be conducted holistically. It is not enough to mitigate only one set of risks. The information gathered across different kinds of risks needs to be brought together to form a holistic risk response. This holistic risk response will need to make trade-​offs. It will not be possible to mitigate against all risks completely. Some areas will be more impacted than others. How these trade-​offs can be made in light of the problem-​solving approach adopted so far will be discussed in section III below.

C  The Practice to Monitor Due diligence as a practice of reasonable preparedness must promptly monitor the policy impacts of policies and projects and compare these impacts against risk projections.   

Due diligence continues after a policy or project is approved. Reasonable preparedness requires one to monitor whether a policy or project in fact follows projections.65 This monitoring obligation is part of climate law, international environmental law, human rights law, and energy governance context, as discussed in Part II.66 Monitoring, in turn, requires transparent disclosure.67 Monitoring highlights the connection between a practice of due diligence and the progressive achievement of shared goals. The practice of monitoring improves future monitoring activities. Monitoring also improves risk projections and modelling by testing earlier risk projections.68 More importantly, monitoring supports progressive realization of goals by providing a benchmark for progress and a means to improve outcomes.69 The practice of monitoring is meaningfully a cooperative activity. As different international actors monitor to assess the same outcomes, actors can learn from each other’s experiences. As different results appear in different contexts, monitoring activities can be refined in order to establish whether similar results can be replicated elsewhere or not. The greater the number of monitoring reports, the better the results of future reports will become due to the presence of more data.70 Monitoring in other words continues the trend seen so far. Due diligence as a practice builds on itself. It improves understanding and outcomes as it strives for 65 Pulp Mills (Argentina v Uruguay) (n 5) 79. 66 Paris Agreement, arts 13(7)(a), 14; ICESCR, art 16; General Comment No 1 (1981) on Reporting by States Parties, UN Doc E/​1989/​22, 3; Monnheimer (n 22) 233–​36; Philippe Sands and Jacqueline Peel, Principles of International Environmental Law (4th edn, CUP 2018) 657–​81. 67 See Paris Agreement, art 13(7)(a); ICESCR, art 16. 68 General Comment No 1 (n 66) 6–​8; Paris Agreement, art 14; Glasgow Climate Pact (CMA.3), 3, 13. 69 General Comment No 1 (n 66) 7. 70 See Glasgow Climate Pact (CMA.3), 76–​77.

266  Due Diligence its goal. It does not look to maintain a minimum standard. It strives to achieve excellence over time through self-​repetition. Monitoring therefore supports the view of due diligence as a practice of reasonable preparedness.

D  The Practice to Adapt Due diligence as a practice of reasonable preparedness must promptly adapt policy response to previously unanticipated impacts discovered during monitoring.   

Monitoring also requires adaptation to respond to findings from monitoring. Such adaptation is required by climate law, human rights law, and international environmental law, to name but a few.71 Adaptation does not require the full realization of the original risk mitigation goals.72 Instead, the new reality of unanticipated risks must be reflected in the impact assessment relating to the project on a forward going basis. Further, mitigation plans should be revised in order to address the impact of a policy or project to the extent possible. This does not require the state to meet the original risk/​reward equilibrium in its mitigation plan. Rather, it must update plans in light of the new context of sunk costs and increased risks.73 If unanticipated impacts are severe and if they cannot reasonably be avoided, abandonment may be warranted.74 Such decisions to abandon a project or policy are particularly difficult to make as the consequence of abandonment itself must also be taken into account. These impacts from the abandonment of a policy or project could conceivably be worse, all things considered, than the unanticipated negative impacts of the project itself. Even with this significant caveat, it is central to see the role of the practice of due diligence to implement the Energy Transition Principles. Setbacks, challenges, and even tragedies are part and parcel of ethical practice. It is the adjustment to these setbacks that permit one fully to internalize the goals of the practice itself. Excellence cannot be achieved in the abstract. It requires some failure to gain a better understanding of the complexity of problems and the yielding and flexibility needed to resolve them. The limitations of adjusting in the context of a specific

71 See Paris Agreement, arts 4(3), 14(3); Monnheimer (n 22) 233–​36 Sands and Peel (n 66) 211–​13. 72 See Patricia Birnie and others, International Law and the Environment (3rd edn, OUP 2009) 149–​50. 73 See ibid. One could analogize this to good faith duties to renegotiate in the context of materially changed circumstances. Tans-​Lex Principle IV.6.7. Such an approach would draw on the principle of rebus sic stantibus. 74 See Birnie and others (n 72)170.

Diligent Energy Transition Decision-making  267 project or policy provides a better understanding of the underlying problem of energy transition. This better understanding permits a better assessment of what data to gather, what risks to project, what mitigation pathways are available, and how they might be implemented. This implementation is a cooperative activity. This is true for the practice of due diligence itself. It is also true with regard to what one does with due diligence. Due diligence provides a means to cultivate active stakeholder engagement. This active stakeholder engagement is central to achieving the needed support to see through the projects and policies needed to sustain energy transition pathways. This active stakeholder engagement (and the link between stakeholder engagement and due diligence) is the subject of the next chapter.

IV  Diligent Energy Transition Decision-​making Before moving on to the question of stakeholder engagement in the next chapter, there is a final problem for the practice of due diligence to resolve. The Energy Transition Principles require the satisfaction of different values. As is, these values cannot all be fully satisfied. This means that due diligence must provide a means to provide potential pathways for decision-​makers to assess the relative merits of different policy solutions. The first task for holistic due diligence is to identify a reasonable range of mitigation strategies that would reduce each of the risks at issue in the Energy Transition Principles. In many instances, it will be the case that these strategies are not technologically or economically feasible. In such scenarios, due diligence should substantiate that technology in fact is not available or could not be developed in a timely manner.75 Alternatively, due diligence would have to substantiate that energy value chains would be interrupted at critical points because the cost of adopting mitigation measures would not permit stakeholders to achieve a reasonable rate of return on investment (meaning that core projects would not in fact be pursued). Finally, due diligence would need to establish that governments are not in fact capable to bridge the gap in question (for example, as of today, there is in fact no fully reliable certification scheme to guarantee environmentally-​responsible and human rights compliant cobalt sourcing).76

75 On administrative guidance regarding such threats see ‘Wildlife Concerns Associated with Wind Energy Development’ US Fish and Wildlife Service https://​www.fws.gov/​midw​est/​wind/​wild​life​impa​ cts/​index.html. 76 ‘Cobalt from Congo: How to Source it Better, Comparative Analysis of Existing Supply Chain Certification Schemes and Artisanal Practices’ Transport Environment (April 2019) https://​www. trans​port​envi​ronm​ent.org/​sites/​te/​files/​publi​cati​ons/​Cob​alt%20f​rom%20Co​ngo_​how%20to%20sou​ rce%20it%20b​ette​r_​Fi​nal.pdf.

268  Due Diligence Due diligence as a practice of reasonable preparedness must establish what Pareto optimal policy pathways are feasible maximally to realize potentially mutually inconsistent policy outcomes demanded by the Energy Transition Principles.   

With this data, due diligence can then establish what policies and project structures supporting energy transition remain feasible. It can project the consequences of implementing a policy or project with different currently available mitigation measures.77 This would reduce the risk of impacts at least somewhat rather than projecting an unmitigated impact.78 With this data in hand, it is possible to propose alternative energy-​transition pathways and to calculate their respective risks and costs. Specifically, it is possible to project and compare the risk the respective specific pathways pose. Due diligence permits concrete judgments about these pathways in light of specific, factually substantiated risk factors rather than requiring decision-​makers to make value judgments in the abstract. In principle, each of the different pathways this diligence effort suggests should offer Pareto optimal strategies. Pareto optimality describes ‘a situation in which the utility (or welfare) of no one can be raised without reducing the utility (or welfare) of someone else’.79 This function has been used to discuss inter-​generational equity in the climate change context—​thus, ‘[a]‌n intergenerational distribution A is Pareto-​superior to intergenerational distribution B if, in distribution A, one generation is better off and the other is not worse off, compared to distribution B’.80 It is ‘Pareto optimal if no other distribution is Pareto superior to it’.81 There always is more than one such Pareto optimal distribution available.82 Any Pareto superior distribution realizes efficiency gains compared to a Pareto inferior distribution. These gains themselves can be distributed in any number of ways between A and B. Pareto’s argument is helpful because energy-​transition diligence tries to measure welfare impacts according to different incommensurate metrics. Given that climate, energy value chain, development, human rights, and environmental impacts are incommensurate with each other, it is possible to apply the Pareto welfare function by analogy. A Pareto optimal distribution would propose a policy or project structure that is economically feasible and would increase the realization of at least one of the underlying values supporting the Energy Transition Principles without

77 ‘Wildlife Concerns Associated with Wind Energy Development’ (n 75). 78 Mark Kinver, ‘Black Turbine Blade “Can Cut Bird Deaths”’ BBC (26 August 2020) https://​www. bbc.com/​news/​scie​nce-​envi​ronm​ent-​53909​825. 79 Amartya Sen, Development as Freedom (Anchor Books 1999) 117. 80 Stephen Marks, ‘Valuing the Future: Intergenerational Discounting, Its Problems, and A Modest Proposal’ (2011) 41 Env L Reporter News & Analysis 10615, 10624 (emphasis omitted). 81 ibid. 82 See ibid.

Diligent Energy Transition Decision-making  269 reducing the realization of another, at least in an equivalent level. Once one has reached a Pareto optimal solution, it is no longer possible to improve outcomes even though the solution underperforms the requirements of one the Energy Transition Principles viewed on their own. At a minimum, one could therefore establish that the policy proposal is maximally ambitious. There is no better policy option available that does not achieve increases in realization of one value by a corresponding offset in another. Once at that point, policy discussions turn into a zero-​sum game.83 Due diligence as a practice of reasonable preparedness must provide multiple different Pareto optimal alternatives for decision to allow decision-​making to weigh different pathways against each other.   

The practice of due diligence strives to provide a reasonable number of such Pareto optimal alternatives as well as the impact of not proceeding with the policy or project, at all.84 Due diligence does not need to run through every conceivable scenario. Instead, it should at least establish scenarios that leave the different relative impacts (climate, environmental, human rights, etc.) in a reasonable, Pareto optimal equipoise. It should also propose scenarios that maximize each of these outcomes and project the relative impairment this causes to others (if we achieve 100 per cent of our climate goal, what environmental, development, and human rights goals can we still meet and what environmental, developmental, and human rights impacts can we reasonably project to occur in such a scenario). These choices would provide decision-​makers with reasonable alternative to fine-​tune their responses in light of the available information about the broader social, environmental, and economic context. A sovereign choice of such means to realize energy transition is therefore appropriate from a holistic perspective. One must choose a Pareto optimal option. The choice between Pareto optimal options is a matter of policy preference that cannot be legally contested in all but the most extreme instances. There is one important exception to the relative parity of different policy pathways. It is totally impermissible to achieve gains in energy transition fulfilment to benefit one group diminishing the legitimate rights of members of another group. The principles of common but differentiated responsibility as well as the principle of non-​discrimination are categorical in this respect (Energy Transition Principles 3, 19 and 25). In practice, this means that any reduction in the realization of

83 Amartya Sen, Development as Freedom (Anchor Books 1999) 117. 84 But see Eric A Posner, ‘Transfer Regulations and Cost-​Effectiveness Analysis’ (2003) 53 Duke LJ 1067, 1088 (arguing that NEPA and similar statutes only require disclosure that policy options are not Pareto optimal and leaving the issue to the political process).

270  Due Diligence development and human rights in the name of energy transition would be deeply suspect and would require an explanation.85 This development and human rights preference is built in to the core of the Paris climate regime.86 Energy transition alters the backbone of international economic cooperation.87 Such international economic cooperation can lay claim to legitimacy and authority only if it is consistent with the value of human dignity.88 Any fundamental reorganization of the international economic order therefore should only be legitimate to the extent that it, too, is consistent with human dignity.89 The object and purpose of human rights law is the protection and promotion of human dignity.90 Consequently, human rights, and human development as a consequence, should have a central place in energy transition governance: they must safeguard that energy transition not do violence to the equal moral worth of any human being for the convenience of another.

V Conclusion This chapter has developed how due diligence as a practice can assist in fulfilling the problem-​solving function of the Energy Transition Principles. This chapter has shown that due diligence is in fact central to the implementation of each of the Energy Transition Principles. It has then been shown that due diligence can and should be understood not through a lens of fault typically associated with an adjudicatory perspective of international law. Rather, due diligence is a tool for problem solving when it is integrated into a commons governance perspective 85 General Comment No 3 (1990) on the Nature of States Parties’ Obligations (art 2, para 1 of the Covenant), UN Doc E/​1991/​23, 9. 86 Paris Agreement, recital 11. 87 See ch 3. 88 See Antony Anghie, ‘Time Present and Time Past: Globalization, International Financial Institutions, and the Third World’ (2000) 32 NYU JILP 243, 248; see also Ernst Ulrich Petersmann, International Economic Law in the 21st Century, Constitutional Pluralism and Multilevel Governance of Interdependent Public Goods (Hart Publishing 2012) 73 (taking a different approach to reach the same conclusion); Desierto (n 35) 158–​61 (arguing for an approach that does not integrate international human rights law into international human rights law ‘but rather . . . show[s]‌ways by which States Parties to the ICESCR can feasibly integrate their compliance with obligations under the ICESCR and treaty obligations within international trade, finance, and investment law in IEL’). 89 Desierto (n 35) 158–​61. Such consistency with human dignity does not require a full integration of human rights norms, as Diane Desierto convincingly argues. 90 Notably, human dignity is a purposefully ambiguous concept in human rights law so as to allow a multiplicity of different ethical foundations. See Paolo Carozza, ‘Human Dignity’ in Dinah Shelton (ed), The Oxford Handbook of International Human Rights Law (OUP 2013) 345, 348. Even on this pluralist footing, dignity informs how human rights law views the conditions in which human being live—​the right to housing, food, work, social security, culture, etc. ibid 355–​56. As Paolo Carozza notes, dignity here can have a load-​bearing function as ‘[i]‌nterestingly, although the American Convention on Human Rights only protects economic and social rights very weakly, the Inter-​American Court has attached a robust notion of dignity to its interpretation and application of the right to life that allows that right to include a guarantee of the minimal socio-​economic conditions for a life lived with dignity’.

Conclusion  271 of correlative rights and reasonable use. Due diligence in this context helps to establish what use is reasonable. It further helps to strengthen governance of the common pool resource by means of a cooperative engagement between different stakeholders. The due diligence discussion has shown how such due diligence can embed the Energy Transition Principles developed in Part II in a concrete decision-​making matrix. It showed in particular that due diligence can overcome the potential of fragmentation within the Energy Transition Principles by making decisions in the context of specific projects and policies in light of particular information. It argued that this understanding of due diligence mutually reinforced the quality of decision-​making precisely because each decision could look to the experience of past decisions and could further exchange with foreign counterparts. What emerged in this chapter is a practice of due diligence as reasonable preparedness. This practice of due diligence is the tool to implement the constitutive framework of governance through bottom-​up governance networks premised in a correlative rights lens. Due diligence links the goals of Part I with the principles developed in Part II. It does so without sacrificing flexibility or falling prey to arbitrariness because it can constantly ground decisions in a process of constant verification and communication. This chapter ended by noting that due diligence alone does not suffice to implement the Energy Transition Principles. Rather, what is needed is active stakeholder engagement to strengthen the authority and sustainability of energy transition decision-​making. The next chapter will address these concepts as the next step in the implementation of the Energy Transition Principles developed so far.

14

Stakeholder Engagement I Introduction Chapter 13 outlined the role of due diligence and reasonable preparedness in decision-​making as a core practice to the successful fulfilment of energy transition goals. It ended with a question—​how can the Energy Transition Principles assist in building broad support for the implementation of energy transition policies? The answer to this question is to increase the agency of particularly affected groups in energy value chain decision-​making during energy transition. Stakeholder engagement, like due diligence, is a thread anchoring the weave of the Energy Transition Principles in application. Energy transition requires buy-​in for the problem solutions proposed by policy-​makers as a result of diligent decision-​ making processes. This stakeholder engagement further focuses policy-​making on the specific context in which energy transition policies are made and implemented. Problem solutions therefore must work for and with the stakeholders whom they most immediately and most intimately affect. The process of gathering, evaluating, and acting on information discussed in Chapter 12 cannot be a technocratic exercise of meeting checklist requirements. It is not a matter of impersonal computation. Due diligence must engage and ­empower stakeholders rather than treat stakeholders—​people—​as statistical inputs. This chapter addresses this concept of stakeholder engagement. It begins with a working definition of stakeholder engagement. It then situates stakeholder engagement in the Energy Transition Principles outlined in Part II. This chapter then develops how such stakeholder engagement must be conducted. The chapter focuses on three distinct aspects of stakeholder engagement: (1) consultation; (2) transfer; and (3) autonomy. The chapter ends by explaining how such stakeholder engagement improves the authority of energy transition decisions. This authority is central to the ability of states to rely on civil society to govern from the bottom up to achieve goals collectively within the specific social contexts in which these decisions are made. The chapter here will draw on two contrasting examples to showcase the importance of such social capital. The first is the introduction of energy policies by the French government that led to the yellow vest movement. The second is the achievement of

274  Stakeholder Engagement the goals of the US federal Clean Power Plan, despite political efforts to dismantle it and judicial orders stopping its implementation before it could take effect. In one instance, social capital defected from policy-​making. In the other, it supported policy-​making. This underscores that bottom-​up law-​making and problem solving is only as robust as the social authority it can muster in its own support. The means by which legal processes aim to build such stakeholder support is stakeholder engagement.

II  Stakeholder Engagement and the Energy Transition Principles The phrase ‘stakeholder engagement’ sounds technocratic. It is certainly a reasonably novel phrasing with somewhat imprecise meaning. Just like the term ‘due diligence’, stakeholder engagement also is reasonably ubiquitous. It is therefore helpful again to begin with a working definition. Engagement or ‘to engage’ relevantly means ‘to induce to participate’.1 To add to the working definition, a stakeholder is ‘one who is involved in or affected by a course of action’.2 Putting the elements together, a working definition of stakeholder engagement means to induce people involved in or affected by a course of action to participate in it. It requires, first, that affected groups and individuals must be identified in due diligence before any engagement can occur. It means, secondly, that the person engaging others carries a burden: to ‘induce’ means more than to invite, it requires an active overcoming of a certain natural suspicion.3 It means, thirdly, that engagement requires more than polite listening by the engaging party. To participate means to ‘to take part’ or ‘to share in something’.4 Working definition of stakeholder engagement States and companies participating in energy value chains must identify affected groups and individuals in due diligence. States and companies participating in energy value chains have the burden actively to induce affected persons and people to participate in decision-​making.   



States and companies participating in energy value chains must take the contributions of affected persons and people into account in decision-​making.

1

Merriam-​Webster, ‘engage’, definition 6b. ibid ‘stakeholder’ definition 3. 3 ibid ‘induce’ definition 1a (‘to move by persuasion or influence’). 4 ibid ‘participate’, definition 2a, 2b. 2

Stakeholder Engagement and Energy Transition Principles  275

A  Climate and Environmental Law The climate and environmental Energy Transition Principles require stakeholder engagement in the sense of requiring policy-​makers to induce people affected by a policy or project to participate in it. This obligation is most visible in the context of Energy Transition Principle 22, Participation in Environmental Decision-​ making.5 This principle on its face requires ‘participation’—​one of the elements of the working definition of stakeholder engagement. Environmental sustainability requires active consultation of affected groups and persons as part of its constitutive instruments.   

The formal climate regime currently has a stakeholder engagement deficit that should be rectified.

Climate law does not have a free-​standing Energy Transition Principle requiring participation. The reason for this absence is that the core organizing principle for the global advancement of climate law—​the conference of the parties under the UNFCCC and Paris Agreements—​is open only to states. The core organ of climate law therefore is driven by state policy-​making. This is an important shortcoming of the climate regime. Despite this circumstance, significant practice has developed in the shadow of the conference of the parties that actively engages stakeholders. There is a significant effort at polycentric climate governance.6 The Glasgow Climate Pact makes express the importance of stakeholder engagement to the evolving process of implementing the Paris Agreement. It ‘recognizes the important role of non-​Party stakeholders, including civil society, indigenous peoples, local communities, youth, children, local and regional governments and other stakeholders, in contributing to the progress towards the goals of the Paris Agreement’.7 Even here, the relationship between stakeholder engagement and the Paris Agreement remains formally distant and stops short of including stakeholder engagement in the process of climate decision-​making itself. The climate regime therefore continues to have a stakeholder engagement deficit.

B  Human Rights Law Human rights law requires stakeholder engagement throughout. Stakeholder engagement as inducement to participate is central in the context of energy equity

5

Energy Transition Principle 22; ch 10. Daniel Bodansky and others, International Climate Change Law (OUP 2017) 292–​93. 7 Glasgow Climate Pact (CMA.3), 88. 6

276  Stakeholder Engagement and the right to energy (Energy Transition Principle 9).8 In addition, participation is also a corner stone of energy community governance (Energy Transition Principle 28) and the inclusion of indigenous peoples in energy decision-​making (Energy Transition Principles 29, 30, and 31).9 The right to energy requires active consultation of affected groups and persons in the formulation of energy policy. Human rights law generally require such active stakeholder engagement as part of its constitutive instruments.   

The reason for the centrality of stakeholder engagement in the human rights setting has been amply discussed in previous chapters.10 The underlying logic is best expressed in the Draft Convention on the Right to Development.11 It ties development to the ability to participate fully in decision-​making. As discussed in section III, this notion of participation is central for a successful implementation of energy transition policies.

C  Energy and Economic Law Energy and economic law similarly are driven by stakeholder engagement. As in the context of other areas of discussion so far, the Energy Transition Principles expressly include participation in Energy Transition Principle 15 in the context of energy security.12 Participation is key to the understanding of energy security. Energy security and the right to energy require active consultation of affected groups and persons as part of its constitutive instruments.   

Active stakeholder engagement is a core part of economic and energy law project documents in almost every energy industry context.

Stakeholder engagement in energy and economic law goes beyond the principle of participation in the energy security context. Rather, stakeholder engagement is a core part of project documents in almost every energy industry context.13

8 Energy Transition Principle 9; ch 8. 9 Energy Transition Principles 28–​30; ch 11. 10 See chs 8, 11. 11 Convention on the Right to Development (Draft 2), art 4(2) comment B1. 12 Energy Transition Principle 15; ch 9. 13 Peter D Cameron and Michael C Stanley, Oil, Gas, and Mining: A Sourcebook for Understanding the Extractive Industries (World Bank 2022) 268–​69.

Stakeholder Engagement and Energy Transition Principles  277 Similarly, stakeholder engagement is also a core function of mining projects in the energy value chain.14 Stakeholder engagement is central to how energy projects are implemented and constitutive of how energy value chains form and govern themselves.15 Here, as in the context of other areas of application of the Energy Transition Principles, stakeholder engagement is a part of and an extension of due diligence.

D  The Relationship between Stakeholder Engagement and Due Diligence (1) Two Visions of Due Diligence There are two visions of due diligence, both with different implications for stakeholder engagement. The first vision is starkly technical. Reasonable preparedness gathers information and projects risk scenarios; it proposes plans to mitigate risk, it monitors performance, and it adapts to performance. This description of reasonable preparedness developed in Chapter 12 on its face is consistent with a purely algorithmic function. A machine could collect the information, calculate risks, devise plans to reduce risk in the most efficient manner, monitor performance, and learn from mistakes. In fact, given the size of data sets involved in cross-​cutting climate, environmental, energy, economic, and human rights due diligence, this task may appear particularly well-​suited to big data analytics.16 Due diligence could describe a purely algorithmic function of data analytics.   

This vision of due diligence sees risk mitigation as predominantly an engineering task. The question is to align actual outputs as closely as possible to desired outcomes. If not quite the matter of machines, this is a task for experts. These

14 Jennifer Loutit and others, ‘Emerging Practice in Community Development Agreements’ Columbia Center for Sustainable Development Briefing Note (February 2016); Ciaran O’Faircheallaigh, ‘Community Development Agreements in the Mining Industry: an Emerging Global Phenomenon’ (2013) 44 Community Development 222. 15 For a perspective of how this process overlaps with regulatory compliance and corporate law see Hari M Osofsky and others, ‘Energy Re-​Investment’ (2019) 94 Indiana LJ 595; Brett McDonnell and others, ‘Green Boardrooms?’ (2021) 53 Connecticut LR 335. 16 For a summary of the use of artificial intelligence in energy transition policy efforts, see Espen Mehlum, Dominique Hishier, and Mark Craine, ‘This Is How AI Will Accelerate Energy Transition’ World Economic Forum (1 September 2021) https://​www.wefo​rum.org/​age​nda/​2021/​09/​this-​is-​how-​ ai-​will-​acc​eler​ate-​the-​ene​rgy-​tra​nsit​ion/​. For a command vision of energy transition that is largely consistent with such an algorithmic approach see Peter Drahos, Survival Governance: Energy and Climate in the Chinese Century (OUP 2021).

278  Stakeholder Engagement experts apply state-​of-​the-​art methods. The outcomes are the objectively best one can do under the circumstances.17 The second vision of due diligence does not look at risks in their own right. Rather, reasonable preparedness is preparedness for something. This something, at its core, is human flourishing.18 The reason to engage in due diligence is to respect, protect, and fulfil the capability for human flourishing.19 Due diligence is not a data analytics function but a means to respect, protect, and fulfil the capability for human flourishing.   

Due diligence in this second vision is intensely about people. It is not principally about risk projections. It is not chiefly about achieving mitigation outcomes. Reasonable preparedness, instead, is a tool to secure as best as is possible the material conditions for human well-​being. Due diligence in this second sense is not an engineering task, at all. Reasonable preparedness is a vision of human empowerment to best the vagaries of fortune through ingenuity, effort, and human cooperation.20 Due diligence, in short, is humanist endeavour first and a technical task second. If due diligence is part of this second meaning, then stakeholder engagement is its most vital mission. Reasonable preparedness is immediately about empowering the affected to overcome adversity. This mission can only be successful if affected people are invited and enabled to see themselves as agents in a common enterprise to turn back a potentially existential threat. On the one hand, there are many reasons to prefer the second vision of due diligence to the first. Pragmatically, technical solutions to energy transition tend to fail to achieve the planned goals. Solutions that empower people, on the other hand, can overcome formidable political obstacles. This pragmatism alone should strongly support a choice of the second vision. However, the moral reason is the more compelling. Energy transition should not turn people into a computational input to achieve grandiose ends. A mechanical approach would fall into precisely that trap—​people and their lives and livelihoods would be figures to be plugged

17 For a discussion of such a ‘technoscientific’ approach to due diligence as one interpretation of due diligence in international law see Samantha Besson, La due diligence en droit international (Brill 2021) 154–​65. 18 Aristotle, ‘Nicomachean Ethics 1097b7-​21’ in Jonathan Barnes (ed), The Complete Works of Aristotle: The Revised Oxford Translation, vol 2 (PUP 1984) 1734–​35. 19 This is the vision presented by Martha Nussbaum and Amartya Sen, among others. See Martha C Nussbaum, Creating Capabilities: The Human Development Approach (HUP 2011) 32; Amartya Sen, The Idea of Justice (HUP 2009) 253. 20 JGA Pocock, The Machiavellian Moment, Florentine Political Thought and the Atlantic Republican Tradition (PUP 2003) 108, 115–​16. The discussion in question is in the context of different visions of civic organization as a bulwark against fortune.

Stakeholder Engagement and Energy Transition Principles  279 into complex computations about potential pathways. They would no longer be people first. The human vision places people as people at the heart of the enterprise of preparing and implementing energy transition pathways. It rests in a respect for human dignity and in a faith in the human capability jointly to see through the largest task of global coordination to date.21

(2) Stakeholder Engagement in Conducting Due Diligence Naturally, the second vision of due diligence has a significant impact on the understanding of how due diligence is practised. It anchors all phases of due diligence in consultations with affected groups. This consultation serves two purposes. First, consultation helps to gather data. To understand likely social impacts requires an engagement with people. Stakeholder engagement here serves understanding (or an epistemic function). Secondly, consultation also empowers affected people. The point is not just to gather information from affected people. It is also to induce them to participate in solving problems.22 Due diligence becomes a dialogue that itself builds capabilities to support concerted human action.23 Both functions together inform what it means to ‘consult’ throughout the due diligence process. Consultation fairly suffuses the entire due diligence process to strengthen the base for decision and the quality of decision-​making. Stakeholder engagement in this sense is simply a different aspect of the diligence exercise. (3) Stakeholder Engagement in Implementing Due Diligence Stakeholder engagement also reaches beyond due diligence. It is a tool to create better conditions on the ground, including new economic realities, transfers of technology, and local capabilities. Stakeholder engagement leads to tangible development outcomes. One of the chief tools of achieving this transfer is the conclusion of community development agreements discussed further below. Stakeholder engagement further provides tools for greater autonomy by increasing governance capacity.24

21 Some consider this hope to be naïve. SeeAlessio Terzi, Growth for Good: Reshaping Capitalism to Save Humanity from Climate Catastrophe (HUP 2022). The underlying hope may well be naïve—​but it is certainly not entirely misplaced. It is a matter of displacing competition (megalothymia) by equal dignity (isothymia) through the creation of a new, shared, and overlapping identities. Francis Fukuyama, Identity: The Demand for Dignity and the Politics of Resentment (Farrar, Strauss & Giroux 2018) 22, 182–​83. 22 On both functions in the administrative law context see Nicholas Bagley, ‘Remedial Restraint in Administrative Law’ (2017) 117 Columbia LR 253, 265. 23 See Convention on the Right to Development (Draft 2), arts 3(a), 4(2). 24 See Francis Fukuyama, Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy (Farrar, Straus & Giroux 2014) 522–​23 (‘A properly autonomous bureaucracy is not one that is walled off from citizens, but rather on that Peter Evans described as “embedded” in society and responsive to its demands. This constitutes a high-​level equilibrium in which trust in government begets effective government, which in turn increases trust on all sides’).

280  Stakeholder Engagement

III  The Content of the Practice of Stakeholder Engagement A  The Practice to Consult Consultation of affected people and peoples is one of the cornerstones of stakeholder engagements. It is also a central requirement of several Energy Transition Principles, as discussed above. The discussion so far can help in identifying the challenges for consultation and best practices in conducting consultations as a part of stakeholder engagement. As discussed in the context of community governance in Chapter 11, community participation currently is at the core of ESG standards and forms part of several mandatory processes such as the IFC performance standards.25 They include consultation requirements in ordinary due diligence processes.26 These processes are also part of domestic statutory requirements in the context of due diligence processes for new policy initiatives.27 These processes can represent a double-​ edged sword. That is, they aim for the right outcomes.28 They nevertheless run the risk of being perceived in light of the technocratic vision of due diligence.29 Such an impression, even and particularly in circumstances in which the impression is a function of a broader distrust that may not be limited to a particular policy or project, can critically undermine the effectiveness of consultation. One project that exemplifies the dangers of this dynamic is the Conga copper-​ gold project in Peru.30 (The project is of relevance to energy transition as copper is an important energy value chain input.31) The Conga project followed IFC performance standards discussed already and was subject to robust diligence requirements.32 The project nevertheless failed to enter into commercial operations, after

25 IFC Performance Standard 1, Assessment and management of environmental and social risks and impacts (1 January 2012); IFC Performance Standard 4, Community health, safety, and security (1 January 2012); IFC Guidance Note 5, Land acquisition and involuntary resettlement (1 January 2012); IFC Performance Standard 7, Indigenous peoples (1 January 2012); Draft Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractives Sector, OECD (April 2015). 26 IFC Performance Standard 1 (n 25) 3, 7. 27 For a summary of US administrative practice under the National Environmental Policy Act (NEPA) see ‘Community Guide to Environmental Justice and NEPA Methods’ US Federal Interagency Working Group on Environmental Justice & NEPA Committee (March 2019) 12–​18. On the global influence of NEPA see Neil Craik, ‘The Assessment of Environmental Impact’ in Emma Lees and Jorge Viñuales (eds), The Oxford Handbook of Comparative Environmental Law (OUP 2019) 876, 878–​80. 28 IFC Performance Standard 1 (n 25) 1. 29 Besson (n 17)154–​65. 30 ‘Newmont Board Approves Conga Project in Peru and Tanami Shaft Project in Australia’ Newmont (27 July 2011) https://​www.newm​ont.com/​invest​ors/​news-​rele​ase/​news-​deta​ils/​2011/​Newm​ont-​ Board-​Appro​ves-​Conga-​Proj​ect-​in-​Peru-​and-​Tan​ami-​Shaft-​Proj​ect-​in-​Austra​lia/​defa​ult.aspx. 31 Stéphanie Bouckaert and others, Net Zero by 2050: A Roadmap for the Global Energy Sector (4th edn, IEA 2021) 23. 32 See ‘Compliance Appraisal: Summary of Results, Yanacocha’ (IFC Project #2983, 4449, 9502) Compliance Advisor Ombudsman (22 October 2018) http://​www.cao-​ombuds​man.org/​docume​nts/​ CAOComplia​nceA​ppra​isal​Yana​coch​a11_​ENG.PDF.

Content of the Practice of Stakeholder Engagement  281 a delay of more than seven year, due to significant indigenous people resistance.33 The reason was partly historical—​the Conga project was to be sited near a place of historical significance, the murder of Incan emperor Atahualpa by the Spanish, giving the project quasi-​colonial connotations.34 The underlying issues faced by the operator in the context of the Conga mine project far preceded the specific development at issue. However, stakeholder engagement failed to induce affected people to have a sense of ownership over the ultimate project. This is not a lone example. Another example is the Jadar lithium project in Serbia.35 Lithium is another critical mineral for energy transition.36 The Jadar project was licensed to Rio Tinto by a strongly supportive government.37 Rio Tinto has a strong ESG and due diligence programme requiring significant due diligence consistent with IFC performance standards.38 The Jadar lithium project nevertheless faced local community opposition.39 The Serbian government revoked project licences ahead of elections.40 The reason for the opposition again had to do with location—​Jadar was located close to Loznica in western Serbia.41 The area has a rich agricultural history (Loznica evokes viticultural connotations of ‘small vine’ in Serbian).42 The project therefore stands to disrupt entrenched communal understandings.43 The project reportedly also fits in a broader distrust of multinational mining companies in rural Europe.44 The project therefore had

33 Cecilia Jamasmie, ‘Newmont Expects to Pull Trigger on $2bn Peru Gold Project Mid-​Year’ Mining.com (11 May 2022) https://​www.min​ing.com/​newm​ont-​expe​cts-​to-​pull-​trig​ger-​on-​2bn-​peru-​ proj​ect-​mid-​year/​. 34 ‘Peru: The Curse of Inca Gold’ Public Broadcasting Service (October 2005) https://​www.pbs.org/​ fro​ntli​newo​rld/​stor​ies/​peru​404/​thest​ory.html. 35 For a summary of project developments see Jadar, Rio Tinto, https://​www.rioti​nto.com/​en/​ope​rati​ ons/​proje​cts/​jadar. 36 Dolf Gielen and Martina Lyons, Critical Materials for the Energy Transition; Lithium (IRENA 2022). 37 Jadar (n 35). 38 See ‘Rio Tinto Ltd’ Sustainalytics https://​www.sus​tain​alyt​ics.com/​esg-​rat​ing/​rio-​tinto-​ltd/​100​ 8740​749/​ (rating Rio Tinto’s management of ESG issues as ‘strong’); Strategic Report 2020, Rio Tinto (2020) https://​www.rioti​nto.com/​-​/​media/​Cont​ent/​Docume​nts/​Inv​est/​Repo​rts/​Ann​ual-​repo​rts/​RT-​ ann​ual-​rep​ort-​strate​gic-​2020.pdf?rev=​78cc9​8741​2034​fc38​b0ec​2736​1c10​07e. 39 Radomir Ralev, ‘Serbia May Call Referendum on Rio Tinto’s Jadar Lithium Project –​Vucic’ Seenews.com (17 May 2020) https://​seen​ews.com/​news/​ser​bia-​may-​call-​ref​eren​dum-​on-​rio-​tin​tos-​ jadar-​lith​ium-​proj​ect-​vucic-​743​785. 40 The licence is a political issue. See Cecilia Jamasmie, ‘Serbian Elections Could Improve Chances for Rio Tinto’s Lithium Project’ Mining.com (1 April 2022) https://​www.min​ing.com/​serb​ian-​electi​ons-​ could-​help-​rio-​tinto-​save-​lith​ium-​proj​ect-​anal​yst/​; Cecilia Jamasmie, ‘Rio Tinto Hunts for Lithium Deals, Eyes Jadar Revival’ Mining.com (13 December 2022) https://​www.min​ing.com/​rio-​tinto-​hunts-​ for-​lith​ium-​deals-​eyes-​jadar-​revi​val/​. 41 Jadar (n 35). 42 Loznika made an appearance in a different international context in 2014 when its agricultural sector received support from the Food and Agricultural Organization of the United Nations following significant spring floods. ‘Donors Lend Support to Serbia’s Flooded Farms’ FAO Regional Office for Europe and Central Asia (12 September 2014) https://​www.fao.org/​eur​ope/​news/​det​ail-​news/​en/​c/​ 271​839/​. 43 Morgan Meaker, ‘Europe’s Biggest Lithium Mine Is Caught in a Political Maelstrom’ Wired (2 April 2022) https://​www.wired.com/​story/​ser​bia-​eur​ope-​lith​ium-​min​ing-​elect​ric-​cars/​. 44 ibid.

282  Stakeholder Engagement to contend with community concerns that go beyond the specifics of the Jadar mine itself. The Conga and Jadar projects provide some helpful data points because by all accounts they should have been successful in obtaining local community support through stakeholder engagement but were not. Despite robust diligence efforts by market leaders following IFC performance standards, both projects were met with sizeable community resistance.45 Both contexts suggest that project stakeholders (including notably the governments of Peru and Serbia) did not engage sufficiently with local communities in understanding what impacts to measure and to prevent. Even following global best due diligence practices with the best of intentions runs into difficulty when projects cannot garner significant community support through meaningful early engagement. Following state-​ of-​ the-​ art stakeholder engagement performance standards does not guarantee stakeholder engagement success.   

It is fair to suspect that due diligence failed in part because of the perception of that consultations followed what Samantha Besson describes as ‘technoscientific’, ‘checklist’ approach.46 Given the predominance of such approach in the current international legal understanding of due diligence in general, the two project examples suggest a more fundamental problem—​a technoscientific, checklist approach to consultation does not consistently yield results. This problem is going to have an outsized impact on the implementation of energy transition policies: such policies need to both create new energy value chains relying on new mining projects and need to add to and change the global physical energy infrastructure. Both tasks risk facing the kind of community resistance seen in the context of the Jadar and Conga projects. Treating consultation as a practice can help to improve outcomes. ‘Stakeholder engagement’ aims to induce affected persons to participate in a project. Consultations are the first contact between a policy-​maker or a project company and affected people. Consultations then become the first line of communication between policy-​makers or a project company and affected people thereafter. The practice of consultation can be measured against two outcomes. The first is how successful consultation is at inducing affected people to join consultation processes. One of the breakdowns in the examples of Conga and Jadar was that the project spilled from consultation processes to the larger political arena in which



45 46

See below. Besson (n 17)154–​65.

Content of the Practice of Stakeholder Engagement  283 protests and campaigning overshadowed the due diligence consultation process.47 It is impossible to say so with certainty, yet the impression is that affected people feared that they would not be taken seriously in the consultation processes. They doubted their ability to be meaningfully consulted and therefore took their contributions and concerns to different fora that they believed to be more effective. Consultation can overcome this obstacle only by building trust in the consultation process itself. To induce another act requires one to understand the other. This means that consultation must in the first place understand and engage with the local social processes. This is a preliminary process that can take a long time, but it may be the best approach to achieve positive outcomes. It can do so for example by engaging with community interests long before the consultation is due, to understand the needs and concerns of the consulted part. Also, an effective strategy may be transparently engaging with leaders in these local processes to help design consultation approaches. This in turn can reduce social tensions surrounding consultation and increase the initial trust in the process of consultation itself. A misunderstanding or external imposition on top of these processes can prove dangerous for the consultation processes themselves—​even if the same processes proved successful in different contexts or yielded a formal positive result.48 Successful consultations are based in an understanding and engagement with the local social map beyond core political and social decision-​makers.   

Consultation second must yield outcomes that are actually participatory. It is possible to exploit social processes to achieve short term results (such as gaining project approvals from favourable government officials or local power centres).49 This short-​term success can, however, undermine the very structures that can improve social governance interactions in the future by eroding trust in social structures over time.50 Consultation, therefore, is only going to be successful as a conduit for engagement to the extent that it builds successful results for those who join in the process. Viewed through this lens, consultation cannot apply a rigid checklist from project to project. Such an approach would miss the importance of social context in 47 Meaker (n 43); ‘Peru Governor to Seek Re-​Election, Fight Gold Project from Prison’ Reuters (30 June 2014) https://​www.reut​ers.com/​arti​cle/​uk-​peru-​newm​ont-​san​tos/​peru-​gover​nor-​to-​seek-​re-​elect​ ion-​fight-​gold-​proj​ect-​from-​pri​son-​idUKKB​N0F5​2EO2​0140​630. 48 For a discussion of this theme in a different context see Robert D Putnam, Making Democracy Work: Civic Traditions in Modern Italy (PUP 1993). 49 For a discussion of the problematic side of community engagement see Daniel C Mattingly, The Art of Political Control in China (CUP, 2020). Mattingly builds on Putnam’s work and studies the manner in which understanding social processes can support both mechanisms for inducing participation and for exercising control. 50 Daron Acemoglu and James Robinson, The Narrow Corridor: States, Societies, and the Fate of Liberty (Penguin 2020) 33–​73.

284  Stakeholder Engagement which consultations must occur.51 By not taking social context seriously, some such checklist approaches can exacerbate mistrust and contribute to an ‘us/​them’ dichotomy that yields full-​scale partisan political responses.52 A practice of consultation is goal-​oriented. It therefore adapts the consultation process to local context. As it builds upon success within a consultation process, it strengthens the process itself. Further, it can also adjust for small failures within the consultation process. The practice of consultation therefore can learn from mistakes in a specific setting. The practice of consultation further is a humanist rather than a technoscientific enterprise. It does not look at a technical process of engagement. Rather, it places the human first. As it builds upon success, it can increase its perceptibility of how to identify social structures and to induce participation from these social structures towards policy goals. This practice of consultation therefore goes hand in hand with the idea of autonomy discussed below. This link between consultation and autonomy replicates the insistence in the development context that development is only possible when there is full, active, and meaningful participation in development policy-​making itself, as well as in the distribution of its proceeds.

B  The Practice to Transfer As the discussion of consultation has already made clear, the process of consultation is not enough to constitute stakeholder engagement. In the first place, ‘[w]‌e want government to do things, not just decide things—​to educate children, pay pensioners, stop crime, create jobs, hold down prices, encourage family values, and so on’.53 This expectation of governmental policy applies with more force in the energy transition context. It also applies to project performance in the context of projects that contribute to energy value chain. In order to achieve energy transition, these outcomes require transfers both internationally and domestically. The Glasgow Climate Pact ‘urges developed country Parties to provide enhanced support, including through financial resources, technology transfer and capacity-​building, to assist developing country Parties with respect to both mitigation and adaptation, in continuation with their existing obligations under the Covenant and the Paris Agreement, and encourages other Parties to provide or continue to provide such support voluntarily’.54 51 This is one of the key takeaways from Putnam’s work. The same governance structures implemented in the same country (Italy) proved successful in some regions and less successful in others. Putnam (n 48)87. Such social mapping is already part of best practices in the community development agreement context. James Otto, Community Development Agreement, Model Regulations and Example Guidelines (World Bank 2010). The question is the extent to which such practices are successfully implemented. 52 Carl Schmitt, Der Begriff des Politischen (Hanseatische Verlagsanstalt 1933). 53 Putnam (n 48)9. 54 Glasgow Climate Pact (CMA.3), 40.

Content of the Practice of Stakeholder Engagement  285 The Glasgow Climate Pact links this objective to ‘the importance of strengthening cooperative action on technology development and transfer for the implementation of mitigation and adaptation action, including accelerating, encouraging and enabling innovation, and the importance of predictable, sustainable and adequate funding from diverse sources from the Technology Mechanism’.55 The Paris Agreement, in turn, ‘recognize[s]‌the importance of integrated, holistic and balanced non-​market approaches being available to Parties to assist in the implementation of their nationally determined contributions, in the context of sustainable development and poverty eradication, in a coordinated and effective manner, including through, inter alia, mitigation, adaptation, finance, technology transfer and capacity-​building, as appropriate’.56 The Paris Agreement addresses this goal through the creation of a technology mechanism.57 In practice, one of the main means in which such transfers both of development support and of technology actually occur is through projects agreements—​and in the context of project agreements, through community development agreements. Community development agreements are the principal tool through which consultation results are implemented on the project level in binding project documents.58 Such community development agreements therefore are one of the, if not the, principal tool actually to achieving rather than merely recognizing the importance of specific outcomes.59 Community development agreements implement the result of consultations in project-​affected communities and transfer means to achieve outcomes to affected communities.   

Community development agreements modify the base case created by a new project. Irrespective of a community development agreement, a new project will itself create economic opportunities in the form of fiscal revenues.60 It further will create employment opportunities (for example, in jurisdictions including local content requirements in projects contracts in the extractive and energy industries).61 Depending upon the economic conditions before a project commences, 55 ibid 60. 56 Paris Agreement, art 6(8). 57 ibid art 10. 58 IFC Performance Standard 1 (n 25) 13-​14. 59 On the relative importance of community development agreements as a governance tool in the extractive industry setting see James Gathii and Ibironke Odumosu-​Ayanu, ‘The Turn to Contractual Responsibility in the Global Extractive Industry’ (2015) 1 Business & Human Rights J 69, 85–​90. 60 Otto (n 51) 78. 61 On local content requirements in the oil and gas industry see King & Spalding LLP, Upstream Government Petroleum Contracts, A Practitioner’s Guide to Concessions, Production Sharing Contracts, and Risk Services Agreements (Juris 2017) 176–​79; for a discussion of the relevance of local content requirements from oil and gas contracts in extractive industries, see Cameron and Stanley (n 13) 74.

286  Stakeholder Engagement the project can also create an opportunity for a services sector to develop around the project to support both the project (eg repair services, etc.) and project workers (eg markets or grocery stores).62 These project impacts both disrupt existing structures and provide economic opportunity. In most of the cases, they do not suffice on their own to create sustainable development opportunities for affected communities. Community development agreements attempt to bridge the gap between a project’s net impacts on the one hand and the affected community’s sustainable development on the other hand. The goal of a community development agreement extends the goal of community consultation: ‘achiev[ing] a stable base of local support for the project’ and ‘contribut[ing] to local economic and social development’.63 Community development agreements are not supposed to support economic and social development alone. Instead, they form part of a broader policy development framework and need to be integrated into such a framework.64 Community development agreements continue and formalize consultations including through grievance mechanisms.   

Community development agreements formalize the consultative stakeholder engagement process and provide a grievance mechanism.65 As a matter of immediate transfer, community development agreements provide tangible benefits to the local community affected by energy transition projects such as educational facilities, infrastructure investment, etc.66 Community development agreements therefore provide some of the tangible benefits typically associated with governmental activity.67 These transfers alone are not enough to achieve the goal of community development agreements. These transfers are ‘paternalistic contributions’ only.68 As such, they have an ambivalent relationship to community participation. Community development agreements must look beyond paternalist contributions to enhance the social wellbeing of communities through development programme plans.   

62 Such opportunities arise to the extent that there is a baseline from which such a business could expand. If a project is not associated with any existing infrastructure to speak of, companies tend to contract for such services externally. 63 Boubacar Bocoum et al., Mining Community Development Agreements Source Book (World Bank 2012) 10. 64 ibid 59. 65 ibid 52. 66 Cameron and Stanley (n 13) 268–​69. 67 Putnam (n 48)9. 68 Otto (n 51) 78.

Content of the Practice of Stakeholder Engagement  287 Instead of focusing on ‘paternalistic contributions’, the object of a community development agreement is ‘to enhance the sustainable social, cultural and economic well-​being of communities impacted by [project] operations’.69 The most important substantive component of a community development agreement is the community development programme plan.70 One of the central features of this plan is ‘assistance in creating self-​sustaining, income-​generating activities, such as but not limited to, the production of goods and services needed by the [project] and the community’.71 This part of the community development programme is implemented by means of a sustainable investment plan.72 Viewed together with the project, community development agreements create the economic infrastructure surrounding the new project. Beyond these immediate project-​ specific needs, projects can also create broader opportunities for economic development that are less directly related to the project itself. For example, the infrastructure-​base supporting a mining project could not just serve also to support project-​related repair services and grocery stores etc. It could also support economic activity like manufacturing that would benefit from a similar infrastructure footprint already present to support mining activity. Such opportunities are not always included in development programmes guidelines.73 Economic diversification is critical to community development.   

Despite not being included in community development agreements as a matter of course, such economic diversification is critical to achieving the goal of sustainable community development.74 Without such diversification, the community is rendered entirely dependent on the project: projects typically disrupt and potentially displace prior economic and social structures.75 This means that there is little economic or social resilience in case of a project downturn or at its conclusion. Such dependence is developmentally undesirable, meaning that project community planning should consider local economic resilience as an important factor.

69 ibid 59. 70 ibid 60. 71 ibid 61. 72 Mining Community Development Agreements Source Book (World Bank, 2012) 51–​54. 73 Otto (n 51) 61. 74 See Amartya Sen, Development as Freedom (Anchor Books 1999) 177 (discussing the importance of diversification in the food context). 75 Such disruption does not need to lead to a net negative for local communities. Rather, to the extent that there is careful planning, such projects are a net developmental positive. The problem thus arises when there is insufficient planning. See Kathryn McPhail, ‘How Oil, Gas, and Mining Projects Can Contribute to Development’ (2000) 37 Finance and Development (International Monetary Fund) 4.

288  Stakeholder Engagement Energy transition policy must support economic diversification at the national and global level and not just at the project level.   

Economic diversification is of critical importance not just at the local project level, but on the national and international levels, as well. Here, the logic of community development agreements as means to create tangible outcome from consultations should be carried forward to the implementation of new global energy transition policies that are aimed at achieving a just transition to global net zero at or around mid-​century, as contemplated by the Glasgow Climate Pact.76 Economic diversification is one of the central goals of the global energy transition process.77 Such economic diversification is central to the nationally determined contributions (NDCs) submitted by a significant number of developing states under the auspices of the Paris Agreement.78 Economic diversification is needed to achieve mitigation goals in their own right as indicated in the NDCs themselves. Just as importantly, economic diversification is needed in order to protect national economies from the significant coming global disruptions created by energy transition processes. These processes introduce significant disruptive and destructive force, creating a new economic paradigm in its wake. To withstand this disruptive force and to participate in its upswing requires a reasonably balanced, diversified economy that can internalize the shocks from disruption, as opposed to ‘melt down’ as a result. Importantly, developing economies do not diversify themselves.79 Even in the context of ‘normal’, market-​based innovation led disruption, governmental policy is critical to create conditions for a just transition to the new economic paradigm. For example, policy in resource-​rich countries can look at developing countries as a final place to ‘dump’ outdated technology and leveraging these sales to transition their own economies towards a paradigm with less labour and economic disruption.80 Such a policy can offer apparently favourable financing terms through

76 Glasgow Climate Pact (CMA.3), 32. 77 See ‘The Concept of Economic Diversification in the Context of Response Measures’ United Nations Framework Convention on Climate Change Technical Paper (2016). 78 See Saudi Arabia Intended NDC at 3 (November 2015); Congo NDC (21 April 2017); Algeria NDC (3 September 2015); Angola NDC (16 November 2020); Equatorial Guinea NDC (30 October 2018). For a detailed analysis of these NDCs, see Leonardo Sempertegui and Frédéric G Sourgens, ‘The Importance of States and the Private Oil Sector for Successfully Implementing the Energy Transition’ (2021) 67 RMMLF/​FNREL 2. 79 Resource exporting states suffer from the opposite problem (Dutch disease). See Paul Krugman, Rethinking International Trade (MIT Press 1994) 114–​15. Aid can further create similar problems. Raghuram Rajan and Arvind Subramanian, ‘Aid, Dutch Disease, and Manufacturing Growth’ (2011) 94 J Development Economics 106. 80 On this risk see Carlota Perez, Technological Revolutions and Financial Capital (Edward Elgar Publishing 2002) 65. The manner in which technology is exported is critical. It can either lay the groundwork for an adoption of the new paradigm (and a leap-​frogging) in the recipient markets or it could have the opposite effect. This is a matter on which policy planning is crucial under the current circumstances.

Content of the Practice of Stakeholder Engagement  289 state-​based export credit facilities.81 It can have the effect of entrenching innovation disadvantages in phases of economic transition. In current circumstances, energy transition increases these tensions as innovation and energy paradigm changes are policy-​rather than exclusively market-​ driven. Here, the distorting effects on diversification of national economies can become even more pronounced as domestic market access rules in capital exporting states partly determine what pathways remain open to transitional economies as global market participants.82 Such a consequence of policy interventions is inconsistent with the cooperation obligations discussed in the context of the substantive Energy Transition Principles.83 As a matter of process, their implementation requires an eye to global impacts of domestic policy-​making. This means that policy interventions driving energy transition must consider economic diversification as part of their overall design process. The logic of community development agreements therefore must be applied to policy-​making on a global stage.84 On the one hand, this means the support for economic diversification outlined in NDCs through climate and development finance.85 This financial support is already part of the substantive energy transition regime.86 On the other hand, national policy-​making must aim to distribute the global benefits and burdens of energy transition in an equitable manner.87 This means that appropriate transfer provisions, including technology transfer provisions, must also drive domestic policy-​making.88 In practical terms, states diversifying their economies to implement their NDCs need to diversify in such a way as to catch up to the innovation frontier rather than stranding state aid in doomed projects.89 Negatively, domestic policy-​making must not unrestrictedly bar access in 81 For the US agency see ‘About Exim’ https://​www.exim.gov/​about (‘When private sector lenders are unable or unwilling to provide financing, EXIM fills in the gap for American businesses by equipping them with the financing tools necessary to compete for global sales’). 82 For an excellent discussion see Jakub Bednarek, ‘Is the EU Realizing an Externally Just Green Transition? A Short Analysis of the Carbon Border Adjustment Mechanism from the Perspective of the CBDR Principle and the Right to Development of LDCs’ EJIL: Talk! (31 October 2022) https://​www.ejilt​ alk.org/​is-​the-​eu-​realiz​ing-​an-​ext​erna​lly-​just-​green-​tra​nsit​ion-​a-​short-​analy​sis-​of-​the-​car​bon-​bor​ der-​adj​ustm​ent-​mechan​ism-​from-​the-​pers​pect​ive-​of-​the-​cbdr-​princi​ple-​and-​the-​right-​to-​deve​lopm​ ent-​of-​ldcs/​. 83 See ch 7. 84 For an interesting argument in a similar direction (using social licence to operate as a starting point) see Hans Lindahl, ‘One Pillar: Legal Authority and a Social License to Operate in a Global Context’ (2016) 23 Indiana J Global Legal Studies 201. 85 For a detailed analysis of these NDCs see Sempértegui and Sourgens (n 78) 2; for a discussion of climate finance as a means to support the achievement of NDC outcomes see Alexander Zahar, Climate Finance and International Law (Routledge 2016). 86 See Glasgow Climate Pact (CMA.3), 40–​60. 87 See Convention on the Right to Development (Draft 2), art 4(2); General Comment 3, The Nature of State Parties’ Obligations (art 2, para 1 of the Covenant) (14 December 1990) 13. 88 See Glasgow Climate Pact (CMA.3), 36, 39, 40, 41, 54, 60. 89 For a discussion of how to manage globalization under a paradigm of innovation-​led growth see Philippe Aghion and others, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations (HUP 2021) 258–​71. For an example of support policies that did not yield desired outcomes see

290  Stakeholder Engagement a protectionist effort to cushion local economies from the disruptions of global energy transition policies. The same problem replicates at the national level. Energy transition will have regionally disparate impacts within states.90 Energy transition policies guided by the Energy Transition Principles must aim to reduce such outcomes.91 Policy-​making must look to increase economic resilience in areas most likely to be negatively affected by energy transition policies.92 A failure to do so—​as discussed in the final section—​ will lead to the collapse of policy efforts, threatening the entire edifice of energy transition governance. A focus on transfer guided by the lessons from community development agreements can help to guard against such backsliding. The concept of treating ‘transfer’ as a practice is instructive in assisting in the fulfilment of the goals of the Energy Transition Principles. In the first place, the treatment of transfer as a practice moves away from an understanding of transfer as requiring purely paternalistic contributions of fixed amounts that can be paid off.93 The performance of US$100 billion yearly financial commitments by developed states reiterated in the Glasgow Climate Pact could incorrectly be seen as such paternalistic contributions only (performance commitments that in any event are not yet met).94 Such an approach is hardly ever successful. In the extractive industry context, there is now a significant literature highlighting the significant failures of a paternalistic approach to community development.95 These failures apply by analogy William Neuman, Things Are Never So Bad They Can’t Get Worse: Inside the Collapse of Venezuela (St Martin’s Publishing 2022) 48. 90 Humayun Tai and others, ‘The Energy Transition: A Region-​by-​Region Agenda for Near Term Action’ McKinsey & Company (December 2022) 52 https://​www.mckin​sey.com/​~/​media/​mckin​sey/​ ind​ustr​ies/​elect​ric%20po​wer%20and%20natu​ral%20gas/​our%20i​nsig​hts/​the%20ene​rgy%20tra​nsit​ ion%20a%20reg​ion%20by%20reg​ion%20age​nda%20for%20n​ear%20t​erm%20act​ion/​the-​ene​rgy-​tra​ nsit​ion-​a-​reg​ion-​by-​reg​ion-​age​nda-​for-​near-​term-​act​ion-​final.pdf (noting the need to address labour disruption in the energy transition context in the US). 91 Convention on the Right to Development (Draft 2), art 4(2); General Comment 3 (n 87) 9 (noting that ‘any deliberately retrogressive measures in that regard would require the most careful consideration and would need to be fully justified by reference to the totality of the rights provided for in the Covenant and in the context of the full use of the maximum available resources’) For further discussion see ch 11. 92 For a discussion of how such approaches could be modelled see Abhijit V Banerjee and Esther Duflo, Good Economics for Hard Times (Public Affairs 2019) 168–​69 (discussing the example of the Tennessee Valley Authority). 93 Otto (n 51) 59. 94 Glasgow Climate Pact (CMA.3), paras 44–​46. 95 On the practice of avoiding paternalism in community development agreements, see Felipe Cantuarias, ‘Development of a Large-​Scale Mine: The Antamina Project’ (2001) 2001C RMMLF Special Institute 14A; Barnali Choudhury, ‘Aligning Corporate and Community Interests: From Abominable to Symbiotic’ (2014) Brigham Young University LR 257, 280. For a discussion of the social licence to operate in the context of community development agreements, see Kristi Disney Bruckner, ‘Community Development Agreements in Mining Projects’ (2016) 44 Denver J Intl L & Policy 413, 416–​18; Ana Elizabeth Bastida and Carlos Ciappa, ‘Community Development Agreements’ (2015) 3 RMMLF Institute 11B. For a discussion of social licence to operate in the oil and gas context see J Nna Emeka, ‘Beyond Petroleum Production to Community Development: International Oil Companies as Proxy Governments’ (2010) 5 Texas J Oil, Gas and Energy L 323. For a discussion of the concept

Content of the Practice of Stakeholder Engagement  291 in the policy context, as well. Just like a project must be embedded in an affected community by increasing a community’s economic, social, and cultural resilience, an energy transition policy must likewise protect communities against the negative impacts of the policy in question. This requires significant policy action and engagement rather than the simple transfer of a sum of money. Treating transfer as a practice conceptualizes the problem differently. In treating transfer as a ‘practice’, policy-​makers strive for ‘excellence’.96 That means that policy-​makers look to realize the maximally achievable outcome (development) at the current moment in time.97 This means that states and policy-​makers must look to affected people as partners in energy transition rather than as recipients of paternalistic welfare contributions. This change in perspective means that energy transition policy must purposefully build in a place for affected persons in economic participation and economic growth in the post-​transition global energy and global economic paradigm. This practice is not a matter of charity. It is a matter of global self-​interest. Constructing a global market place that includes affected people and communities strengthens the market place for all. Stronger markets support more competition. Competition drives innovation.98 The greater the pool of possible competitors at the technological frontier, the stronger the benefits of innovation become for all market participants.99 An approach that categorically and structurally seeks to include affected persons in future innovation increases the pool of potential innovators. As such, it benefits all market participants by improving competitiveness.100 As discussed in previous chapters, energy transition cannot occur without revolutionary innovation in the very near future. There are material technological gaps up and down the energy value chain be it in energy storage or in direct air capture technology or elsewhere. The only way to overcome these gaps is through radical, and radically fast, innovation. The approach to transfer outlined here is intended to meet this need. The technological status quo leads to cataclysmic global failures in energy systems, economic systems, ecosystems and in world society. To escape such failure requires that the human capacity to innovate be maximally encouraged and maximally realized. A global solution increases global markets and thus supports demand for innovative solutions (thus supporting innovation). It also of a social licence to operate in the climate context see Michael P Vandenhergh and Mark A Cohen, ‘Climate Change Governance: Boundaries and Leakage’ (2010) 18 New York University Env LJ 221, 226. For a discussion of a social licence to operate in the corporate governance context see Hillary A Sale, ‘The Corporate Purpose of Social License’ (2021) 94 Southern California LR 785; Hillary A Sale, ‘Disclosure’s Purpose’ (2019) 107 Georgetown LJ 1045, 1069; Galit A Sarfaty, ‘Human Rights Meets Security Regulation’ (2013) 54 VJIL 97, 124–​25.

96

Alastair McIntyre, After Virtue (Duckworth 1987) 187 See ICESCR, art 2(1). 98 Aghion and others (n 89) 55–​74. 99 ibid 35–​36. 100 ibid 84–​87. 97

292  Stakeholder Engagement increases the supply of innovation by increasing the ability of more human beings to participate in development at the innovation frontier.

C  The Practice of Autonomy The final function of stakeholder engagement is to support autonomy in all stakeholders as decision-​makers in energy value chains and in energy transition policymaking. This function is a result of consultation and transfer in that consultation and transfer engender autonomy by affected communities and community members. In turn, this autonomy is needed for consultation and transfer to function. Given its core relationship to consultation and transfer, it is discussed separately in this section. A successful example helps to illustrate the role of autonomy in community engagement. This example involves a Chevron-​operated project in the Niger delta. After an initial failure to garner community support, Chevron adopted a different strategy. It engaged Professor Femi Ajibola and his local NGO, New Nigeria Foundation, as a broker. Professor Ajibola and the New Nigeria Foundation had deep local community ties to assist in community engagement. At the same time, it provided the broker with meaningful resources to create local governance capacities to monitor project implementation. It also provided means to these local governance mechanisms to support programmes deemed essential by community deliberation. The project thus supported local autonomy and capacity and became an integral part of local community development.101 Professor Ajibola later explained the difference between Chevron’s earlier failed approach and the successful one he took: the earlier approach ‘was just appeasing community leaders . . . But they didn’t listen’.102 Professor Ajibola went on that there ‘are many companies that are well-​intentioned but they don’t understand the process of development’.103 Such companies, he elaborated, spend money on schools, hospitals, and other infrastructure those companies believe to be important.104 Professor Ajibola concluded ‘[t]‌he unfortunate thing is that, number one, you cannot sit down and decide the needs and requirements of others for them. Number two, you cannot prioritize for them. Number three, even if you get it right—​that is, you are able to identify what they need—​it is extremely important that they own the process and that they own the structures in place for their development’.105 101 Owen Anderson and others, International Petroleum Law and Transactions (RMMLF/​FNREL 2020) 689–​91. 102 Wilthold J Henisz, Corporate Diplomacy: Building Reputations and Relationships with External Stakeholders (Routledge 2017) 123–​24. 103 ibid. 104 ibid. 105 ibid. It is further not clear that every community would wish to follow a similar developmental path. Thant Myint-​U made such a point in the context of Burma/​Myanmar. Thant Myint-​U, The Hidden History of Burma: Race, Capitalism, and the Crisis of Democracy in the 21st Century (WW Norton 2020)

Content of the Practice of Stakeholder Engagement  293 Autonomy requires more than consultation and transfer. It requires the capacity of communities to participate effectively. This effective participation requires an administrative structure that can competently and independently assess needs and impacts, formulate neutral expert responses, and implement decisions.106 This administrative structure must be responsive to, and nestled in, society without being subject to capture by influential society members.107 It must have the trust of those affected without losing its inherent independence as an expert decision-​maker.108 Supporting autonomy requires capacity building developed after social mapping of all stakeholders involved.   

Such structures are not always available. In the context of community development agreements, these structures frequently have to be built.109 Building such capacity requires both a transfer of expertise and the embedding of such expertise in the decision-​ making processes of affected communities.110 Building such structures creates inherent jurisdictional tensions between existing governance processes and the new structures to be built in the context of community development. Resolving these tensions in the project context requires significant sensitivity in social mapping by all stakeholders involved. However, autonomy typically results only if such mapping leads to successful and organic results that can lead to the tangible implementation of community needs as determined by community decision-​making processes.111 Energy transition governance therefore requires a practice of capacity building not just at the local but also at the global, and the national level. National regulatory decisions particularly in industrial and post-​industrial economies have global impacts. Climate policies can have significant negative effect in developing economies contrary to the principle of common-​but-​differentiated responsibility.112 Decision-​makers do not always have the potential global impacts of their policies 202–​203. Further, the very notion of imposing standards (however softly and however well-​intentioned) has a tendency to backfire. This dynamic was powerfully explored in the Eastern European context by Ivan Krastev and Stephen Holmes. See Ivan Krastev and Stephen Holmes, The Light that Failed: Why the West Is Losing the Fight for Democracy (Penguin 2019) 74. 106 Fukuyama (n 24) 174–​84 (discussing these elements in the context of the US Forest Service). 107 ibid 522–​23. 108 ibid. 109 Henisz (n 102) 123–​24. 110 Otto (n 51) 20. 111 Henisz (n 102)123–​24. 112 Jakub Benarek, ‘Is the EU Realizing an Externally Just Green Transition? A Short Analysis of the Carbon Border Adjustment Mechanism from the Perspective of the CBDR Principle and the Right to Development of LDCs’ EJIL: Talk! (31 October 2022) https://​www.ejilt​alk.org/​is-​the-​eu-​realiz​ing-​an-​ ext​erna​lly-​just-​green-​tra​nsit​ion-​a-​short-​analy​sis-​of-​the-​car​bon-​bor​der-​adj​ustm​ent-​mechan​ism-​ from-​the-​pers​pect​ive-​of-​the-​cbdr-​princi​ple-​and-​the-​right-​to-​deve​lopm​ent-​of-​ldcs/​

294  Stakeholder Engagement in view even if they are frequently required to be taken into account in decision-​ making.113 These regulators must appropriately build the capacity in question. Autonomy requires capacity building in industrial and post-​industrial societies appropriately to take extraterritorial impacts of regulation into account.   

Such capacity building can be embedded in existing bottom-​up networked governance processes.

At the same time, developing economies need to build capacity in the regulation of new energy technologies. They further need capacity to address the changing regulatory landscape driven by energy transition policies themselves. They thus require expertise that is more typically found today in developed countries. The capacity building required at the national and global level reprises the themes of globally networked bottom-​up governance.114 To create the capabilities needed to implement energy transition policies requires a mutual education of administrative stakeholders as to the consequences of different policy pathways. Such a networked dialogue support autonomy to the extent that the contributions of all members are accepted as equal and equally valuable. Consultation and transfer works towards the achievement of shared outcomes (just transition) rather than the paternalistic imposition of transition pathways. The practice of autonomy is a practice of respectful dialogue. It is intended mutually to educate. Through this mutual education, human agency can take an ever-​ greater role in administrative decision-​making. This decision-​making in turn is more likely to be viewed as authoritative by members of world society. The practice of autonomy in the energy transition context nestles regulatory structures in each other such that decision-​making in a bottom-​up global governance setting is possible. This possibility accepts that one size of solution does not fit all problems. Rather, it supports decision-​making in each context by placing the ultimate effective decision-​making power in the hands of those negatively affected by a decision.

IV  Conclusion: The Authority of Energy Transition Decision-​making The importance of stakeholder engagement as outlined in this chapter becomes readily apparent when one considers two examples involving stakeholder 113 For a full discussion see Frederic G Sourgens, ‘The Dark Sun Network’ (2023) 94 Colorado LR 481. 114 Anne-​Marie Slaughter, A New World Order (PUP 2005); Regina Jeffries, ‘Transnational Legal Process: An Evolving Theory and Methodology’ (2021) 46 Brooklyn J Intl L 311.

Conclusion  295 engagement in energy transition policymaking. Both examples concern the implementation by two states of their commitments of their initial nationally determined contributions under the Paris Agreement. The first is an unsuccessful example in which a policy that passed the hurdles of the ordinary political and legal process was nevertheless undermined by stakeholder rejection. The second is a successful example of stakeholder activity in implementing an NDC that was facially crippled by political and legal hurdles. The first, unsuccessful, example is the manner in which France implemented its intended NDC. As a Member State of the European Union, France confirmed its commitment to the European Union’s determined contribution of greenhouse gas emission reductions of ‘at least 40% domestic reduction in greenhouse gas emissions by 2030 compared to 1990’.115 The French implementation of this target relied among other things on a ‘target of pricing carbon at Euro 56 per tonne by 2020 and Euro 100 by 2023, for the carbon component of the tax on energy products consumption’.116 The French government’s plan included ‘an ambitious carbon tax trajectory’ for automotive fuel.117 Relevant French ambition straddled two presidential administrations, the administration of President François Hollande (Parti Socialiste) and President Emmanuel Macron (La République en Marche/​Renaissance). The yellow vest protests undermined parts of the French implementation of its NDC.118 The yellow vest protests began with a petition by a small-​business owner, Priscillia Ludosky, in May 2018 to lower gas prices in France, focusing in particular on the tax component of the final price paid by consumers.119 By November 2018, petitioning turned to protesting, when truck driver Eric Drouet joined with Priscillia Ludosky, with Drouet being ‘credited with suggesting that angry drivers deliberately block or slow traffic in their areas’.120 Protests became a country-​wide, 115 Submission by Latvia and the European Commission on Behalf of the European Union and its Member States (6 March 2015) 3; Soumission de la France (5 October 2016) 2. 116 Energy Transition, Gouvernement.fr, https://​perma.cc/​Z2A4-​ZN6Y (discussing Act of 17 August 2015). 117 Adrien Fabre and Thomas Douenne, ‘Public Support for Carbon Taxation: Lessons from France’ Centre for Economic Policy Research (1 May 2022) https://​cepr.org/​voxeu/​colu​mns/​pub​lic-​supp​ort-​ car​bon-​taxat​ion-​less​ons-​fra​nce. 118 Alexis Spire, ‘Aux source de la colère contre l’impôt’ Le Monde Diplomatique (December 2018) https://​www.monde-​diplo​mati​que.fr/​2018/​12/​SPIRE/​59371 119 For English language reporting on the beginnings of the turn to continued violence by yellow vest protesters see Alissa J Rubin, France’s Yellow Vest Protests: The Movement that has Put Paris on Edge’ New York Times (3 December 2018) https://​www.nyti​mes.com/​2018/​12/​03/​world/​eur​ope/​fra​nce-​yel​ low-​vest-​prote​sts.html. For the petition see Priscillia Ludosky, ‘Pour une Baisse des Prix du Carburant à la Pompe!’ https://​www.cha​nge.org/​p/​pour-​une-​bai​sse-​des-​prix-​à-​la-​pompe-​esse​nce-​die​sel. For French reporting on the impact of the petition see Aline Leclerc, ‘Priscillia Ludosky, porte-​parole des “gilets jaunes”: “Ce n’est qu’un premier rendez-​vous, on en attend d’autres”’ Le Monde (28 November 2018) https://​www.lemo​nde.fr/​soci​ete/​arti​cle/​2018/​11/​28/​prisci​lla-​ludo​sky-​porte-​par​ole-​des-​gil​ets-​ jau​nes-​ce-​n-​est-​qu-​un-​prem​ier-​ren​dez-​vous-​on-​en-​att​end-​d-​autr​es_​5​3900​07_​3​224.html. 120 For English language reporting on Mr Drouet’s role in the protest see ‘French Gilets Jaunes: Who Is Protest Leader Eric Drouet?’ BBC News (3 January 2019) https://​www.bbc.com/​news/​world-​eur​ ope-​46745​656. For French reporting on Mr Drouet see ‘Gilets jaunes: Eric Drouet, l’une des figures du movement, sera jugé le 5 juin’ Le Monde (23 December 2018) https://​www.lemo​nde.fr/​pol​ice-​just​

296  Stakeholder Engagement mass phenomenon.121 They quickly turned violent.122 The protests eventually managed to changed French fiscal policy with regard to gasoline/​carbon taxation.123 It did so despite the fact that legislative majorities remained firmly in President Macron’s control at the time and no legal challenge to the policies would have had a prospect of success.124 The protests are interesting because they drew on a broad, eclectic support base. Priscillia Ludosky is from Martinique and, at the time of her petition, was a 32-​year-​old small business owner with banking experience. Eric Drouet is from central France and, at the time of the protests, was a 32-​year-​old truck driver. The protests in turn brought French farmers into the fold, combining leaders from overseas France, and metropolitan France, business owners, workers, and farmers. To understand the yellow vests protests in the context of the current discussion, it is important to understand what these protests were not. They were not the expression of political participation with regard to a narrow policy initiative as such. Rather, they were a spontaneous, broad-​based, networked expression of anger at French social policy in general.125 This expression focused in on energy policy because of the immediate impact of energy taxation on ‘ordinary people’ in rural and peri-​urban areas relying on diesel and gasoline for their livelihoods. These protests did not mobilize any political group against others or indeed contributed to identity politics along traditional lines. It is easy to say with hindsight that French energy policy from 2014 to 2018 must have failed to involve stakeholders appropriately to give rise to such a powerful, spontaneous, broadly carried reaction. Yet, while the protests took aim at specific

ice/​arti​cle/​2018/​12/​23/​gil​ets-​jau​nes-​eric-​dro​uet-​l-​une-​des-​figu​res-​du-​mouvem​ent-​sera-​juge-​le-​5-​ juin_​5401​656_​1653​578.html. 121 Raphaëlle Rérolle, ‘Gilets Jaunes: Les élites parlent de fin du monde, quand nous, on parle de fin du mois’ Le Monde (25 November 2018) https://​www.lemo​nde.fr/​politi​que/​arti​cle/​2018/​11/​24/​gil​ ets-​jau​nes-​les-​eli​tes-​parl​ent-​de-​fin-​du-​monde-​quand-​nous-​on-​parle-​de-​fin-​du-​mois​_​538​7968​_​823​ 448.html. 122 Rubin (n 119). 123 For English reporting see Kim Willsher, ‘Macron Scraps Fuel Tax Rise in Face of Gilets Jaunes Protests’ Guardian (5 December 2018) https://​www.theg​uard​ian.com/​world/​2018/​dec/​05/​fra​nce-​wea​ lth-​tax-​chan​ges-​gil​ets-​jau​nes-​prote​sts-​presid​ent-​mac​ron. For French reporting see Alexandre Lemarié and others, ‘Gilets jaunes: la hausse de la tax carbone “abondonée” pour 2019’ Le Monde (6 December 2018) https://​www.lemo​nde.fr/​soci​ete/​arti​cle/​2018/​12/​05/​gil​ets-​jau​nes-​emman​uel-​mac​ron-​s-​opp​ose-​ a-​tout-​ret​abli​ssem​ent-​de-​l-​isf_​5​3932​33_​3​224.html. 124 See David Reid, ‘French Government to Face a No-​Confidence Vote Following Street Protests’ CNBC (12 December 2018) https://​www.cnbc.com/​2018/​12/​12/​mac​ron-​gov​ernm​ent-​to-​face-​no-​con​ fide​nce-​vote-​follow​ing-​fre​nch-​prote​sts.html (‘President Emmanuel Macron’s parliamentary majority makes it unlikely that the government will fall’). 125 Spire (n 118). Mattingly describes a similar phenomenon of apparently spontaneous, leaderless protests concerning land policy in China. Mattingly (n 49). The underlying mechanism behind both sets of protests bears more than a fleeting resemblance even as each is obviously limited to its own specific context.

Conclusion  297 governmental measures, they did not question the need for climate action.126 The diffuse nature of grievances and demands further suggests that the protests drew on a broad feeling of alienation and unfair distribution of burdens and benefits of energy transition in France.127 Stakeholders did not feel heard or seen by their government. They consequently defected in large numbers from the manner in which policy goals were implemented (even as they arguably did not defect from the policy goals themselves).128 The symbolic slogan for the reaction by stakeholders against governmental policy was ‘les élites parlent de fin du monde, quand nous, on parle de fin du mois—​the elites talk of the end of the world but us, we speak of the end of the month’.129 Fulfilment of Paris Agreement goals, in short, required and must mediate the balance between different Energy Transition Principle-​related demands through stakeholder engagement to be successful. It further must create a process in which affected persons feel that they have ownership of the decisions balancing imperatives against each other. They must thus have ownership of sacrifices they have been asked to make.130 Current French policy has since internalized this lesson, at least outwardly, as recent statements by President Macron on energy policy suggest.131 However, stakeholder engagement has a long way to make up for past disconnects given the intensity of the protests in question. The second, successful, example of the implementation of an NDC confirms the same point, be it in reverse. This second example, counter-​intuitively, is the US. One of the central pieces of the first US NDC was the Clean Power Plan.132 The Clean Power Plan sought to limit greenhouse gas emissions form the electricity sector in the United States by way of regulatory action under the US Clean Air Act.133 The Clean Power Plan faced immediate political and legal setbacks. The Clean Power Plan was never implemented as its entry into force was halted by the US Supreme Court.134 After the 2016 election, the Trump administration then 126 Rachel Donadio and Robinson Meyer, ‘France’s “Yellow Vest” Protesters Aren’t Against Climate Action’ The Atlantic (8 December 2018) https://​www.thea​tlan​tic.com/​intern​atio​nal/​arch​ive/​2018/​12/​ fra​nce-​yel​low-​vest-​clim​ate-​act​ion/​577​642/​. 127 Spire (n 118). 128 Ludosky (n 119); Donadio and Meyer (n 126). 129 Rérolle (n 121). 130 Henisz (n 102)123–​24. 131 For English reporting see Luke Shrago, ‘Macron Warns France of the ‘End of Abundance’ and Tough Times Ahead’ France 24 (24 August 2022) https://​www.franc​e24.com/​en/​fra​nce/​20220​824-​ mac​ron-​warns-​fre​nch-​of-​tough-​times-​ahead-​end-​to-​ene​rgy-​price-​cap. For French reporting see ‘Emmanuel Macron annonce “la fin de l’abondance” et “de l’insouciance” ’ Le Monde (24 August 2022) https://​www.lemo​nde.fr/​vid​eos/​video/​2022/​08/​24/​emman​uel-​mac​ron-​anno​nce-​la-​fin-​de-​l-​abonda​ nce-​et-​de-​l-​inso​ucia​nce_​6138​902_​1669​088.html. 132 First US NDC (3 September 2016). 133 Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units, 80 Federal Register 64,662 (23 October 2015). For a discussion of the Clean Power Plan see ‘The Clean Power Plan’ (2016) 129 HLR 1152. 134 West Virginia v Environmental Protection Agency 577 US _​_​(9 February 2016).

298  Stakeholder Engagement attempted to repeal the Clean Power Plan by administrative means and withdrew the US from the Paris Agreement.135 Despite these dual legal and political setbacks, the goals of the Clean Power Plan were met ahead of schedule.136 That is, despite the fact that the Clean Power Plan never became legally binding and was politically overturned, the US in fact achieved the very outcomes aimed at as part of the Clean Power Plan. The reason for this achievement was that sub-​national governmental actors, as well as the energy industry and civil society actors in key states supported the overall initiative set out in the Clean Power Plan.137 The United States example demonstrates that stakeholder support can save a policy even when it appears dead. Stakeholders have the power through their independent actions to make progress against political and legal headwinds. This suggests that stakeholder engagement creates resilience for the underlying policies even in the face of significant opposition. This is not to say that the Obama administration and the Clinton presidential campaign were masters at stakeholder engagement. Both committed significant political missteps in defending the Clean Power Plan.138 What saved the Clean Power Plan was that affected communities in key jurisdictions able to affect the energy mix in the electricity sector supported the goals of the Clean Power Plan. This support from affected communities (states and municipalities as well as the energy industry) meant that the Clean Power Plan could be implemented in practice even as it was undermined as a matter of law. This support stemmed from specific, varied circumstances, not from philosophical adherence to the policy content. The success or failure of energy transition policies, in other words, depends on the manner in which these policies are implemented. No state faces the same stakeholder interests. No state therefore can adopt the same energy policies wholesale. As states determine how to fulfil the Energy Transition Principles in their specific context, nothing is more important than the support from affected communities for the path that is eventually chosen. The sustainability of energy transition pathways depends on it. Securing that support—​and securing that the Energy Transition Principles will in fact lead to effective outcomes—​depends on the kind of stakeholder engagement discussed in this chapter. 135 Dana Nuccitelli, ‘The Trump EPA Strategy to Undo the Clean Power Plan’ Yale Climate Connection (21 June 2019) https://​yal​ecli​mate​conn​ecti​ons.org/​2019/​06/​the-​trump-​epa-​strat​egy-​to-​ undo-​the-​clean-​power-​plan/​; American Lung Association v Environmental Protection Agency No 19-​ 1140 (DC Circuit 2021); Michael R Pompeo, ‘On the US Withdrawal from the Paris Agreement’ US State Department (4 November 2019) https://​2017-​2021.state.gov/​on-​the-​u-​s-​wit​hdra​wal-​from-​the-​ paris-​agreem​ent/​index.html. 136 Todd Snitchler, ‘How We Passed the Clean Power Plan Target a Decade Early’ Electric Power Supply Association (28 May 2020) https://​epsa.org/​power-​sec​tor-​meets-​clean-​tar​get-​a-​dec​ade-​early-​ tha​nks-​to-​comp​etit​ive-​mark​ets/​. 137 See ibid. 138 Katie Reilly, ‘Read Hillary Clinton’s “Basket of Deplorables” Remarks About Donald Trump Supporters’ Time (10 September 2016) https://​time.com/​4486​502/​hill​ary-​clin​ton-​bas​ket-​of-​depl​orab​ les-​tra​nscr​ipt/​.

15

Liability and Dispute Settlement I Introduction International lawyers frequently consider that one of their chief contributions to energy transition is dispute resolution. The discussion in this book takes a decidedly different point of view. The book has so far contrasted an adjudication-​ based approach to law to a problem-​solving approach to law. It has noted that energy transition, and the Energy Transition Principles, were furthered by taking a problem-​solving approach rather than adjudication-​based approach to their implementation. This leaves the question—​what is the role of dispute resolution in energy transition governance? This chapter will address the role of dispute resolution in the broader framework of realizing a successful energy transition. The goal of energy transition remains the full realization of all of the Energy Transition Principles. The goal is not to realize only a subset of Energy Transition Principles (such as the Climate Principles or the Energy Equity or Energy Security Principles). Dispute resolution can make a significant contribution to this effort even if it might appear to be less than many associate with high impact litigation. One cannot solve energy transition with a judgment. Instead, dispute resolution plays a rather incremental—​and yet just as important—​role in securing progress and protecting vulnerable persons against policy overreach. This chapter will first address the role of national courts as agents of energy transition and as implementers of the Energy Transition Principles. National courts play a particularly important role in a bottom-​up, networked governance system. As discussed already, a bottom-​up, networked governance system does not impose ultimate obligations of result on states. It involves states in decision-​making in a more organic manner. States set their own targets and choose their own means in implementing international goals. National courts are an important partner in this exercise. They help to guide national decision-​makers in how to understand the task of energy transition from a national perspective. This in turn provides input to other stakeholders of how to consider their own efforts. National courts in this sense are the most immediately important judicial actors in implementing the Energy Transition Principles. This chapter will then discuss which international fora have been principal actors in energy transition and are expected to become such agents in the near

300  Liability and Dispute Settlement future. Due to space constraints, this discussion must necessarily choose examples. The examples below are intended as illustrations rather than as an exhaustive list of all types of international legal proceedings involved, let alone of all cases involving energy transition. The chapter finally will outline a rubric of how international dispute resolution can be a successful engine of energy transition outcomes consistent with the Energy Transition Principles. The approach advocated here sees adjudicatory bodies as decidedly in a supporting role. As discussed in more detail in the final section, courts are not policy-​makers tasked with the substantive balancing of different demands posed by the Energy Transition Principles. That task belongs to the other government branches. Rather, courts have a role in safeguarding the manner in which decisions are made. In doing so, courts can provide a backstop against significant retrogression by states with regard to their respective climate, energy, environmental or human rights commitments in the name of energy transition. Courts also provide a guard rail for an orderly process of decision-​making by governments. As such a guard rail, courts must necessarily understand national decisions in their respective contexts. In short, they must guard the application of the Energy Transition Principles. When courts and tribunals fulfil this narrower role, they are instrumental in securing energy transition outcomes. Courts and tribunal clarify standards. This clarification in turn becomes an input and guidepost for policy-​makers in how to solve problems going in the future. Courts and tribunals therefore are one of the chief legal organs of energy transition governance. They announce and apply law. In doing so, they provide needed transparency for lawyers seeking to use law as a problem-​solving tool in the energy transition policy-​making enterprise. The central point in this understanding of courts and tribunals is that they are collaborators in energy transition governance. The dynamic of the role of courts and tribunals is not one epitomized by the ‘versus’ in the caption of cases. It is instead a dynamic of ‘with’: courts and tribunals act collaboratively with states in order to achieve the realization of the values underlying the Energy Transition Principles. ‘Winning’ thus is not about vindicating rights, it is about realizing and implementing them. Courts and tribunals can only do this when they (as well as other state representatives) act as agents of the law. They protect the rule of law by announcing and further defining the applicable legal principles. States use their judgments as a tool to guide their policy-​making efforts.

II  The Role of National Courts in Energy Transition Implementation National courts were not necessarily the first actors with regard to energy transition. There were many international proceedings of significance for energy

National Courts in Energy Transition Implementation  301 transition that preceded or proceeded in parallel with national court proceedings.1 These international proceedings influenced the domestic approach to energy transition litigation.2 However, national courts have a particularly weight-​bearing role in a bottom-​up global governance framework that gives them pride of place. The sovereign choice of means underlying much of the Energy Transition Principles leaves significant discretion to national decision-​makers.3 This discretion in the first place is limited by national constitutional arrangements. There is no international answer how a state must balance different potential outcomes against each other in policy-​making. There are many domestic public law answers that inform how policy must actually be made.4 National courts fulfil a primary governance function in the processes of global energy transition decision-​making by providing these answers. National courts have a prominent role in achieving energy transition outcomes by enforcing appropriate public law decision-​making processes regarding energy transition policy.   

This section will contrast two different approaches of how national courts can approach energy transition governance. This section will suggest that one may be more successful than the other. The two approaches are an interventionist approach and a deferential approach by the courts. This section will use the Dutch Urgenda decision as an example of the interventionist approach and the German Neubauer decision as an example of a deferential approach.5 Before engaging in this more detailed analysis there is an important point of order. The Dutch and German courts are not pioneers in climate litigation.6 In many ways, they are late-​comers. Further, there are many significant contributions to climate and energy transition litigation from the Global South.7 There is 1 On the development of human rights thinking in the context of climate change see John H Knox, ‘Human Rights Principles and Climate Change’ in Cinnamon Carlarne and others (eds), Oxford Handbook of International Climate Change Law (OUP 2016) 213. 2 See Kumaravadivel Guruparan and Harriet Moynihan, Climate Change and Human Rights-​Based Strategic Litigation (Chatham House Briefing 2021). 3 See Energy Transition Principles 2, 7, 12, 18. 4 For an insightful commentary on the relationship between law and public policy in one national context see Theodore J Lowi, ‘Law vs. Public Policy: A Critical Exploration’ (2003) 12 Cornell J Public Policy 493. 5 Hoge Raad 20 December 2019 (Urgenda Foundation/​The State of the Netherlands) 5.2.1–​5.5.3 (unofficial English translation) https://​www.urge​nda.nl/​wp-​cont​ent/​uplo​ads/​ENG-​Dutch-​Supr​ eme-​Court-​Urge​nda-​v-​Neth​erla​nds-​20-​12-​2019.pdf; Bundesverfassungsgericht (BVerfG) (24 March 2021) 157 Entscheidungen des Bundesverfassungsgerichts (BVerfGE) 270 (Neubauer). 6 On climate change litigation prior to both decisions in general see Jacqueline Peel and Hari Osofsky, Climate Change Litigation: Regulatory Pathways to Cleaner Energy (CUP, 2015). On climate change litigation in developing countries see Jacqueline Peel and Jolene Lin, ‘Transnational Climate Litigation: The Contribution of the Global South’ (2019) 113 AJIL 679. 7 Peel and Lin (n 6).

302  Liability and Dispute Settlement therefore nothing particularly insightful about the Dutch or German courts that sets these courts apart as unique or special. The choice of these two approaches instead sought to find two courts that shared as much as possible in terms of geographic, cultural, and legal reference points to provide as helpful a point of comparison as possible. While important differences between Germany and the Netherlands obviously remain, one cannot explain their respective difference in approach by reference to a contextual platitude. This differentiation therefore is particularly interesting to highlight the role of domestic courts as constitutive actors for, and implementers of, the Energy Transition Principles—​or as potential stumbling blocks in their implementation.

A The Urgenda Approach The Dutch Urgenda litigation is one of the most frequently highlighted climate litigation cases before domestic courts.8 While hailed in some quarters as respecting separation of powers principles, it took a reasonably decisive view of the legal principles governing energy transition—​focusing predominantly on climate change.9 It further provided specific emission reduction requirements for the Dutch government to meet. These requirements have had a significant practical impact on the European energy landscape. The genesis of the case is quickly recounted. The Urgenda Foundation launched a citizens’ suit. It alleged that the Dutch government’s climate policy failed adequately to protect the rights of Dutch citizens. It advanced two different theories, one under civil law and another under the European Convention on Human Rights (ECHR).10 The Dutch Supreme Court in December 2019 ruled that the Dutch government’s actions indeed violated the right to life in Article 2 and the right to private and family life in Article 8 of the ECHR.11 The Court reasoned that Article 13 of the ECHR guaranteed an effective remedy against human rights violations.12

8 On the reception of Urgenda see CW Backes and GA van der Veen, ‘Urgenda: the Final Judgment of the Dutch Supreme Court’ (2020) 17 J European Env & Planning L 307. The decision has led to calls for imitation in the US Comparative Law-​Climate Change-​Hague Court of Appeal Requires Dutch Government to Meet Greenhouse Gas Emissions Reductions by 2020.-​Hof ’s-​Gravenhage 9 Oktober 2018, Ab 2018, 417 M.nt. Ga Van Der Veen, Ch.w. Backes (Staat der Nederlanden/​Stichting Urgenda) (2019) 132 HLR 2090. 9 Comparative Law-​Climate Change-​Hague Court of Appeal Requires Dutch Government to Meet Greenhouse Gas Emissions Reductions by 2020.-​Hof ’s-​Gravenhage 9 Oktober 2018, Ab 2018, 417 M.nt. Ga Van Der Veen, Ch.w. Backes (Staat der Nederlanden/​Stichting Urgenda) (2019) 132 HLR 2090, 2090–​2091. 10 ibid. 11 Hoge Raad 20 December 2019 (Urgenda Foundation/​ The State of the Netherlands) (n 5) 5.2.1–​5.5.3. 12 ibid.

National Courts in Energy Transition Implementation  303 The Court allowed importantly that climate policy ‘belongs, in principle to the political domain, both internationally and nationally’.13 That is, ‘[s]‌tates will have to agree among themselves on their respective individual share in reducing greenhouse gas emissions and make the necessary choices and considerations in this regard’.14 The Court’s focus in this part of its decision is on negotiation strategy and allowing foreign policy leeway to the Dutch government.15 The Court does not, however, address the question of energy policy and energy sovereignty.16 These concerns are overshadowed by an exclusive focus on the human rights impacts of climate change. The Court then addressed specific emissions reductions targets. In light of the grave threat of climate change, the Supreme Court confirmed the judgment of the District Court ordering the Dutch government to reduce greenhouse gas emissions by at least 25 per cent compared to 1990 levels.17 It set these targets by reference to IPCC scenarios—​but without reference to the energy systems consequences of its holding.18 Decisions like Urgenda set specific emission reduction targets by reference to IPCC analyses.   

The Urgenda decision changed Dutch energy policy. The Dutch government, seeking to comply with the decision, had to find means to reduce Dutch emissions in the power sector. This in turn led to an earlier coal exit by the Netherlands than planned for by other Dutch branches of government. This had as a consequence that the Netherlands placed a greater strain on European energy systems in this transition period (it did not make up the generation loss).19 This significantly weakened European energy security as a direct result of the Urgenda decision. As a general rule, balancing between energy security, energy access, and climate mitigation constitutes problematic terrain for court action. Here, the Urgenda decision has three related potential shortcomings. First, the Urgenda decision on its face does not discuss energy access and energy security concerns. Its focus is

13 ibid 6.2. 14 ibid. 15 ibid 6.3. 16 ibid. 17 ibid 9. 18 ibid 7. 19 See Jonathan Watts, ‘Dutch Officials Reveal Measures to Cut Emissions after Court Ruling’ Guardian (24 April 2020) https://​www.theg​uard​ian.com/​world/​2020/​apr/​24/​dutch-​offici​als-​rev​eal-​measu​res-​to-​cut-​ emissi​ons-​after-​court-​rul​ing; Hans von der Brelie, ‘The Netherlands Must Reduce Carbon Emissions by the End of the Year, But Can This Be Done?’ EuroNews (18 September 2020) https://​www.euron​ews.com/​2020/​ 09/​18/​the-​neth​erla​nds-​must-​red​uce-​car​bon-​emissi​ons-​by-​the-​end-​of-​the-​year-​but-​can-​this-​be-​done.

304  Liability and Dispute Settlement on climate mitigation. Energy security and energy access concerns are implicit in Urgenda’s reasoning.20 Even so, they remain muted, making it difficult to understand the balancing exercise undertaken by the court. The best account of the decision is that the Urgenda court sought to set a more or less absolute floor for climate action by the Dutch government on the basis of IPCC reporting and EU positions during climate negotiations.21 This account still does not fully answer why only such a floor can respect the rights protected by Articles 2 and 8 of the ECHR.22 Alternative means of protecting Article 2 and Article 8 rights were beyond the scope of the decision even as the Court limited its authority to reviewing whether ‘the measures taken by a state are reasonable and suitable’.23 The reliance on IPCC reporting suggests a basis for this conclusion. Even so, the reasoning is not fully articulated.24 Secondly, it is not easy to glean from the decision whether or to what extent a shock in energy value chains might affect its outcome. Urgenda preceded the 2022 European energy crisis. An energy crisis should have an effect on balancing.25 It is unclear whether the 2022 European energy crisis would be deemed sufficiently severe to upset the Urgenda holding. In other words, it is a fair reading of Urgenda that the floor it sets is indeed absolute. Yet, such absolutes are difficult to reconcile with a balancing approach, in need of adaptation in face of grave circumstances. Here, such an absolute floor for climate action suggests a view that the climate action ordered by the court is of such importance as to displace any other energy-​ related concern relating to the right to life under Article 2 and the right to private life under Article 8 of the ECHR. The reasoning to support such a conclusion is again not fully articulated. Thirdly, the remedy ordered in Urgenda compounds the first two problems. As the Urgenda decision makes clear, the implementation of energy policy is an issue to be resolved outside of the court.26 The Urgenda court nevertheless chose to set a specific emissions target.27 Setting specific emission targets may still be consistent with such deference to the other branches of government. It nevertheless creates significant and potentially unintended issues for the legislator and the executive to overcome, leaving governments with reasonably little space for making sound policy decisions. One of the unintended consequences of the remedy ordered in Urgenda is that Dutch policy-​makers must prioritize emission reductions over the 20 Urgenda (n 11) 5.3.3. 21 ibid 7. 22 ibid. 23 ibid 5.3.3. 24 See ibid 7.4.6. 25 ibid (quoting the following passage from Jugheli/​Georgia as outlining the task of courts assessing human rights compliance ‘to assess whether the Government approached the problem with due diligence and gave consideration to all the competing interests’). 26 ibid 8.3.2. 27 ibid 9.

National Courts in Energy Transition Implementation  305 respect for and fulfilment of other rights. This is in tension with the court’s own construction of Articles 2 and 8 of the ECHR.28 In the final analysis, the Court’s impetus for action is both well-​taken and necessary. As the Urgenda decision correctly states, domestic adjudication must set up guard rails within which policy-​makers must set energy transition policy.29 Urgenda thus is right that domestic courts must be able to order legislatures and the executive to participate in good faith in bottom-​up governance that is increasingly ambitious.30 Without such court action, states may choose short-​term convenience over long-​term achievement. However, the Court’s manner of setting up guard rails was highly intrusive into the policy prerogatives of other constitutional actors. The Urgenda remedy in particular maximally inserted the Dutch courts in Dutch energy policy-​making. This remedial choice created issues that might have been avoided with a more restrained approach. This might have left the legislator and the executive with more policy capabilities to fashion a comprehensive response to a narrower decision. Such a choice also would not have foreclosed further court intervention at a later point in time if policy continued to fail to reflect judicial direction on dispositive climate considerations.

B The Neubauer Approach The recent German Supreme Court case in Neubauer v Germany on its face seems to have taken a similar approach—​it, too, was a climate case brought against a government claiming that its implementation of Paris Agreement commitments fell short of its legal obligations. Like Urgenda, the Neubauer Court held against the government.31 The manner in which the Court went about its decision-​making is notably different and better able to address the problem noted above in the context of Urgenda—​the duelling human rights impacts of rivalling energy policies. Here, the Neubauer Court reasoned that the German government was required to increase its energy transition ambition as a matter of Article 20(a) of the German Basic Law. Article 20(a) states that ‘[m]‌indful also of its responsibility towards future generations, the state shall protect the natural foundations of life and animals by legislation and, in accordance with law and justice, by executive and judicial action, all within the framework of the constitutional order’.32 This

28 ibid 5. 29 ibid 9. 30 Paris Agreement, art 4(3). 31 See Neubauer (n 5). 32 Grundgesetz, art 20(a) (German) (Christian Tomuschat and others trs) https://​www.gese​tze-​im-​ inter​net.de/​engl​isch​_​gg/​engl​isch​_​gg.html#p0116).

306  Liability and Dispute Settlement provision reflects the human right to life and a principle of intergenerational equity.33 Yet, and here there is an important implicit difference between Neubauer and Urgenda, the Court allowed that climate change did not pose the kind of risk that would allow the wholesale displacement of other rights.34 In fact, part of the Court’s motivation for its judgment was that greenhouse gas emission reductions after 2030 might ‘have to be achieved in such a short timeframe and require such efforts as to threaten basic legally protected freedoms’.35 The Court reasoned that climate change mitigation could be displaced as a policy imperative to the extent mitigation policies disproportionately infringe upon other rights—​but that ‘the relative weight of non-​climate neutral exercises of freedoms decreases as climate change worsens’.36 Notably, the regulation of CO2 emissions becomes increasingly urgent under Article 20(a) of the Basic Law even before tipping points are reached ‘because it would be unrealistic to expect—​quite apart from constitutional concerns—​that one first could tolerate CO2-​emitting conduct without any mitigation and then demand when tipping points are imminent that conduct be immediately carbon neutral’.37 Decisions like Neubauer hold legislative and executive policy-​makers to follow a development-​based balancing approach to energy transition policies.   

In other words, the impact of energy transition policies should be extended over the longest time available to reduce the impairment of constitutionally protected liberties, as the loss of liberty to switch to carbon-​neutral conduct is negligible once a carbon-​neutral infrastructure is widely available.38 This entails that one must start as soon as possible and be as ambitious as possible as early as possible so to ideally reduce the burdens to future generations. The reasoning of the German Constitutional Court is instructive because it uses a sustainable development lens as a means to guide domestic policy-​makers engaged in bottom-​up energy transition governance.39 It reasons that energy transition policies must sustainably allow development broadly conceived to continue

33 Jelena Bäumler, ‘Sustainable Development Made Justiciable: The German Constitutional Court’s Climate Ruling on Intra-​and Inter-​Generational Equity’ EJIL:Talk! (8 June 2021) https://​www.ejilt​alk. org/​sust​aina​ble-​deve​lopm​ent-​made-​just​icia​ble-​the-​ger​man-​con​stit​utio​nal-​cou​rts-​clim​ate-​rul​ing-​on-​ intra-​and-​inter-​gener​atio​nal-​equ​ity/​. 34 Neubauer (n 5) 120. 35 ibid 117 (our translation). 36 ibid 120. 37 ibid. 38 ibid 121. 39 Bäumler (n 33).

National Courts in Energy Transition Implementation  307 unimpeded by today’s policy choices.40 That is, it should not impose an undue burden on either today’s economy nor on the future of children.41 And it does not allow any offsetting of human rights losses of one group (persons living after 2030) against the human rights gains of the current generation.42 This is broadly consistent with the right to development as that right is currently codified in the draft Convention on the Right to Development.43 Article 4 of the draft Convention states that the right to development is inalienable.44 The right entitles every human person ‘to participate in, contribute to and enjoy economic, social, cultural, civil and political development that is consistent with and based on all other human rights and fundamental freedoms’.45 Article 4(2) goes on that ‘[e]‌very human person and all peoples have the right to active, free and meaningful participation in development and in the fair distribution of benefits resulting therefrom’.46 The Convention is further express that ‘all human and legal persons, peoples, groups and States have the general duty under international law to refrain from participating in the violation of the right to development’.47 Article 23 expressly includes sustainable development—​that is the ability of future generations to realize their right to development.48 The reasoning of the German Constitutional Court—​its balancing of the rights of respective generations to development—​follows the exact same logic by safeguarding as much of the right to development for all, thus defending the inability of the right.49 The logic of the German Constitutional Court as well as the draft Convention on the Right to Development do not permit trade-​offs between different groups. It requires a proportionate treatment of all persons and does not permit one to benefit of the back of another.50 Concretely, energy-​transition policies in post-​ industrialized economies must not undermine the right to development of persons located in other sections of the energy supply chain. Similarly, policy-​makers must secure that energy transition policies themselves do not undermine the right to development in industrializing and natural resource-​rich countries. This imposes significant duties of inquiry and duties of risk mitigation and monitoring on proponents of energy transition policies.



40 ibid. 41 ibid. 42 ibid. 43

Convention on the Right to Development (Second Draft). ibid art 4(1). 45 ibid. 46 ibid art 4(2). 47 ibid art 7. 48 ibid art 23. 49 Neubauer (n 5) 117–​20. 50 ibid; Convention on the Right to Development (Draft 2), art 4. 44

308  Liability and Dispute Settlement

Decisions like Neubauer refer legislation for revision in accordance with the judgment to other branches of government rather than setting specific emission reduction targets.   

The Neubauer decision also differs from Urgenda in its approach to remedies. Rather than setting specific emissions targets that must be met by a date certain, the Neubauer decision instead deemed a specific law implementing the legislator’s plan for the implementation of its energy transition commitments as unconstitutional.51 Despite this finding, it did not declare the legislation as null, reasoning that such a determination would have a worse impact on constitutional rights.52 It therefore required the legislator to improve the state of affairs.53 It further provided tools to policy-​makers how they might articulate policy that would pass constitutional muster. This means did not encroach on the competence of policy-​makers to balance different outcomes against each other to arrive at a prudent and authoritative energy policy capable to of achieving needed climate outcomes.54 Neubauer differed from Urgenda in being both deeper in its analysis and softer in its immediate command. Other than Urgenda, Neubauer provided a far more detailed guideline for varied interests to be borne in mind by German policy-​makers. It therefore directed the manner in which policy-​makers could comply with the constitutional requirements outlined in the Neubauer decision. At the same time, the Neubauer Court did not order a specific target be met on a specific timeline as a matter of judicial order. Rather, it left the outcome to the legislature—​mindful of its function of judicial review.55 The Neubauer decision shows how national courts can provide guidance to policy-​makers. Courts do not make ultimate decisions. They nevertheless hold domestic policy-​makers to account. When they hold policy-​makers to account, they do so through a sustainable development lens. As such, domestic courts become the most immediate partners for, and stewards of, policy-​makers striving to implement the Energy Transition Principles.

51 Neubauer (n 5) 267–​68. 52 ibid. 53 ibid 268. 54 For further discussion see Matthias Goldmann, ‘Judges for the Future: The Climate Action Judgement as Postcolonial Turn in Constitutional Law?’ Verfassungsblog (30 April 2021) https://​verf​ assu​ngsb​log.de/​jud​ges-​for-​fut​ure. 55 Neubauer (n 5) 267–​68.

International Fora and Energy Transition Implementation  309

III  International Fora and Energy Transition Implementation A  Human Rights Courts and Tribunals Human rights bodies have been engaged in energy transition disputes for a considerable time. These bodies broadly have focused on the question of climate change. Specifically, when energy transition as such was at issue, these bodies tended to focus on the human rights obligations of states in the context of climate change. As discussed above in the context of the Urgenda decision, the European Convention on Human Rights (ECHR) has been read so as to require aggressive energy transition policies.56 Action under the ECHR was premised on the right to life and on the right to privacy. The Urgenda decision is not a decision of the European Court of Human Rights. Nevertheless, one might expect that the ECHR will take account of its reasoning as well as the reasoning in Neubauer.57 The main innovation in the context of energy transition human rights pronouncements does not hail from Europe. Rather, it was courts like the Inter-​American Court of Human Rights that first developed a consistent and through jurisprudential line on climate change and human rights.58 The Inter-​American Court dealt with the question obliquely (although clearly identifiably) in Advisory Opinion OC-​23/​17.59 The Court held that states had a human rights obligation to prevent transboundary harm as a matter of their obligations to protect the right to life and to the integrity of persons.60 The Inter-​American Court linked this obligation expressly to climate change in the advisory opinion. It noted that it had ‘recognized the existence of an undeniable relationship between the protection of the environment and the realization of other human rights, in that environmental degradation and the adverse effects of climate change affect the real enjoyment of human rights’.61 It highlighted that ‘the OAS General Assembly has recognized the close relationship between the protection of the environment and human rights . . . and emphasized that ‘the adverse effects of

56 Urgenda (n 11) 5.2.1–​5.5.3. 57 For a discussion of cases currently before the European Court of Human Rights see Corina Heri, ‘Climate Chance before the European Court of Human Rights: Capturing Risk, Ill-​Treatment and Vulnerability’ (2022) 33 EJIL 925; Alexander Zahar, ‘The Limits of Human Rights: A Reply to Corina Heri’ (2022) 33 EJIL 953; Corina Heri, ‘Legal Imagination, and the Turn to Rights in Climate Litigation: A Rejoinder to Zahar’ EJIL:Talk! (6 October 2022) https://​www.ejilt​alk.org/​legal-​imag​inat​ ion-​and-​the-​turn-​to-​rig​hts-​in-​clim​ate-​lit​igat​ion-​a-​rejoin​der-​to-​zahar/​. 58 See Heri, ‘Climate Chance before the European Court of Human Rights’ (n 57) (noting the Inter-​ American Court’s trailblazer role). The Inter-​American Court was seized on 9 January 2023 of a further request for a climate-​related advisory opinion by Chile and Colombia. Request for Advisory Opinion (9 January 2023) http://​clima​teca​sech​ibid​com/​wp-​cont​ent/​uplo​ads/​sites/​16/​non-​us-​case-​docume​nts/​ 2023/​2023​0109​_​185​28_​p​etit​ion.pdf. 59 Inter-​American Court of Human Right, Advisory Opinion OC-​23/​17 on the Environment and Human Rights (requested by Colombia) (15 November 2017). 60 ibid 244(4)–​(7). 61 ibid 47.

310  Liability and Dispute Settlement climate change have a negative impact on the enjoyment of human rights’.’62 It explained that ‘the effects on these rights may be felt with greater intensity by certain groups in vulnerable situations’.63 It noted in particular the impairment of food and water supplies by climate change.64 Human rights advisory opinions can differ depending upon whether the underlying request is framed in terms of compliance with negative rights or fulfilment of positive rights.   

The Inter-​American Court notes one potential shortcoming of its advisory opinion. That is, the ‘obligations described above have been developed in relation to the general obligations to respect and ensure the rights to life and personal integrity’.65 The Court explained that the reason for this limitation was that ‘these were the rights the State referred to in its request’.66 The Court importantly noted that ‘this does not mean that the said obligation do not exist with regard to other rights mentioned in this Opinion as being particularly vulnerable in the case of environmental degradation. (supra paras. 56 to 69)’.67 The Court’s discussion in other words concerned the obligation to respect negative rights rather than the obligation to fulfil (or ensure) positive ones.68 The obligation to respect is significantly less flexible—​it is not inherently tied to the trade-​offs inherent in the obligation to fulfil multiple rights all at the same time. In the context of such a positive obligation to fulfil (or ensure), the trade-​offs between different policy choices come more starkly to the fore. When addressing energy transition through the lens of an obligation to respect, this policy task of weighing trade-​offs is still present, if far less pronounced. Balancing is less pronounced because the lens of respect casts policy decisions as a binary choice rather than a more nuanced exercise of supporting the realization of all human capabilities as a whole. The Court’s pronouncements therefore are helpful as far as they go. They provide important context for what the right to respect life and integrity require in the abstract in the climate context. As the Court itself makes clear in the context of its decisions (‘paragraphs 56 to 69’), the discussion of respect of the right to life and 62 ibid 49 (quoting OAS General Assembly, Resolution entitled ‘Human Rights and Climate Change in the Americas’ adopted at the fourth plenary session held on 3 June 2008, AG/​RES. 2429 (XXXVIIIO/​ 08)). 63 ibid 67. 64 ibid 111. 65 ibid 243. 66 ibid. 67 ibid. 68 On the distinction in the context of the Inter-​American Convention see Ludovic Hennebel and Hélène Tigroudja, The American Convention on Human Rights: A Commentary (OUP 2022) 21.

International Fora and Energy Transition Implementation  311 integrity must be seen in the context of an obligation to fulfil the right to a healthy environment.69 This obligation is inherently embedded in the balancing exercise of fulfilling multiple rights at the same time. The right to a healthy environment here is of weight-​bearing importance given its impact on food, water, housing, cultural life, etc. But it is still one among other, similarly weight-​bearing rights.70 On a more optimistic note, the appearance of potential fragmentation raised by a glancing reading of the Inter-​American Court’s approach is ephemeral. The decision on its face must in fact be reconciled with a nuanced approach to balancing the different obligations encapsuled in the Energy Transition Principles against each other.71 The decision provides one piece of a more complex puzzle only. This piece, while important, does not show entire picture. Yet, to look at the entire picture is also to see the critical importance of climate mitigation in respect, protection, and fulfilment of human rights in the energy transition context. The advisory opinion by the Inter-​American Court points to a decision by the African Commission on Human Rights as a helpful guidepost to how such a positive focus on rights fulfilment might proceed.72 The decision in question dealt with the right to a clean environment in the context of an oil and gas development.73 The African Commission highlighted the crucial differences between the obligation to respect, protect, promote, and fulfil rights.74 Centrally, ‘the last layer of obligation requires the State to fulfil the rights and freedoms it freely undertook under various human rights regimes’. This reflects ‘a more positive expectation on the part of the State to move its machinery towards the actual realization of the rights’.75 The Commission held that the right to a healthy environment ‘imposes clear obligations upon a government’.76 These obligations require ‘the state to take reasonable and other measures to prevent pollution and ecological degradation, to promote conservation, and to secure an ecologically sustainable development and use of natural resources’.77 In the first place, this means that the state cannot actively violate the right to integrity of the individual. More importantly in the current context, it ‘must also include ordering or at least permitting independent scientific monitoring of threatened environments, requiring and publicising environmental and social impact studies prior to any major individual development, undertaking appropriate monitoring and providing information to those communities exposed 69 Inter-​American Court of Human Right, Advisory Opinion OC-​23/​17 on the Environment and Human Rights (requested by Colombia) (15 November 2017) 56–​69. 70 ibid 66. 71 ibid 56–​69. 72 ibid n 99. 73 African Commission on Human and Peoples’ Rights, Case of the Social and Economic Rights Center (SERAC) and the Center for Economic and Social Rights (CESR) v Nigeria, Communication 155/​96 (27 October 2001). 74 ibid 44–​45. 75 ibid 47. 76 ibid 52. 77 ibid.

312  Liability and Dispute Settlement to hazardous materials and activities and providing meaningful opportunities for individuals to be heard and to participate in the development decisions affecting communities’.78 A focus on rights fulfilment provides a strong procedural framework for development-​based energy transition policy-​making.   

The lens in the African Commission’s analysis turns procedural. It requires the state to act in a certain manner. It does not require a certain result. This is turn supports the appropriate balancing of different rights. It thus provides a means to use law as a problem-​solving tool. Importantly, the African Commission did not address the risk of climate change in its decision. It was concerned with environmental degradation. However, the logic of the Commission is applicable one to one in the energy transition setting.

B  International Trade and Investment Courts and Tribunals International economic law dispute resolution creates significant governance issues for energy transition. The issues in this context again can be attributed to a common concern—​a limitation by the dispute resolution bodies’ ability fully to appreciate the broader policy context in which governments make policy choices. This problem arises differently in different international economic law settings. This section will begin with a discussion of international trade law addressing solar project support in India in the India–​Solar Cells Dispute. It will then discuss international investment law jurisprudence in the context of oil developments and the Rockhopper Exploration Plc v Italy decision.

(1) Trade: India–​Solar Cells The India–​Solar Cells dispute on its face concerns a local content requirement in an area relevant to energy transition. It arose out of a domestic content requirement in solar PV projects. India in 2010 announced its National Solar Mission.79 India’s goal was to install solar PV generation capacity of 20,000 MW by 2022. This goal was increased further to 100 GW in 2015.80 India sought to achieve this goal by entering into power purchase agreements with power producers.81 These power

78 ibid 53. 79 For a discussion of the policy see Manoj Mate, ‘The WTO and Development Policy Space in India’ (2020) 45 YJIL 285, 302–​306. 80 ibid. 81 ibid.

International Fora and Energy Transition Implementation  313 purchase agreements included a local content requirement.82 It mandated the procurement of Indian-​sourced solar PV modules.83 These solar PV models were in fact more expensive than imported solar PV modules.84 The requirement of the local manufacture of core components is facially inconsistent with guarantees of national treatment in General Agreement on Tariffs and Trade (GATT) Article III and Article 2 of the Agreement on Trade-​Related Investment Measures (TRIMs).85 Relevantly, GATT Article III provides that states ‘recognize that . . . laws, regulations and requirements affecting the internal sale, . . . purchase, . . . distribution or use of products . . . should not be applied to imported or domestic products so as to afford protection to domestic production’.86 Further, the ‘products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use’.87 Article 2 of TRIMs also requires national treatment, appending an illustrative list of potential violations.88 The illustrative list includes measures necessary to ‘obtain an advantage’, and specifically require ‘the purchase or use by an enterprise of products of domestic origin or from any domestic source, whether specified in terms of particular products, in terms of volume or value of products, or in terms of a proportion of volume or value of its local production’.89 GATT provides two potential defences for such local content requirements. GATT Article III.8 stipulates that national treatment obligations do not apply ‘to laws regulations or requirements governing the procurement by governmental agencies of products purchased for governmental purposes and not with a view to commercial resale or with a view to use in the production of goods for commercial sale’.90 GATT Article XX, further, codifies general exceptions for measures ‘necessary to protect human, animal or plant life or health’ or ‘essential to the acquisition or distribution of products in general or local short supply’.91 82 ibid. 83 ibid. 84 Emiliano Bellini, ‘Local Content Requirement Costs for Large-​Scale PV in India’ PV Magazine (11 September 2020) https://​www.pv-​magaz​ine.com/​2020/​09/​11/​local-​cont​ent-​requ​irem​ent-​costs-​for-​ large-​scale-​pv-​in-​india/​. 85 General Agreement on Tariffs and Trade, Marrakesh Agreement establishing the World Trade Organization Annex 1A (15 April 1994) 1867 UNTS 187; General Agreement on Tariffs and Trade (30 October 1947) art III, 55 UNTS 194; Agreement on Trade-​Related Investment Measures, Marrakesh Agreement establishing the World Trade Organization Annex 1A (15 April 1994) 1868 UNTS 186. 86 General Agreement on Tariffs and Trade (30 October 1947) art III:1, 55 UNTS 194. 87 ibid art III:4. 88 Agreement on Trade-​Related Investment Measures (TRIMs), Marrakesh Agreement Establishing the World Trade Organization Annex 1A (15 April 1994) art 2, 1868 UNTS 186. 89 ibid Annex, 1(a). 90 General Agreement on Tariffs and Trade (n 86) art III:8(a). 91 ibid art XX(b),(j) 55 UNTS 194.

314  Liability and Dispute Settlement The US brought proceedings against India, arguing that the local content requirement in the National Solar Mission violated GATT Article III and Article 2 of TRIMs. India relied on the exceptions in Article XX of GATT. India failed to satisfy the WTO Appellate Body that the relevant exceptions were in fact applicable and lost on national treatment grounds.92 General exceptions jurisprudence of the WTO Appellate Body in the solar industry context is potentially in tension with the human rights-​based climate advisory opinions and national court opinions discussed so far.   

This result is problematic if considered through the lens of the Energy Transition Principles. The support of local content is a traditional policy goal underlying the structuring of traditional hydrocarbons and renewable energy projects. Local content safeguards energy sovereignty and energy security by shortening key energy value chains. Renewable energy competes with and displaces traditional technology and can be can be destructive to local industry.93 Leading experts have argued that in the case of ‘a new potential market where entry is costly and where future profits are uncertain and depend on information that cannot be known until the market is active’ state intervention is needed because ‘the absence of state intervention leads to the “free rider” phenomenon, which results in delay or even an impasse in creating a market’.94 As a matter of sound economics, ‘[p]‌olicymakers should first address economic and social priorities such as fighting climate change and developing renewable energy’.95 State interventions are therefore prudent to create conditions in which market competition becomes possible. Viewed through this lens, national treatment as interpreted in India–​Solar Cells is problematic. The juxtaposition of India–​Solar Cells and human rights case law suggests an inconsistency. The human rights lens requires state action with regard to climate change to respect the right to life and fulfil the right to a healthy environment. Article XX would appear to apply to such policies. Human rights commands and trade exceptions are not evenly matched. This uneven match is not a self-​contradiction. Thus, India could theoretically comply with both regimes by relying on foreign manufactured solar components to support its own energy transition. Requiring India to take such an approach would run into tension with the principle of differentiated responsibility.96 The

92 Appellate Body Reports, India—​Certain Measures Relating to Solar Cells and Solar Modules, WT/​ DS456/​AB/​R (adopted 14 October 2016). 93 Philippe Aghion and others, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations (HUP 2020). 94 ibid 69. 95 ibid 70. 96 See Frederic G Sourgens, ‘A Parisian Consensus’ (2022) 60 CJTL 657.

International Fora and Energy Transition Implementation  315 Paris Agreement was concluded at the same time as the India–​Solar Cells dispute. The National Solar Mission was a means for India to reduce greenhouse gas emissions. A claim by the US that India is violating national treatment undercuts the idea of support for states like India that did not previously have any mitigation responsibilities. Truly differentiated responsibility in this context would appear to permit at least some derogation from national treatment obligations for the development of new projects that are intended to reduce emissions. To enjoin such programs is to force states in India’s position either not to reduce emissions or to do so by paying for technology developed in the Global North as opposed by relying on domestic ingenuity. Either approach appears inconsistent with the purpose of differentiated responsibility. The logic may even support anticompetitive conduct in its own right. National treatment protections may provide an unearned first mover advantage to companies from the US (and Europe). This advantage is unearned because the first movers were themselves the beneficiaries of local content protections to support the creation of the renewables market.97 Given this reasoning, the Article XX arguments focused on energy security should be significantly more compelling. In short, cases like India–​Solar Cells reveal a risk of an inconsistency between the climate regime and the trade regime. This risk arises when regimes are narrowly focused inward and treat questions as binary yes-​no questions. As outlined above, a more nuanced approach would allow states broader latitude of action while protecting the inherent purpose of the constituent regime. Such an approach might look at failures of technology transfer. They might consider the overall effect on innovation by state support for energy companies. They might consider the past practice of states like the US in developing their own energy industry, etc. All of these are factors that could provide a more nuanced picture that would meaningfully help rather than hinder the orderly implementation of the Energy Transition Principles. It is important to note that the problem in the context of trade adjudication again may well be less pronounced than one might fear. Energy transition requires global cooperation. The principle of national treatment—​and of an energy transition driven by open global trade is vital to its accomplishment. Without globally open markets, energy transition is not possible for the reasons outlined elsewhere in this book. There is thus no blanket exception for policies like the National Solar Mission. India–​Solar Cells thus is correct in pointing out that national treatment must remain applicable to energy transition in principle. This does not mean that national treatment gets to override other policy commitments made by states in international treaties in other areas of international law. Instead, there

97 See Giuliano Garavini, The Rise and Fall of OPEC in the Twentieth Century (OUP 2019) 276 (detailing the investment in renewables as a US response to an external oil shock).

316  Liability and Dispute Settlement needs to be, once again, a balancing policy-​making exercise considering specific circumstances.

(2) Investment: Rockhopper Exploration Plc v Italy The Rockhopper Exploration Plc v Italy dispute concerns a permitting decision in an area relevant to energy transition. Rockhopper Exploration Plc commenced an arbitration against Italy under the Energy Charter Treaty following Italy’s refusal to grant Rockhopper Exploration Plc an oil exploitation licence for an offshore oil block along Italy’s Adriatic coast.98 The Italian government refused to issue the licence due to stakeholder protests against the project—​protests which formed part of a larger political dispute about the extent of federal as opposed to regional power with regard to such projects.99 It did so on the basis of a law of general application enjoining the further issuance of such licences, passed in late 2015.100 Rockhopper Exploration Plc alleged that the failure to issue the licence constituted an expropriation.101 The Rockhopper Exploration Plc v Italy tribunal agreed and ordered Italy to pay Rockhopper Exploration Plc €190 million in compensation.102 The Rockhopper Exploration Plc v Italy decision has come under criticism.103 Much as the India–​Solar Cells dispute, critics of the Rockhopper v Italy award argued that the Rockhopper tribunal seems to have taken a narrow view with regard to applicable law. That is, it appears to have given supremacy to investment law protections and energy security concerns over climate change and community participation concerns.104 The combination of significant community protest against a project with a €190 million liability against Italy would suggest that such criticism is facially appropriate. The criticism of the Rockhopper Exploration Plc v Italy does not reflect the decision-​ making process of the Rockhopper tribunal.105 The Rockhopper 98 Rockhopper Exploration Plc v Italy, ICSID Case No ARB/​17/​14, Award (23 August 2022) para 90; for the location of the Ombrina Mare area see Bojan Lepic, ‘Rockhopper to Resolve Ombrina Mare arbitration in July’ Offshore Energy (17 May 2021) https://​www.offsh​ore-​ene​rgy.biz/​roc​khop​per-​to-​reso​ lve-​ombr​ina-​mare-​arbi​trat​ion-​in-​july/​. 99 Rockhopper Exploration Plc v Italy (n 98)para 114. 100 ibid 193. 101 ibid 184–​88. 102 ibid 335. 103 For such a reaction in the general press see Arthur Neslen, ‘Oil Firm Rockhopper Wins £210M Payout After Being Banner from Drilling’ Guardian (24 August 2022) https://​www.theg​uard​ian.com/​ busin​ess/​2022/​aug/​24/​oil-​firm-​roc​khop​per-​wins-​210m-​pay​out-​after-​being-​ban​ned-​from-​drill​ing; for a scholarly engagement of the award reaching a similar result see Toni Marzal, ‘Polluter Doesn’t Pay: The Rockhopper v. Italy Award’ EJIL:Talk! (19 January 2023) https://​www.ejilt​alk.org/​pollu​ter-​doe​snt-​pay-​ the-​roc​khop​per-​v-​italy-​award/​. Prior to the decision’s issuance, some commentators used a similar frame for the dispute. See Paula Henin, ‘Adjudicating States’ International Climate Change Obligations Before International Courts and Tribunals’ (2019) 113 American Society of Intl L Proceedings 201, 204. 104 See Marzal (n 103). 105 See Paolo Mazzotti, ‘Rockhopper v. Italy and the Tension between ISDS and Climate Policy, A Missed Moment of Truth?’ Völkerrechtsblog (21 December 2022) https://​voelke​rrec​htsb​log.org/​de/​

International Fora and Energy Transition Implementation  317 Exploration Plc v Italy tribunal made its liability determination on the narrowest of bases of ‘the specific set of circumstances to which the facts of this case have given rise’.106 It determined that Rockhopper Exploration Plc on 14 August 2015 had completed all steps to obtain a production licence.107 Importantly, at that time, Italy had signed off on an environmental impact assessment sufficient for the project to go forward.108 Two weeks after 14 August 2015, by operation of Italian law, Rockhopper Exploration Plc held a vested right to be granted a production concession.109 The Rockhopper Exploration Plc v Italy tribunal was careful to point out that as of this time, there was no legal impediment to the issuance of the production concession—​the December 2015 legislation on the basis of which the production concession was not issued was not yet in place.110 Some have criticized the award because it ‘hinges mainly on a subtler proposition: that environmental norms and considerations are irrelevant in determining, from a strictly ‘legal’ point of view, first whether an expropriation took place, and second the amount of compensation owed to the investor’.111 This line of criticism goes on that the tribunal members were ‘[t]‌urning a blind eye to the environmental dimension of the affair’ in a manner that was ‘profoundly objectionable, and has the effect of rendering climate legislation significantly more costly’.112 The unanimity of the tribunal further served as a basis to question not just the decision-​making in Rockhopper Exploration Plc v Italy but investment arbitration in general.113 This criticism seeks to revive the charge that the tribunal simply made a categorical decision, preferring one set of principles (investment protection/​energy security) over another (environmental protection).114 It argues that the treatment of the dispute in its factual context precisely worked such mischief.115 This criticism is unfair to the decision. The Rockhopper Exploration Plc v Italy tribunal refused to substitute its own judgment as to an appropriate exercise of environmental precaution for that of the Italian state. It took at face value that the implementation by Italian officials of Italian laws requiring a precautionary approach was in fact appropriately carried out.116 It therefore accepted that the policy balance struck at the relevant time was the yardstick against which to roc​khop​per-​v-​italy-​and-​the-​tens​ion-​betw​een-​isds-​and-​clim​ate-​pol​icy/​ (noting the limited record basis for the tribunal to take a more fundamental stance).

106

Rockhopper Exploration Plc v Italy (n 98) para 196. ibid 150. 108 ibid 124–​28. 109 ibid 150. 110 ibid 167, 193. 111 Marzal (n 103). 112 ibid. 113 ibid. 114 ibid. 115 ibid. 116 Rockhopper Exploration Plc v Italy (n 98) para 152. 107

318  Liability and Dispute Settlement measure allegations of international wrongfulness of state conduct.117 This yardstick provides as much contextual deference to the functioning of potentially conflicting policy processes within a state apparatus as is possible. To do otherwise, the Rockhopper Exploration Plc v Italy tribunal would have had to substitute its own judgment of appropriate environmental precaution for that of the Italian government. Italy did not advance a plea that its own conduct in the approval process of the Rockhopper Exploration Plc Ombrina Mare project was flawed or unlawful as a matter of Italian or international law.118 Such a decision by the tribunal sua sponte would have been extraordinary and potentially foolhardy given the record to which it had access.119 The Rockhopper Exploration Plc v Italy award is exemplary in reaching a narrow decision that fully credits the balancing exercise actually contemporaneously undertaken by governmental decision-​makers as a starting point for international legal analysis.   

In fact, the decision provides a blueprint for how tribunals should engage disputes in which balancing by policy-​makers are put in issue in the litigation context. The factual context of the dispute is most likely to provide a means to assess the extent to which governments participated in the bottom-​up energy transition governance process required by the Energy Transition Principles. Given the potential conflict in specific cases between different principles, this is not a decision that can be made in the abstract. Courts and tribunals therefore should follow the lead of the Rockhopper Exploration Plc v Italy tribunal in the manner of approaching the dispute resolution process in an energy transition context.

C  International Tribunal for the Law of the Sea The International Tribunal for the Law of the Sea (ITLOS) is at the time of writing engaged in an advisory opinion proceeding with regard to climate change. This opinion has significance for energy transition. The advisory proceedings were engaged by a request for an advisory opinion from the Commission of Small Island States on Climate Change and International Law on 12 December 2022,

117 ibid. 118 ibid 189. 119 ibid 89 (‘The factual background to this arbitration is, essentially, relatively clear and in many key respects, not the subject of dispute or controversy between the Parties. This observation emerges most particularly from the document which the Parties collaboratively prepared, namely, “Facts Not in Dispute” ’).

International Fora and Energy Transition Implementation  319 composed by Prime Minister Browne of Antigua and Barbuda and Prime Minister Natano of Tuvalu.120 The Commission of Small Island States on Climate Change and International Law referred a two-​part question for an advisory proceeding. The chapeau of the request inquires ‘[w]‌hat are the specific obligations of State Parties to the United Nations Convention on the Law of the Sea (the “UNCLOS”), including under Part XII’.121 The Commission of Small Island States on Climate Change and International Law then inquires specifically about obligations under UNCLOS ‘(a) to prevent, reduce and control pollution of the marine environment in relation to the deleterious effects that result or are likely to result from climate change, including through ocean warming and sea level rise, and ocean acidification, which are caused by anthropogenic greenhouse gas emissions into the atmosphere’ and ‘(b) to protect and preserve the marine environment in relation to climate change impacts, including ocean warming and sea level rise, and ocean acidification’.122 The application raises some concerns whether the advisory opinion mechanism might circumvent the ordinary procedure for contentious proceedings.123 It further raises issues regarding fact-​finding and the record basis on which an advisory opinion would be based.124 The manner in which the question is put to ITLOS practically suggests an exclusive focus on climate and environmental impacts of energy systems.125 Such a focus to the exclusion of a broader understanding of the functioning and importance of energy systems is potentially problematic. It is fair to surmise that an advisory opinion by ITLOS would not just be used for the sake of understanding the current state of the law. Rather, some seek to use such proceedings in order to guide future treaty negotiations, national court decisions, and global governance decision-​making processes.126

120 Letter from Commission of Small Island States on Climate Change and International Law to the Registrar of the International Tribunal for the Law of the Sea, ‘Re: Request for Advisory Opinion’ (12 December 2022) https://​www.itlos.org/​filead​min/​itlos/​docume​nts/​cases/​31/​Request_​fo​r_​Ad​viso​ry_​O​ pini​on_​C​OSIS​_​12.12.22.pdf. 121 ibid 2. 122 ibid. 123 For a discussion of the literature on this question see Brian McGarry and Francis Chávez Aco, ‘The Competence of the International Tribunal for the Law of the Sea in its New Advisory Proceedings on Climate Change’ EJIL:Talk! (16 December 2022) https://​www.ejilt​alk.org/​the-​com​pete​nce-​of-​the-​ intern​atio​nal-​tribu​nal-​for-​the-​law-​of-​the-​sea-​in-​its-​new-​advis​ory-​proc​eedi​ngs-​on-​clim​ate-​cha​nge/​. 124 Carlos A Cruz, ‘ITLOS Advisory Opinion on Climate Change and Oceans: Possibilities and Benefits’ OpinioJuris (21 July 2021) http://​opin​ioju​ris.org/​2021/​07/​21/​itlos-​advis​ory-​opin​ion-​on-​clim​ ate-​cha​nge-​and-​oce​ans-​possib​ilit​ies-​and-​benef​i ts/​. 125 See Letter from Commission of Small Island States on Climate Change and International Law to the Registrar of the International Tribunal for the Law of the Sea (n 120); on the mechanism for compiling such a factual environmental and climate-​specific record see Cruz (n 124). 126 See Philippe Sands, ‘Climate Change and the Rule of Law: Adjudicating the Future in International Law’ (2016) 28 J Environmental Law 19.

320  Liability and Dispute Settlement An ITLOS advisory opinion can helpfully clarify standards under UNCLOS guiding energy transition so long as it takes the conflicting obligations governing energy transition in their respective policy context into account.   

ITLOS’ task of assembling an adequate factual record is even more important in this instance. ITLOS is not limited in its advisory jurisdiction to the clarification of international legal standards under UNCLOS itself. Rather, it is empowered to consider other international law consistent with UNCLOS in its decision-​making.127 The factual record on the basis of which ITLOS will render its decision will be crucial to determining what other rules of international law ITLOS might consider and the extent to which these rules might be construed as being consistent or inconsistent with UNCLOS. The use of the advisory opinion procedure should therefore be seen with appropriate caution. An advisory opinion could clarify important standards impacting energy transition under UNCLOS. It further could provide a roadmap for nuanced decision-​making integrating the constituent areas of international governing the energy transition. At the same time, an advisory mechanism faces perils because advisory opinions almost by definition lack the detailed factual context provided by international legal disputes. Without such a record, it may therefore be possible for a decision-​making body to make a decision that will have unanticipated consequences when it is used in later governance processes. Diligent decision-​ makers are aware of such risks and provide a significant margin of manoeuvre in implementing the decision. ITLOS in the past has actively sought to provide parties with such room for action.128

D  The International Court of Justice The International Court of Justice (ICJ) at the time of writing is not seized of a request for an advisory opinion. Nevertheless, there is a growing movement towards the engagement of the advisory jurisdiction of the International Court of Justice.129 A group of states working hope to garner support for a UN General Assembly Resolution to ask for an advisory opinion.130 127 UNCLOS, art 293; Sub-​Regional Fisheries Commission (SRFC) List of cases: No 21, advisory opinion (2 April 2015) para 84. 128 Sub-​Regional Fisheries Commission (SRFC) (n 127)65–​68. 129 See Aaron Korman and Giselle Barcia, ‘Rethinking Climate Change: Towards an International Court of Justice Advisory Opinion’ (2016) 37 YJIL 35 (arguing for an ICJ advisory opinion from the perspective of a counsellor to the Palau Permanent Mission to the UN). 130 For a summary account of the genesis and development of this movement see Jorge E Viñuales and others, ‘Judging the Climate Crisis: The Role of the International Court of Justice in Addressing Environmental Harms’ (2021) 115 American Society of Intl L Proceedings 19.

International Fora and Energy Transition Implementation  321 As currently drafted, the proposed resolution would request an advisory opinion on two questions.131 First, it would ask for an opinion on ‘[w]‌hat are the obligations of States under international law to ensure the protection of the climate system and other parts of the environment from anthropogenic emissions of greenhouse gases for present and future generations’.132 Secondly, it would ask ‘[w]hat are the legal consequences under these obligations for States which, by their acts and omissions, have caused significant harm to the climate system and other parts of the environment’.133 This second question specifically is concerned with ‘[s]tates, including, in particular, small island developing States, which due to their geographical circumstances and level of development, are injured or specially affected by or are particularly vulnerable to the adverse effects of climate change’ and ‘[p]eoples and individuals of the present and future generations affected by the adverse effects of climate change’.134 As currently drafted, the request for an advisory opinion would ask the ICJ to have ‘particular regard’ for: (i) the Charter of the United Nations; (ii) the International Covenant on Civil and Political Rights; (iii) the International Covenant on Economic, Social and Cultural Rights; (iv) the United Nations Framework Convention on Climate Change; (v) the Paris Agreement; (vi) the United Nations Convention on the Law of the Sea; and (vii) the Universal Declaration of Human Rights. The request further identifies as areas on which it would for an opinion ‘the duty of due diligence’, ‘the principle of prevention of significant harm to the environment’, as well as ‘the duty to protect and preserve the marine environment’.135 The potential risks of an advisory procedure before the ICJ are arguably greater than the risks of an advisory procedure before ITLOS. The ICJ is the principal judicial organ of the United Nations.136 It is not limited in its competence to a particular area of international law.137 The specific areas of international law queried by the draft resolution are significant and wide-​ranging.138 As in the context of the ongoing ITLOS proceedings, the helpfulness of an ICJ advisory opinion would inevitably depend on the factual predicate on which it is based.139 Given the broad range of issues to be addressed, it would be difficult to

131 Vanuatu ICJ Initiative, Draft Resolution (22 January 2023) https://​www.van​uatu​icj.com/​res​ olut​ion. 132 ibid. 133 ibid. 134 ibid. 135 ibid. 136 UN Charter, art 92. 137 See Statute of the International Court of Justice, art 36. 138 Vanuatu ICJ Initiative (n 131). 139 The need to have recourse to facts does not remove a question from the ICJ’s advisory competence. Pierre D’Argent, ‘Advisory Opinions, Article 65’ in Andreas Zimmermann and others (eds), The Statute of the International Court of Justice: A Commentary (3rd edn, OUP 2019) 1787, 1796.

322  Liability and Dispute Settlement supply all of these facts to the Court. The consequences of different energy transition pathways for human rights for example would be difficult for the Court to opine upon in the abstract. The question at currently drafted would require it nevertheless to provide just such an abstract answer.140 For the reasons already set out in Chapter 12 and in the first part of this chapter, such an adjudicatory approach to energy transition is deeply problematic.141 Energy transition pathways have significant knock-​on effects. Policy-​making with regard to energy transition therefore is a balancing exercise. This balancing exercise is not a one-​size fit all proposition and is highly context dependent. To ask a court in the abstract how energy transition should proceed therefore is, to a point, to ask an inapposite question.142 Despite these issues, advice on the state of international law by the ICJ could in fact be highly welcome.143 The ICJ has significant experience in framing advisory opinions in a constructive manner.144 To the extent that the ICJ were to follow its historical practice of cautious advisory opinions, it is likely that an advisory decision would helpfully identify problems policy-​makers must endeavour to resolve to proceed along an appropriate energy transition pathway.

IV  Conclusion: The Role of Dispute Settlement Fora The discussion in this chapter has made clear that dispute resolution has a critical role to play in the implementation of the Energy Transition Principles. Domestic courts are constitutive actors in a bottom-​up governance approach. They can hold states to account internally. As such, they can create momentum for the achievement of energy transition goals. International courts and tribunal similarly have an important role to play. They can hold states to account externally. As such, they can identify minimum standards and police defection from collective action. The discussion in this chapter has made clear that there are core features of how courts and tribunals successfully navigate the difficult task of balancing different Energy Transition Principles against each other. These features can usefully 140 Vanuatu ICJ Initiative (n 131). 141 For a discussion of the problems of engaging the advisory jurisdiction of the ICJ in the climate change context see Daniel Bodansky, ‘The Role of the International Court of Justice in Addressing Climate Change: Some Preliminary Reflections’ (2016) 49 Arizona State LJ 689. Despite the cautions raised by Bodansky, he ultimately believes that an advisory opinion could be constructive under then current circumstances. The Glasgow Climate Pact may suggest that there is momentum towards a negotiated, bottom-​up governance solution building on the success of the Paris Agreement. Nevertheless, the reasons articulated by Bodansky continue to hold true today. 142 Alan Boyle, ‘Remarks’ (2015) 109 American Society of Intl L Proceedings 198, 199. 143 Annalise Savaresi, Kati Kulovesi, and Harro van Asselt, ‘Beyond COP26: Time for an Advisory Opinion on Climate Change?’ EJIL:Talk! (17 December 2021) https://​www.ejilt​alk.org/​bey​ond-​cop26-​ time-​for-​an-​advis​ory-​opin​ion-​on-​clim​ate-​cha​nge/​. 144 See D’Argent (n 139)1810–​11 (evaluating ICJ advisory opinions).

Conclusion: The Role of Dispute Settlement Fora  323 be summed up in a four-​factor rubric. First, successful court intervention to the extent possible polices procedure. Secondly, it embeds disputes in their specific factual context. Thirdly, it helps future action by clarifying standards. Finally, it provides a tool to protect against retrogression.

A  Policing Procedure The Energy Transition Principles are problem-​solving tools. They are not intended for deployment by courts and tribunals in the first instance. Rather, they are tools that must be deployed by policy-​makers, taking into account the specific context for their action. As even the more intrusive decisions like Urgenda, the role of courts is to police that states engage in the right decision-​making process.145 Courts and tribunals can help guide energy transition decision-​making by focusing on and policing the process of energy transition policy-​making.   

The focus on procedure is at the heart of the approach taken by the African Commission on Human Rights.146 It looks to what policy-​makers did in adopting a particular policy or what policy-​makers failed to do in order to realize a particular right. It does not approach the question in the abstract or de novo. It accepts the starting point of governmental action and then assesses whether the manner in which governmental responses were fashioned is consistent with the requirements of international law. This focus leaves policy-​makers (and not courts) as the principal problem solvers in the energy transition context. It gives policy-​makers access to legal tools to solve energy transition problems, the Energy Transition Principles. Policy-​makers can then be held to account for how they solve problems by the courts. The focus is not on what solutions policy-​makers try. The focus is instead on whether policy-​ makers appropriately try to solve energy transition problems in a holistic manner.

B  Embedding Disputes in their Context Assessing whether policy-​makers appropriately try to solve energy transition problems in a holistic manner requires courts and tribunal to embed disputes in their full factual context. No two contexts are alike. This means that policy-​makers solve fundamentally different energy transition problems. A problem solution that

145 146

Urgenda (n 11) para 5.3.3. African Commission on Human and Peoples’ Rights (n 73).

324  Liability and Dispute Settlement works in one context is not guaranteed to work in another. To assess whether a particular approach to energy transition governance was consistent with international law therefore requires a thorough understanding of the context in which a decision was made. Courts and tribunals can assist in the constructive resolution of disputes when they fully embed decisions in the policy-​making context in which the disputes arose.   

Rockhopper Exploration Plc v Italy is exemplary in situating a decision-​making process in a specific record. It is exemplary as a matter of how the record was assembled—​as the Rockhopper Exploration tribunal notes, the operative facts were largely agreed upon by the parties. The parties in other words did not disagree with regard to the context in which Italian policy-​makers made relevant decisions and how they made the decisions. The Rockhopper Exploration tribunal limited its determinations to this record and decided the dispute as narrowly as possible.147 This approach tests the manner in which decisions are made. It does not seek to answer the questions left in the first instance to policy-​makers. It thus protects the integrity of decision-​making at the policy level. It does not displace policy-​making in litigation. Rather, it holds policy-​makers to their respective tasks.

C  Clarifying Standards Even in the context of such a deferential approach to policy-​making, policy-​ makers still require help and input from judicial fora. The Energy Transition Principles are highly abstract. To implement these principles requires further clarification of the legal standards themselves. Courts and tribunal clarify these legal standards. They do so when they resolve contentious disputes. The result of these dispute resolution procedures provides examples of how decision-​making should proceed. It therefore helps to provide clarity to legal principles through concrete application. These instances of concrete application can serve as case studies for future policy-​makers. Courts and tribunals can assist energy transition policy-​making by clarifying the applicable legal standards to be respected, protected, and fulfilled by policy-​makers.   



147

Rockhopper Exploration Plc v Italy (n 98) para 114.

Conclusion: The Role of Dispute Settlement Fora  325 Similarly, the advisory capacity of judicial organs can help to provide further clarity with regard to applicable legal standards. Here, advisory opinions provide a more detailed elucidation of the concerns that policy-​makers must bear in mind and include in their energy transition decision-​making processes. Such advice remains just that—​advice. It is not intended to—​nor is able to—​displace the specific policy-​making tasks of decision-​makers faced with particular problems in their specific contexts. In any case, courts should be circumspect when issuing advice because of the weight it can carry for future legal disputes.

D  Guarding against Retrogression The final task of courts and tribunals is to protect stakeholders against retrogression in the fulfilment of the Energy Transition Principles. The underlying legal principles discussed in this book all aim to a progressive realization of outcomes. They seek to build a global energy system that avoids climate catastrophe and sets the table for a fair, open, and equal world economy. These tasks are not accomplished in the short term. They require long-​term action. Courts and tribunals serve as an important check against energy transition policies that risk retrogression in the fulfilment of existing rights.   

Part of this long-​term action is to safeguard against backsliding. The tasks ahead are momentous. This means that there will at times be significant temptations to impose undue burdens on some members of world society in order to make the task of energy transition easier on oneself. Courts and tribunals have a critical role in preventing such retrogression in the fulfilment of energy transition goals. They are guardians of community and communal action. In this capacity, they safeguard that progress is maintained and benefits and burdens are appropriately shared. Courts and tribunals therefore are vital partners in the implementation of the Energy Transition Principles. Their role is not to ‘solve climate change’ or energy transition. Their role is to support, guide and protect the bottom-​up governance processes that are currently under way. This role remains crucial even in a legal conception that focuses on policy-​makers in the first instance. It holds policy-​ makers to account and assists them in their tasks. In this role, court and tribunals safeguard that energy transition policy-​making continues as a cooperative enterprise governed by the rule of law for the benefit of world society as a whole.

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332 References ‘2019 Fiat 500’ USDE https://​www.fuel​econ​omy.gov/​feg/​nofra​mes/​41149.shtml. ‘An Analysis of Lithium-​ion Battery Fires in Waste Management and Recycling’ US EPA (July 2021) EPA 530 R-​21-​002. ‘China Naval Modernization, Implications for US Navy Capabilities: Background Issues for Congress’ (8 March 2022) Congressional Research Service. ‘Coal Explained, Coal and the Environment’ USEIA (16 November 2022) https://​www.eia. gov/​ener​gyex​plai​ned/​coal/​coal-​and-​the-​envi​ronm​ent.php. ‘Countries & Regions (2019 Statistics)’USTR https://​ustr.gov/​countr​ies-​regi​ons. ‘Cost and Performance Characteristics of New Generating Technologies, Annual Energy Outlook 2022’ USEIA (March 2022) https://​www.eia.gov/​outlo​oks/​aeo/​assu​mpti​ons/​ pdf/​tabl​e_​8.2.pdf. ‘DOE Finds Record Production and Job Growth in US Wind Power Sector’ USDE (16 August 2022) https://​www.ene​rgy.gov/​artic​les/​doe-​finds-​rec​ord-​pro​duct​ion-​and-​job-​ gro​wth-​us-​wind-​power-​sec​tor. ‘Electricity Generation, Geothermal Technologies Office’ USDE (2023) https://​www.ene​rgy. gov/​eere/​geo​ther​mal/​elec​tric​ity-​gen​erat​ion. ‘Fertilizers & Pesticides’ USDA (2023) https://​www.ers.usda.gov/​top​ics/​farm-​practi​ces-​ man​agem​ent/​fert​iliz​ers-​pes​tici​des/​. ‘Global price of Brent Crude’ Federal Reserve Economic Data (FRED) Federal Reserve Bank of St Louis (3 January 2023) https://​fred.stl​ouis​fed.org/​ser​ies/​POIL​BREU​SDM. ‘Greenhouse Gas Emissions from a Typical Passenger Vehicle’ EPA (2023) https://​www.epa. gov/​greenv​ehic​les/​gre​enho​use-​gas-​emissi​ons-​typi​cal-​passen​ger-​vehi​cle. ‘How Do Wind Turbines Work?’ USDE (2023) https://​www.ene​rgy.gov/​eere/​wind/​how-​do-​ wind-​turbi​nes-​work. ‘How Much Energy Is Lost in Electricity Transmission and Distribution in the United States? (4 November 2021) USEIA https://​www.eia.gov/​tools/​faqs/​faq.php?id=​105&t=​3. ‘Hydrogen Explained’ USEIA (2022) https://​www.eia.gov/​ener​gyex​plai​ned/​hydro​gen/​use-​ of-​hydro​gen.php. ‘Hydropower, Supply Chain Deep Dive Assessment US Department of Energy Response to Executive Order 14017, ‘America’s Supply Chains’ at 23 (24 February 2022). International Energy Outlook (2016) USEIA https://​www.eia.gov/​outlo​oks/​ieo/​pdf/​ind​ustr​ ial.pdf. ‘Joint Statement Between the US Environmental Protection Agency and The Ministry of The Environment of Japan on Continued Bilateral Environmental Cooperation’ US Environmental Protection Agency (16 May 2016) https://​arch​ive.epa.gov/​epa/​newsr​elea​ ses/​joint-​statem​ent-​betw​een-​us-​enviro​nmen​tal-​pro​tect​ion-​age​ncy-​and-​minis​try-​envi​ ronm​ent.html. ‘Ocean Acidification’ USNOAA (2020) https://​www.noaa.gov/​educat​ion/​resou​rce-​coll​ecti​ ons/​ocean-​coa​sts/​ocean-​acidif​i cat​ion. ‘Short-​term Energy Outlook: Global Liquid Fuels’ (7 June 2022) USEIA https://​www.eia. gov/​outlo​oks/​steo/​rep​ort/​glo​bal_​oil.php. ‘South China Sea’ (15 October 2019) USEIA https://​www.eia.gov/​intern​atio​nal/​analy​sis/​ regi​ons-​of-​inter​est/​Sout​h_​Ch​ina_​Sea. ‘The United States Naval Nuclear Propulsion Program 2020, Over 166 Million Miles Safely Steamed on Nuclear Power’ (2020) US Department of Energy https://​www.ene​rgy.gov/​ sites/​defa​ult/​files/​2021-​07/​2020%20Uni​ted%20Sta​tes%20Na​val%20Nucl​ear%20Pro​puls​ ion%20Prog​ram%20v3.pdf. ‘Useful Life’ National Renewable Energy Laboratories (2023) https://​www.nrel.gov/​analy​ sis/​tech-​footpr​int.html.

References  333 ‘US Oil and Natural Gas: Providing Energy Security and Supporting Our Quality of Life’ USDE (5 October 2020) https://​www.ene​rgy.gov/​sites/​prod/​files/​2020/​10/​f79/​Natu​ ral%20Gas%20B​enef​i ts%20Rep​ort.pdf. ‘What is a Circular Economy?’ US Environmental Protection Agency (2023) https://​www. epa.gov/​recycl​ings​trat​egy/​what-​circu​lar-​econ​omy. ‘Wind Manufacturing and Supply Chain’ USDE (2023) https://​www.ene​rgy.gov/​eere/​wind/​ wind-​manufa​ctur​ing-​and-​sup​ply-​chain.

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Industry Reports Sertaç Akar and others, ‘Global Value Chain and Manufacturing Analysis on Geothermal Power Plant Turbines’ (September 2018) Clean Energy Manufacturing Analysis Center https://​www.nrel.gov/​docs/​fy18o​sti/​71128.pdf. Lisa Beilfuss, ‘The Economic Impact of Risking Gas Prices Is Trickier than It Seems’ (29 March 2022) Barron’s https://​www.barr​ons.com/​artic​les/​gas-​pri​ces-​inflat​ion-​5164​8563​095. Yoana Cholteeva, ‘The State of Solar Glass’ (2 February 2021) Power Technology https://​ www.power-​tec​hnol​ogy.com/​analy​sis/​the-​state-​of-​solar-​glass/​. Daniel Gross, ‘Rethinking Spare Capacity’ (22 October 2021) Strategy+​Business https://​ www.strat​egy-​busin​ess.com/​blog/​Ret​hink​ing-​spare-​capac​ity.

334 References Max Hall, ‘Polysilicon Maker Predicts 5-​Year Shortage of Solar Raw Material’ (20 April 2022) PV Magazine https://​www.pv-​magaz​ine.com/​2022/​04/​20/​poly​sili​con-​maker-​ predi​cts-​5-​year-​short​age-​of-​solar-​raw-​mater​ial/​. Paul Hickin and Eklavya Gupte, ‘Fuel for Thought: Spare Capacity in Focus as OPEC+​ Output Hikes Coincide with Rising Oil Security Risks’ (21 September 2021) S&P Global https://​www.spglo​bal.com/​commod​ityi​nsig​hts/​en/​mar​ket-​insig​hts/​blogs/​oil/​092​121-​ fft-​opec-​oil-​secur​ity-​risks-​spare-​capac​ity. Philipp Kampshoff and others, ‘Building the Electric-​Vehicle Charging Infrastructure America Needs’ (18 April 2022) McKinsey https://​www.mckin​sey.com/​ind​ustr​ies/​pub​ lic-​and-​soc​ial-​sec​tor/​our-​insig​hts/​build​ing-​the-​elect​ric-​vehi​cle-​charg​ing-​inf​rast​ruct​ ure-​amer​ica-​needs. Matthias Lang, ‘Coal Exit “on Hold” Statutory Update: Germany to Prepare for Potential Gas Shortage’ Bird & Bird (8 July 2022) https://​www.twobi​rds.com/​en/​insig​hts/​2022/​ germ​any/​statut​ory-​upd​ate-​germ​any-​to-​prep​are-​for-​potent​ial-​gas-​short​age. Peter Leon and others, ‘Model Mine Development Agreement’ International Bar Association (4 April 2011). Namit Sharma, Bram Smeets, and Christer Tryggestad, ‘The Decoupling of GDP and Energy Growth: A CEO Guide’ (24 April 2019) McKinsey https://​www.mckin​sey.com/​ind​ustr​ ies/​elect​ric-​power-​and-​natu​ral-​gas/​our-​insig​hts/​the-​dec​oupl​ing-​of-​gdp-​and-​ene​rgy-​ gro​wth-​a-​ceo-​guide. Imogen Rose Smith, ‘The Inconvenient Truth About ESG’ BNY Mellon (May 2020) https://​ www.bnymel​lon.com/​us/​en/​insig​hts/​aer​ial-​view-​magaz​ine/​the-​incon​veni​ent-​truth-​ about-​esg.html. Humayun Tai and others, ‘The Energy Transition: A Region-​by-​Region Agenda for Near Term Action’ McKinsey & Company (December 2022) 52, https://​www.mckin​sey.com/​ ~/​media/​mckin​sey/​ind​ustr​ies/​elect​ric%20po​wer%20and%20natu​ral%20gas/​our%20i​ nsig​hts/​the%20ene​rgy%20tra​nsit​ion%20a%20reg​ion%20by%20reg​ion%20age​nda%20 for%20n​ear%20t​erm%20act​ion/​the-​ene​rgy-​tra​nsit​ion-​a-​reg​ion-​by-​reg​ion-​age​nda-​for-​ near-​term-​act​ion-​final.pdf. BP, 2021 Sustainability Report at 16 https://​www.bp.com/​cont​ent/​dam/​bp/​busin​ess-​sites/​ en/ ​ g lo​ b al/ ​ c orpor​ ate/​ p dfs/​ sus​ t ain​ abil​ ity/​ g roup-​ repo​ r ts/​ bp-​ sus​ t ain​ abil​ ity-​ rep​ ort-​ 2021.pdf. ‘The CCUS Hub Playbook, A Guide for Regulators, Industrial Emitters and Hub Developers’ at 14, Oil and Gas Climate Initiative (2022) https://​f.hubsp​otus​erco​nten​t30.net/​hubfs/​ 3971​732/​220​304%20C​CUS%20P​layb​ook%20(1).pdf. Chevron, 2021 Corporate Sustainability Report at 39 (2022) https://​www.chev​ron.com/​-​/​ media/​sha​red-​media/​docume​nts/​chev​ron-​sus​tain​abil​ity-​rep​ort-​2021.pdf. ConocoPhillips, 2021 Sustainability Report, 101–​102 (2021) https://​sta​tic.con​ocop​hill​ips. com/​files/​resour​ces/​con​ocop​hill​ips-​2021-​sus​tain​abil​ity-​rep​ort.pdf. ‘Crews Complete Closed Vessel and Safety Testing on Vogtle Nuclear Unit 3 Reactor’ (14 July 2020) Bechtel https://​www.bech​tel.com/​newsr​oom/​cover​age/​2020/​crews-​compl​ete-​ clo​sed-​ves​sel-​and-​saf​ety-​test​ing/​. ‘Direct Air Capture: A Technology to Remove CO2’ ClimeWorks AG (2023) https://​cli​mewo​ rks.com/​co2-​remo​val. Enbridge Inc. Indigenous Peoples Policy (August 2022) https://​www.enbri​dge.com/​-​/​ media/​Enb/​Docume​nts/​About-​Us/​indi​geno​us_​p​eopl​es_​p​olic​y_​fi​nal.pdf?rev=​839a8​ 8ff9​6574​65aa​0b03​9d13​9d98​166&hash=​B98D0​8567​204E​4E24​68FA​166E​F955​E88. ExxonMobil, Sustainability Report (December 2022) 63 https://​corpor​ate.exx​onmo​bil. com/​-​/​media/​glo​bal/​files/​sus​tain​abil​ity-​rep​ort/​publ​icat​ion/​exx​onmo​bil-​sus​tain​abil​ity-​ rep​ort.pdf.

References  335 ‘Iran Sanctions: Global Energy Implications’ SP Global (9 May 2018) https://​www.spglo​bal. com/​en/​resea​rch-​insig​hts/​artic​les/​iran-​sancti​ons-​glo​bal-​ene​rgy-​impli​cati​ons. ‘Iron and Steel Industry Report’ Deloitte (2017) https://​www2.deloi​tte.com/​am/​en/​pages/​ manufa​ctur​ing/​artic​les/​iron-​and-​steel-​indus​try-​rep​ort.html. ‘Japan’s Energy Supply Situation and Basic Policy’ Federation of Electric Power Companies of Japan (2023) https://​www.fepc.or.jp/​engl​ish/​ene​rgy_​elec​tric​ity/​suppl​y_​si​tuat​ion/​. Levelized Cost of Energy Analysis 15.0 (28 October 2021) Lazard https://​www.laz​ard.com/​ pers​pect​ive/​leveli​zed-​cost-​of-​ene​rgy-​leveli​zed-​cost-​of-​stor​age-​and-​leveli​zed-​cost-​of-​ hydro​gen/​. ‘Levelized Cost of Energy, Levelized Cost of Storage, and Levelized Cost of Hydrogen 2021’ (28 October 2021) Lazard https://​www.laz​ard.com/​pers​pect​ive/​leveli​zed-​cost-​of-​ene​ rgy-​leveli​zed-​cost-​of-​stor​age-​and-​leveli​zed-​cost-​of-​hydro​gen/​. ‘Raw Materials in Focus as Lithium-​Ion Battery Market Development Moves up a Gear’ (27 January 2017) Roskill https://​www.prn​ewsw​ire.com/​news-​relea​ses/​raw-​materi​als-​in-​ focus-​as-​lith​ium-​ion-​batt​ery-​mar​ket-​deve​lopm​ent-​moves-​up-​a-​gear-​611953​095.html. Rio Tinto, ‘Board Review of Cultural Heritage Management’ (23 August 2020). Shell, Protecting Biodiversity, 2021 Online Sustainability Report https://​repo​rts.shell.com/​ sus​tain​abil​ity-​rep​ort/​2021/​res​pect​ing-​nat​ure/​pro​tect​ing-​biodi​vers​ity.html. Shell, Working With Communities (2023) https://​www.shell.com/​sus​tain​abil​ity/​comm​unit​ ies/​work​ing-​with-​comm​unit​ies.html. Statistical Review of World Energy: 2021 (2021) BP https://​www.bp.com/​cont​ent/​dam/​bp/​ busin​ess-​sites/​en/​glo​bal/​corpor​ate/​pdfs/​ene​rgy-​econom​ics/​stat​isti​cal-​rev​iew/​bp-​stats-​ rev​iew-​2021-​indone​sia-​insig​hts.pdf. ‘The Solar Value Chain: Value Chain Segments & Activities’ Green Rhino Energy http://​ www.green​rhin​oene​rgy.com/​solar/​indus​try/​ind​_​val​uech​ain.php. TotalEnergies, 2021 Universal Registration Document including Annual Financial Report at 26-​27, https://​totale​nerg​ies.com/​sites/​g/​files/​nytnzq​121/​files/​docume​nts/​2022-​05/​ TotalEner​gies​_​URD​_​202​1_​EN​_​acc​essi​ble.pdf. ‘Turbine: Generator Unit’ Hydro Québec (2023) http://​www.hydr​oque​bec.com/​learn​ing/​ hydro​elec​tric​ite/​turb​ine-​alte​rnat​eur.html. ‘The Turning Point: A New Economic Climate in the United States’ Deloitte (January 2022) https://​www2.deloi​tte.com/​cont​ent/​dam/​Deloi​tte/​us/​Docume​nts/​about-​deloi​tte/​us-​ the-​turn​ing-​point-​a-​new-​econo​mic-​clim​ate-​in-​the-​uni​ted-​sta​tes-​janu​ary-​2022.pdf. ‘What’s Next for Oil and Gas Prices as Sanctions on Russia Intensify’ (10 March 2022) JP Morgan https://​www.jpmor​gan.com/​insig​hts/​resea​rch/​oil-​gas-​ene​rgy-​pri​ces.

Books Daron Acemoglu and James A Robinson, The Narrow Corridor: States, Societies and the Fate of Liberty (Penguin 2019). Philippe Aghion and Peter Howitt, Endogenous Growth Theory (MIT Press 1998). Philippe Aghion and others, The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations (HUP 2021). Marco Alverà, The Hydrogen Revolution: A Blueprint for the Future of Clean Energy (Basic Books 2021). Robert Z Aliber and Charles P Kindleberger, Manias, Panics, and Crashes: A History of Financial Crises (7th edn, Palgrave MacMillan 2015). Owen Anderson and others, International Petroleum Law and Transactions (Palgrave MacMillan 2020).

336 References Antony Anghie, Imperialism, Sovereignty and the Making of International Law (CUP 2004). James Annaya, Indigenous Peoples in International Law (2nd edn, OUP 2004). The Complete Works of Aristotle: The Revised Oxford Translation, vol 2 (Jonathan Barnes (ed), PUP 1984). Binyamin Appelbaum, The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society (Little, Brown & Company 2019). David J Attard and others, The IMLI Manual on International Maritime Law: Volume I: The Law of the Sea (OUP 2014). David J Attard and others, The IMLI Manual on International Maritime Law: Volume III: Marine Environment and International Maritime Security (OUP 2016). Dolores L Augustine, Taking on Technocracy, Nuclear Power in Germany: 1945 to the Present (Berghahn Books 2018). John Langshaw Austin, How to Do Things with Words (2nd edn, HUP 1975). Margarita Mercedes Balmaceda, Russian Energy Chains: The Remaking of Technopolitics from Siberia to Ukraine to the European Union (CoUP 2021). Abijit Banerjee and Esther Duflo, Good Economics for Hard Times (Public Affairs 2019). Pamela Barnes and Ian Barnes, The Politics of Nuclear Energy in the European Union. Framing the Discourse: Actors, Positions and the Dynamics (Barbara Budrich Publishers 2018). Klaus Peter Berger, The Creeping Codification of the New Lex Mercatoria (2nd edn, Kluwer 2010). Samantha Besson, La due diligence en droit international (Brill Nijhoff 2021). Patricia Birnie and others, International Law and the Environment (3rd edn, OUP 2009). Edith Brown Weiss, Establishing Norms in a Kaleidoscopic World (Brill Nijhoff 2020). Jutta Brunnée, Procedure and Substance in International Environmental Law (Brill Nijhoff 2020). Will Burns and others, Climate Change Geoengineering: Philosophical Perspectives, Legal Issues, and Governance Frameworks (CUP 2013). Elin Lerum Boasson, Merethe Dotterud Leiren, and Jørgen Wettestad (eds), Comparative Renewables Policy: Political, Organizational and European Fields (Routledge 2012). Daniel Bodansky and others, International Climate Change Law (OUP 2017). David Bodansky, Nuclear Energy: Principles, Practices, and Prospects (2nd edn, Springer 2004). Anatole Boute, Energy Security Along the New Silk Road Energy Law and Geopolitics in Central Asia (CUP 2019). Kent E Calder, Global Political Cities: Actors and Arenas of Influence in International Affairs (Brookings Institution 2021). Gralf-​Peter Calliess and Peer Zumbansen, Rough Consensus and Running Code: A Theory of Transnational Private Law (Hart Publishing 2010). Peter D Cameron, International Energy Investment Law: The Pursuit of Stability (2nd edn, OUP 2021). Cinnamon Carlarne and others, The Oxford Handbook of International Climate Change Law (OUP 2016). Bruno Ceccaroli and others, Solar Silicon Processes: Technologies, Challenges, and Opportunities (CRC Press 2016). Annie Chamoulaud-​Trapiers, Droits des Biens (2nd edn, Breal 2007). Bin Cheng, General Principles of Law as Applied by International Courts and Tribunals (CUP 2006). Robert Cooper, The Ambassadors: Thinking about Diplomacy from Richelieu to Modern Times (Weidenfeld & Nicolson 2021). Diane Coyle, Cogs and Monsters: What Economics Is, and What It Should Be (PUP 2021).

References  337 James Crawford, The Creation of States in International Law (2nd edn, OUP 2007). James Crawford, State Responsibility: The General Part (CUP 2013). Dante Alighieri, The Divine Comedy (Henry Wadsworth Longfellow tr, Sterling Publishing 2016). Jean d’Aspremont, The Discourse on Customary International Law (OUP 2021). Suneel Deambi, From Sunlight to Electricity: A Practical Handbook on Solar Photovoltaic Applications (Energy & Resources Institute 2015). Vladimir Degan, Sources of International Law (Martinus Nijhoff 1997). Diane Desierto, Public Policy in International Economic Law: The ICESCR in Trade, Finance, and Investment (OUP 2015). Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law (2nd edn, OUP 2012). Zachary Douglas, The International Law of Investment Claims (CUP 2009). Christian Downie, The Politics of Climate Negotiations: Strategies and Variables in Prolonged International Negotiations (Edward Elgar Publishing 2014). Peter Drahos, Survival Governance: Energy and Climate in the Chinese Century (OUP 2021). Pierre-​ Marie Dupuy and others, Völkerrecht als Weltordnung: Common Values in International Law: Essays in Honour of Christian Tomuschat (Norbert P Engel 2006). Ronald Dworkin, Law’s Empire (HUP 1986). Charles D Ferguson, Nuclear Energy: What Everyone Needs to Know (OUP 2011). Andreas Fischer-​Lescano and Gunther Teubner, Regime-​Kollisionen: Zur Fragmentierung des globalen Rechts (Suhrkamp 2006). Caroline Foster, Science and the Precautionary Principle in International Courts and Tribunals: Expert Evidence, Burden of Proof and Finality (CUP 2011). Francis Fukuyama, The Origins of Political Order (Farrar, Straus & Giroux 2011). Francis Fukuyama, Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy (Farrar, Straus & Giroux 2014). Francis Fukuyama, Identity: The Demand for Dignity and the Politics of Resentment (Farrar 2018). Hans-​Georg Gadamer, Wahrheit und Methode: Grundzüge einer philosophischen Hermeneutik (Mohr Siebeck 1990). Giuliano Garavini, After Empires: European Integration, Decolonialization, and the Challenge from the Global South 1957–​1986 (Richard R Nybakken tr, OUP 2012). Giuliano Garavini, The Rise and Fall of OPEC in the Twentieth Century (OUP 2019). Richard Gardiner, Treaty Interpretation (2nd edn, OUP 2015). Stephen M Gardiner, A Perfect Moral Storm: The Ethical Tragedy of Climate Change (OUP 2011). Adom Getachew, Worldmaking After Empire: The Rise and Fall of Self-​Determination (PUP 2019). John D Graham, The Rise of the Modern Plug-​In Electric Vehicle: Public Policy, Innovation and Strategy (Edward Elgar Publishing 2021). Lakshman Guruswamy, International Energy and Poverty: The Emerging Contours (Routledge 2016). Clive Hamilton, Earthmasters: The Dawn of the Age of Climate Engineering (YUP 2013). Oona A Hathaway and Scott J Shapiro, The Internationalists: How a Radical Plan to Outlaw War Remade the World (Simon & Schuster 2017). Klaus Hack, SGTE Casebook (2nd edn, Woodhead Publishing 2008). Manfred Hafner and Simone Tagliapietra, The Geopolitics of the Global Energy Transition (Springer 2020).

338 References Wilthold J Henisz, Corporate Diplomacy: Building Reputations and Relationships with External Stakeholders (Routledge 2017). Ludovic Hennebel and Hélène Tigroudja, The American Convention on Human Rights: A Commentary (OUP 2022). Matthias Herdegen, Principles of International Economic Law (2nd edn, OUP 2016). Kaj Hobér, The Energy Charter Treaty (OUP 2020). Jessie Hoffmann and others, The UN Declaration on the Rights of Indigenous Peoples: A Commentary (OUP 2018). Stephen Holmes and Ivan Kratev, The Light that Failed: Why the West Is Losing the Fight for Democracy (Pegasus Books 2020). Steve Isser, Electricity Restructuring in the United States: Markets and Policy from the 1978 Energy Act to the Present (CUP 2015). Robert Jennings and Arthur Watts, Oppenheim’s International Law: Volume 1 Peace (9th edn, OUP 2008). Douglas M Johnston, The Historical Foundations of World Order: The Tower and the Arena (Martinus Nijhoff 2008). Donald Kagan, Pericles of Athens and the Birth of Democracy (The Free Press 1991). Matthew E Kahn, Adapting to Climate Change: Markets and the Management of an Uncertain Future (YUP 2021). Jacob Katz Cogan and others, The Oxford Handbook of International Organizations (OUP 2016). David Keith, A Case for Climate Engineering (MIT Press 2013). Daniel Klein and others, The Paris Agreement on Climate Change: Analysis and Commentary (OUP 2017). Natalie Klein and Kate Parlett, Judging the Law of the Sea (OUP 2022). Harold Koh, The Trump Administration and International Law (OUP 2019). Martti Koskenniemi, From Apology to Utopia: The Structure of International Legal Arguments (CUP 2005). Nico Krisch, Beyond Constitutionalism: The Pluralist Structure of Postnational Law (OUP 2010). Ursula Kriebaum, Christoph Schreuer, and Rudolf Dolzer, Principles of International Investment Law (3rd edn, OUP 2022). Paul Krugman, Rethinking International Trade (MIT Press 1994). Sir Hersch Lauterpacht, An International Bill of the Rights of Man (OUP 2013). Emma Lees and Jorge Viñuales, The Oxford Handbook of Comparative Environmental Law (OUP 2019). Jolene Lin, Governing Climate Change, Global Cities and Transnational Lawmaking (CUP 2018). Niklas Luhmann, Theory of Society, vol 1 (Rhodes Barrett tr, SUP 2012). Sara Lumbreras and others Transmission Expansion Planning: The Network Challenges of the Energy Transition (Springer 2020). Alasdair McIntyre, After Virtue: A Study in Moral Theory (Duckworth 1987). Campbell McLachlan and others, International Investment Arbitration: Substantive Principles (2nd edn, OUP 2017). Ruth Mackenzie and others The Manual on International Courts and Tribunals (2nd edn, OUP 2010). Anna-​Alexandra Marhold, Energy in International Trade: Concepts, Regulation and Changing Markets (CUP 2021). Mitsuo Matsushita and others, The World Trade Organization: Law, Practice, and Policy (3rd edn, OUP 2015).

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342 References Omar A Bakhashab, ‘Islamic Law and the Environment: Some Basic Principles’ (1998) 3 Arab L Quarterly 287. Jack Balkin, ‘Deconstructive Practice and Legal Theory’ (1987) 96 YLJ 743. Mauro Barelli, Free, Prior, and Informed Consent in the UNDRIP: Articles 10, 19, 29(2) and 32(2)’ in Jessie Hohmann and Marc Weller (eds), The UN Declaration on the Rights of Indigenous Peoples: A Commentary (OUP 2018) 247. Ana Elizabeth Bastida and Carlos Ciappa, ‘Community Development Agreements’ (2015) 3 RMMLF Institute 11B. Jonathan Baughman, ‘The Prudent Operator Standard in the 21st Century’ (2012) 58 RMMLF/​FNREL Institute 12–​1. Jelena Bäumler, ‘Sustainable Development Made Justiciable: The German Constitutional Court’s Climate Ruling on Intra-​and Inter-​Generational Equity’ EJIL:Talk! (8 June 2021) https://​www.ejilt​alk.org/​sust​aina​ble-​deve​lopm​ent-​made-​just​icia​ble-​the-​ger​man-​con​stit​ utio​nal-​cou​rts-​clim​ate-​rul​ing-​on-​intra-​and-​inter-​gener​atio​nal-​equ​ity/​. Jakub Benarek, ‘Is the EU Realizing an Externally Just Green Transition? A Short Analysis of the Carbon Border Adjustment Mechanism from the Perspective of the CBDR Principle and the Right to Development of LDCs’ EJIL:Talk! (31 October 2022) https://​www.ejilt​ alk.org/​is-​the-​eu-​realiz​ing-​an-​ext​erna​lly-​just-​green-​tra​nsit​ion-​a-​short-​analy​sis-​of-​the-​ car​bon-​bor​der-​adj​ustm​ent-​mechan​ism-​from-​the-​pers​pect​ive-​of-​the-​cbdr-​princi​ple-​ and-​the-​right-​to-​deve​lopm​ent-​of-​ldcs/​. Preeti Bhagnani, ‘Revisiting the Countermeasures Defense in Investor-​State Disputes: Approach and Analogies’ (2015) Yearbook on Intl Investment L and Policy 2013–​2014 437. Kristen Bindemann, ‘Production-​Sharing Agreements: An Economic Analysis’ Oxford Institute for Energy Studies WPM 25 (October 1999). Andrea Bjorklund, ‘Enforcement’ in Thomas Schultz and Federico Ortino (eds), The Oxford Handbook of International Arbitration (OUP 2020) 186. Daniel Bodansky, ‘The Legal Character of the Paris Agreement’ (2016) 25 Review of European, Comparative & Intl Env L 142. Daniel Bodansky, ‘The Role of the International Court of Justice in Addressing Climate Change: Some Preliminary Reflections’ (2016) 49 Arizona State LJ 689. Michael Joachim Bonell, ‘The Law Governing International Commercial Contracts and the Actual Role of the UNIDROIT Principles’ (2018) 23 ULR 15. Jason Bordoff and Meghan O’Sullivan, ‘The New Energy Order, How Governments Will Transform Energy Markets’ Foreign Affairs (July/​August 2022). Alan Boyle, ‘Remarks’ (2015) 109 American Society of Intl L Proceedings 198. Adam Branderburger and Barry Nalebuff, ‘The Rules of Co-​opetition’ (January-​February 2021) Harvard Business Review https://​hbr.org/​2021/​01/​the-​rules-​of-​co-​opetit​ion. Emmanuel Breen, ‘Corporations and US Economic Sanctions: the Dangers of Overcompliance’ in Charlotte Beaucillon (ed), Research Handbook on Extraterritorial Sanctions (Edward Elgar Publishing 2021) 256. Kristi Disney Bruckner, ‘Community Development Agreements in Mining Projects’ (2016) 44 Denver J Intl L and Policy 413. E Christian Brugger, ‘Reflections on the Moral Foundations of a Right to Energy’ in International Energy and Poverty: The Emerging Contours (Lakshman Guruswamy (ed), Routledge 2016) 68. Jutta Brunnée, ‘Harm Prevention’ in Lavanya Rajamaji and Jacqueline Peel (eds), The Oxford Handbook of International Environmental Law (2nd edn, OUP 2021) 269.

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Index For the benefit of digital users, indexed terms that span two pages (e.g., 52–​53) may, on occasion, appear on only one of those pages.  P1.5°C Temperature Goal  9, 10–​11, 21, 108, 109, 120–​21, 227 Aarhus Convention  179–​80 acid rain 50 adaptation  103, 132, 144–​45, 148–​50, 154, 172–​73, 220, 227, 249–​50, 255, 261, 266, 284–​85, 304 agriculture  21, 24, 25, 37, 44–​45, 281–​82 air conditioning 149 Ajibola, Femi 292 alternating current electricity  36–​37 aluminium  25, 42 ASEAN  189, 191, 192, 194 aviation  7–​8, 13 Bangladesh  6–​7 base load  5, 7, 38, 39, 40, 41, 223–​24, 236–​37 battery  28, 41–​43, 44, 190, 193–​94 Besson 259 Biden administration  233–​34 Biodiversity Convention  181–​82, 188 bottom up governance  53–​56, 58, 69, 71, 73–​74, 85, 96, 111, 153–​54, 175, 235, 236, 237, 238, 240, 241, 244, 245, 273–​74, 294, 299, 300–​1, 305, 306–​7, 318, 322, 325 British Columbia  62, 104–​5 Brundtland Report  133–​34, 138 CO2 emissions  9–​11, 12, 14, 17, 20, 22, 24–​25, 48, 49, 107, 110, 190 California 62 Canada  62, 104–​5 car /​automotive  3, 7–​8, 25, 29, 42, 193–​94 Carbon Border Adjustment Mechanism  57, 228 carbon capture/​carbon capture utilization and storage (CCUS)  16, 44, 47–​48, 51, 193–​94, 223, 225–​26, 236–​37, 240, 241–​43 carbonic acid 46–47 carbon sinks  14, 23, 35, 44, 46–​47, 49, 51 carbon neutral  12–​13, 40, 48, 224, 306 China  6–​7, 24–​25, 93–​94, 158, 184, 185–​86 circular carbon economy  190, 193–​94, 242 circular economy  189–​94, 198, 249

Clean Air Act  180–​81, 297 Clean Power Plan  81, 273–​74, 297–​98 Clean Water Act  180–​81 climate change  3, 4–​5, 8–​9, 15, 16, 19–​21, 22–​23, 24, 32, 49, 50–​51, 59, 68–​69, 88, 103, 107–​8, 109, 110, 120, 123–​24, 127, 128–​29, 131, 138, 142, 148–​50, 153, 172–​74, 175, 176, 194, 196, 217, 225–​26, 227, 233–​34, 243–​44, 246, 268, 302, 303, 306, 309–​10, 312, 314, 318–​19, 321, 325 climate impact assessment and monitoring principle 103 climate mitigation  8–​9, 16, 59, 107, 109–​10, 111, 112, 120, 123–​24, 128–​29, 148–​49, 150, 153, 173–​74, 202–​3, 225–​26, 240, 249–​50, 261, 264–​65, 266–​67, 268, 278, 284–​85, 288, 303–​4, 306, 307, 311, 314–​15 Clinton Administration 119 climate law  15, 16, 17, 72, 75, 103–​4, 107–​8, 110, 111, 120, 122, 131, 146, 147, 148, 175, 176, 177, 178, 219, 265, 266, 275 climate-​specific common but differentiated responsibility as cooperation  103, 112–​23 climate specific no harm principle  104–​10, 219 climate System  20, 22–​23, 50, 112, 128–​29, 194, 321 Chevron  200–​1, 292 coal  4, 5–​8, 12–​13, 15–​17, 19, 22, 27, 48, 81, 142, 158, 197, 223–​25, 236–​37, 238, 239–​41, 242–​43, 303 cobalt  42, 185–​86, 267 coercion  56–​57, 165–​66, 169, 210, 212 colonialism  77, 134 commons  86–​88, 90–​91, 93, 94, 96, 122–​23, 139, 223–​24, 236–​44 Copenhagen Accord  15, 111, 120, 122–​23, 236 copper  25, 42, 280–​81 Crutzen  195–​96 Crutzen method  195–​96 customary international law  72, 76–​80, 123, 125, 139–​40, 160, 177, 183 decarbonization  35, 48, 192 decolonization  76, 77–​78, 113–​14, 132, 133–​35

354 Index democracy  23–​24 Democratic Republic of Congo  185–​86 detrimental reliance  10–​11 diesel  7–​8, 271 direct air capture  14, 35, 44, 49, 51, 193–​ 94, 291–​92 direct current electricity  36–​37 distribution network  29, 36–​37 drought  38, 39, 172, 173 economic development  25–​26, 89, 106, 175, 205, 242, 287 economic zone  182–​83 ecosystem  21, 41, 46–​47, 115, 190–​91, 197, 291–​92 electricity  4, 5, 6–​7, 12–​14, 16–​17, 22, 24, 28, 29, 35, 36–​40, 41–​44, 47–​48, 64, 65–​66, 133, 136–​37, 139–​40, 149, 205, 223–​25, 234, 236–​37, 238–​39, 240, 297, 298 electric vehicles  42–​43 Energiewende  3–​5 energy access  23, 25–​26, 33, 86, 88–​89, 95, 131, 132, 135, 137–​39, 142–​43, 144–​45, 146–​47, 148–​51, 153, 154, 155–​56, 174, 198, 242–​43, 253–​54, 255–​56, 303–​4 energy efficiency  15–​16, 24, 44, 45–​46, 51, 63, 133–​34, 153 energy equity  19–​20, 22, 23–​24, 99, 131, 132–​50, 151, 153–​54, 155, 156–​57, 159, 173–​74, 175, 179, 198, 217, 219–​20, 222, 228–​29, 235–​36, 275–​76, 299 energy mix  6–​7, 8, 33, 155, 156–​57, 158–​59, 160, 172, 173, 220–​21, 242–​43 energy production  6, 8, 19, 24, 25–​26, 27, 28, 31–​32, 44–​45, 61, 65–​66, 75–​76, 118–​19, 165, 175, 176–​77, 192, 217, 224, 313, 317 energy security  19–​20, 30–​32, 33, 89, 153–​62, 163–​74, 185–​86, 196, 197, 198, 217, 220, 228–​29, 235–​36, 239, 240, 242, 254, 276–​77, 299, 303–​4, 314, 315, 316 energy shortage  31–​32, 133–​34, 139–​40 energy storage  28, 223, 225–​26, 236–​37, 241, 242–​43, 291–​92 energy systems  3, 7, 8, 11, 12, 13–​14, 15–​16, 17, 19–​20, 22, 24, 31, 32, 56–​58, 85–​89, 90–​91, 95–​96, 99, 104, 111, 113, 131, 133, 137–​39, 143, 144–​45, 148, 149, 153, 155, 158–​60, 161–​62, 163, 165, 171, 172, 173–​74, 175, 180, 182, 189, 190–​91, 192, 193–​94, 200, 201, 203, 205, 207, 210, 214–​15, 221, 223–​ 24, 226, 228, 238, 239, 241–​43, 253–​54, 262, 264, 291–​92, 303, 319, 325 energy value chains  19–​20, 24–​25, 26–​32, 36, 38–​39, 41, 44–​45, 46, 59, 64, 65–​66, 88–​89,

95–​96, 104, 112, 113, 133, 143, 144, 148, 154, 155, 157–​58, 159, 161, 163, 164–​65, 167, 168–​69, 171–​72, 175, 178, 180, 182, 190–​91, 192, 193–​94, 198, 199, 200, 201–​2, 203–​4, 205, 207, 210, 211, 214–​16, 217, 220, 235, 241–​42, 255–​56, 257, 262, 263, 267, 273, 274, 276–​77, 282, 284, 291–​92, 304, 314 environmental permitting  178, 188, 202 environmental, social  63–​66, 68–​69, 200–​1, 202–​3, 204, 206, 209, 280, 281–​82 environmental sustainability  87, 89, 92, 175–​ 85, 188–​89, 190, 191, 194, 196, 197, 198, 199, 220, 222, 228, 238, 275 Erneuerbare Ernegien Gesetz/​Renewable Energy Act (EEG) 4 Espoo Convention  179, 180 EU Law  82–​83 European Convention on Human Rights 302, 304–​5, 309 exogenous shock  91, 95–​96 export markets  25, 57, 185–​86 expropriation  167, 316, 317 feed-​in tariff 4 Fischer-​Lescano, Andreas  85–​86, 91 fission 41 food  24, 25, 44–​45, 75–​76, 135, 136, 149, 309–​11 fossil fuels  13, 15–​17, 24, 27, 30, 36, 37, 38, 39, 40, 45, 47, 48, 59, 60, 75–​76, 112, 131–​32, 156–​57, 172, 173, 190, 193–​94, 224, 241–​42 fragmentation  53, 69, 71–​72, 74, 75–​76, 78, 79, 80–​83, 85–​91, 108, 110, 271, 311 France  88–​89, 153–​54, 223–​24, 238–​39, 273–​ 74, 295–​97 fuel efficiency  14, 45–​46 Fukushima Daiichi Disaster  4–​5 gasoline/​petrol  7–​8, 29, 45–​46, 295–​96 Gates, Bill 49 GDP  24–​25, 133–​34 geo-​engineering  13, 17, 23 geopolitics  6–​7, 31, 33, 66–​67, 73–​74, 153–​ 54, 165–​66 geothermal energy  12–​13, 39–​40 Germany/​ German  3–​5, 29, 180–​81, 185–​86, 197, 223, 224–​25, 238–​41, 301–​2, 305–​ 7, 308 Ghana  131, 133, 135 Glasgow Climate Pact  9–​12, 13, 15–​17, 59, 103–​4, 108–​10, 112, 121–​23, 124, 128, 143, 146, 148–​49, 150, 173, 225–​26, 239, 284–​85, 288, 290 Glasgow Climate Pact  10–​11

Index  355 Glasgow Climate Pact  10–​11 Glasgow Climate Pact, Paragraph  32 global economy  19–​20, 24, 25, 31, 32, 61, 95, 146, 198, 242–​43 globalization  19–​20, 23–​32 Global North  113–​14, 314–​15 Global South  113–​14, 115, 125 graphite 42 Greenhouse Gas Emissions  3, 8–​10, 13–​14, 16, 17, 20–​22, 24, 32, 35, 44–​50, 51, 62, 63–​64, 65, 81, 104, 107–​9, 110, 111, 112, 118–​19, 131–​32, 193–​94, 224, 235, 236, 303, 306, 314–​15, 318–​19, 321 grid  28, 35, 36–​37, 42, 43, 63, 242–​43 growth  3, 9–​10, 11–​12, 61, 87–​88, 90–​91, 97, 133–​34, 137–​38, 139, 144–​47, 149, 150, 291

International Monetary Fund 60 International Tribunal for the Law of the Sea  318–​19 investment law  72, 75, 164, 167, 170–​71, 316 investors  66, 74, 81–​82, 150, 167, 170–​71, 317 iridium  43–​44

heating  45–​46, 149 heavy fuel oil  7–​8 high voltage lines  36–​37 human rights law  17, 71, 72, 75, 115–​16, 132, 138, 151, 187, 214, 219, 234, 253–​55, 265, 266, 270, 275–​76 hybrid approach  15–​18, 48, 51, 226 hydrological cycle  21, 50 hydrogen fuel  43–​44 hydrogen transportation  13, 35, 43–​44, 51

lithium  42–​43, 185–​86, 217, 281–​82 long distance transmission capability 37 Ludosky, Priscillia  295–​96

ICESCR: Economic, Social, and cultural Rights  3, 11–​12, 16–​17, 74, 75, 137, 141, 207–​8, 214, 290–​91, 307, 321 IEA New Zero 2050 Report  16, 48, 225 IFC Performance Standard  1, 206–​7 IFC Performance Standard  2, 204–​5 imperialism  135, 207 India  6–​7, 25, 223–​24, 238, 312–​16 India-​Solar Cell Dispute  43–​45, 316 indigenous peoples  67, 71, 72, 75, 199, 207–​16 indigenous rights  71, 72, 75, 179, 207–​ 16, 220–​21 Indonesia  6–​7 industrialization  24, 25, 26, 119, 133, 146, 307 inequality  19, 23–​24, 26, 32–​33, 56, 115, 118 inflation  31–​32, 228 Inflation Reduction Act 228 input approach  12–​13, 16, 29–​30, 35, 46, 51, 59 internal combustion engine  42–​43, 62, 65–​66 international assistance  11–​12 international cooperation  116–​17, 120, 132, 135, 144–​45, 154, 164, 181–​82 International Court of Justice  72, 105, 123, 320–​22 International Energy Agency (IEA)  13, 48, 59, 171, 225, 262

nationally determined contributions (NDCs)  10–​11, 17, 81, 111, 244, 284–​85, 288, 294–​95 National Environmental Policy Act (NEPA) 180 natural gas /​gas  4–​5, 6–​8, 12–​13, 14, 15, 16–​17, 19, 22, 27, 28, 29, 31, 47, 48, 90–​91, 142, 158, 185–​86, 190, 193–​94, 221, 223–​24, 242–​43, 311 Netherlands  239, 301–​2, 303 networks, social 3 networks  29, 36–​37 networks  68–​69 networks  54, 55, 56, 58, 63, 85, 96, 111, 235, 249, 264, 271, 294, 299 net zero  8–​12, 13, 16, 17, 47, 48, 59, 62, 110, 114, 121–​22, 128, 225, 242, 288 Neubauer  240–​41, 301, 305–​6, 308, 309 Neuchâtel Gas Fired Power Plant 6 nickel 42 nuclear power  3–​5, 7–​8, 12–​13, 35, 40–​42, 51, 142, 156–​57, 172, 173, 190–​91, 193–​94, 223–​25, 236–​37, 238–​41 nuisance  93–​94, 104–​5

Japan  185–​86, 223–​24 just transition  9, 11, 121–​22, 151, 178, 259–​60, 288–​89, 294 Katowice Protocol  103–​4 Keith, David 49 know-​how  27, 28, 29 Kwame Nkrumah 133 Kyoto Protocol  4, 9, 75, 119, 233–​34, 236

manganese 42 manufacturing  27, 29–​30, 46, 189–​90, 287, 313 market liberalization  158, 164 methane  20–​21, 22–​23 minimum labour standards  199, 203–​5, 220 Model Mining Development Agreement 201

Obama administration  233–​34

356 Index ocean  22–​23, 175, 182–​85, 195–​96, 197, 220, 229 oil  3–​8, 13, 14, 15, 19, 27, 28, 29, 31, 44–​45, 48, 60–​61, 90–​91, 98–​99, 112, 113, 185–​86, 190, 193–​94, 242–​43, 256–​57, 311, 312, 316 Ontario 62 Organization of the Petroleum Exporting Countries (OPEC)  60–​61, 171, 185–​ 86, 262 Ostrom, Elinor  55–​56 output approach  13–​16, 35, 46, 51, 156–​57 Paris Agreement  9–​11, 15–​17, 24, 75, 81, 103–​4, 108–​10, 111–​12, 120–​22, 123, 124, 127–​28, 148–​49, 150, 173, 275, 284–​85, 288, 294–​95, 297–​98, 305, 314–​15, 321 Paris Agreement 137 path dependencies 3 Pearl Street coal fired power station 5 photovoltaic cell  36–​37 phytoplankton 46–47 pipeline  4–​5, 28, 29 platinum  43–​44 pollution  50, 104, 106, 108–​9, 110, 119, 123, 177, 178, 182, 183–​84, 186, 187, 195–​96, 227, 311–​12, 318–​19 polycentric governance  53, 54–​56, 61, 64, 67, 69, 71, 82–​83, 85–​86, 90–​91, 96, 275 power plant, coal-​fired  16–​17, 22, 48, 81–​82, 142, 223–​24 power plant, gas-​fired  16–​17, 21, 48, 142 power plant, hydroelectric  38–​39 power plant, nuclear  156–​57, 172, 193–​94, 223–​ 24, 238–​39, 260, 261 precautionary principle  125–​29, 227, 239, 252–​53 private sector  53, 63–​67, 68 refining, oil  8, 19, 25, 27, 28, 29, 185–​86, 241, 261 regulation  53, 54, 61, 62–​63, 64–​65, 118–​19, 139–​40, 161, 163, 166, 167, 171, 179, 182–​85, 186–​88, 200–​1, 202, 203–​4, 208, 209, 231, 235–​36, 251, 253–​54, 256–​57, 297 renewable energy/​renewables  3–​6, 12–​13, 16–​17, 27–​28, 29–​30, 35, 36–​40, 46, 51, 63, 65, 88–​89, 106, 138, 142, 155–​57, 173, 190, 193–​94, 197, 225, 241–​43, 314, 315 right to development  8, 12, 115–​18, 121–​22, 133, 135, 137–​39, 143, 144–​45, 147, 164, 180, 205, 256, 276, 307

right to a clean environment  78–​79, 132, 197, 311 Russia  4–​5, 143–​44, 185–​86, 224–​25 sanctions, economic  163, 168–​70 sanctions, primary 168 sanctions, secondary 168 Saudi Arabia  17, 29, 190, 192 scope  1 emissions, 64, 65, 66, 67 scope  2 emissions, 64, 65 scope  3 emissions, 64, 65–​66, 67 sea level  21, 148, 244, 318–​19 sic utere tuo ut alienum non laedas 183 Simma, Bruno  11–​12 soil  46, 47, 48 solar panels  27, 185–​86, 189 solar power  4, 12–​13, 17, 20, 27, 30, 36–​37, 38, 41, 51, 90–​91, 155–​56, 194, 225, 312–​ 13, 314–​16 solar radiation management (SRM)  35, 50–​51, 194, 195, 223, 226–​28, 236–​37, 241, 243–​44 South Africa  6–​7 South China Sea  6–​7, 184 solidarity  115–​18, 121–​22, 129, 143–​44, 146, 150, 151, 153–​54, 228–​29 sovereign choice of means principle  103, 111–​ 12, 113, 132, 154, 155, 176–​77, 219, 220, 235–​36, 237, 238, 253, 255, 301 spare capacity  31, 32, 33 stakeholder engagement  206, 255–​56, 267, 273–​98 Stromeinspeisungsgesetz 4 subsidies  15–​17, 145–​46 supply chain, energy  19, 26, 32–​33, 307 supply chain, global 144 tanker 28 technology transfer  17, 113, 148–​49, 284–​85, 289–​90, 315 Teubner, Gunther 91 Thunberg, Greta 13 tipping point  22–​23, 39, 107, 227, 243, 306 traditional energy paradigm  4–​8, 12, 14, 19, 23, 30, 48, 49 transmission loss  38, 40 transportation  3, 5, 7–​8, 13, 14, 19, 22, 24–​26, 27, 28, 30, 31–​32, 35, 42–​44, 51, 63, 65–​66, 67, 190, 235, 313 trees  35, 46–​47, 48 trilemma  86–​93, 95, 99, 175 turbine, hydroelectric 39

Index  357 turbine, wind  37, 38 Trump administration  81, 231, 233–​34, 297–​98

Urgenda  239–​40, 301–​6, 308–​9, 323 utility scale  36–​37, 88–​89, 90–​91

unabated coal  15–​16 unilateral acts  80–​82, 233–​34 United Nations Convention on the Law of the Sea  72, 75, 318–​20 United Nations Framework Convention on Climate Change (UNFCCC)  4, 9, 15, 58, 75, 107, 118–​19, 121, 123–​24, 127–​28, 275 United Nations General Assembly  78–​79, 113, 309–​10, 320 United States  6–​7, 13, 17, 23–​25, 41, 42, 43, 81, 104–​5, 119, 139, 158, 169–​70, 180–​81, 188, 228, 233–​34, 257–​58, 273–​74, 297–​ 98, 314–​15 uranium  40, 41, 224

Vietnam  6–​7 waste  91–​93, 96–​99, 133, 138–​39, 146–​47, 151, 160, 165, 174, 188, 198, 237, 241 wind power  4, 12–​13, 27, 30, 36, 37–​38, 51, 155–​56, 225 Winston Churchill  7–​8 World Bank 60 world society  3, 9, 19, 95, 119, 121–​22, 131, 135, 146–​47, 196, 249, 253, 291–​92, 294, 325 World Trade Organization (WTO)  74, 75, 158, 164–​65, 170, 314 yellow vest protests  88–​89, 273–​74, 295–​96