International investment treaties are at odds with the global energy transition by protecting up to 2Gt of potential greenhouse gas emissions every year or more than 10% of all global fossil-fuel assets, according to new research.

London-based climate think tank E3G found that provisions in more than 2,000 treaties are hampering international efforts to achieve net-zero emissions as they protect fossil fuel investments abroad.

The terms – known as investor-state dispute settlement (ISDS) provisions – allow foreign investors to bring claims against host governments in international arbitration tribunals if their business interests are undermined by government measures.

“ISDS risks delaying the global energy transition by raising the costs of climate action, reducing the fiscal space to respond to climate change and encouraging further investments in fossil fuels,” E3G said in its latest report.

G7 countries particularly protective

Half of those potential emissions are protected by G7 countries, and the UK protects more emissions than any other country, E3G found.

G7 leaders have committed to achieving net zero no later than 2050, and the UK was the first of the group to sign its net-zero ambitions into law in 2019.

Several of the most protective countries are members of the Clean Energy Transition Partnership, which was launched at the UK-hosted COP26 gathering as a way to scale up the deployment of, and public support for, clean energy.

Middle- and low-income countries are vulnerable to more than half of potential ISDS claims that could get in the way of transition efforts, E3G’s research found, with Egypt and Nigeria most at risk.

The UN environment programme’s latest figures put global greenhouse gas emissions at 57.4Gt of CO2 equivalent in 2022, up 1.2% on the year.