The Nexus between the WTO and the Energy Charter treaty in Global Energy Governance: Analysis and policy implications

Sustainable energy policy is one of the biggest challenges the world faces today. The necessity of mitigating climate change and shifting to cleaner energy sources points to the need for a far more coherent approach to today’s fragmented global energy governance. This approach has to take into account the linkages between the different pillars of energy governance, including climate change mitigation and energy trade and investment.

This issue paper explores the nexus between the World Trade Organization (WTO) and the Energy Charter Treaty (ECT) in light of this need, since the two treaty-based systems cover an important area of the energy governance patchwork. It examines how the relationship between these institutions has evolved from their establishment roughly twenty years ago. Both treaties intersect and overlap in several places. Moreover, vast changes in membership of both treaties have far-reaching implications for the place of the energy debate in the WTO and the relevance of the trade rules of the ECT. The future of the ECT trade provisions, once all WTO Observers who are simultaneously Parties to the ECT accede to the WTO, is especially unclear. The goal of this paper is to scrutinise the origins of the resulting overlap between these two treaty regimes and to determine their future place in an integrated system of energy governance that contributes to sustainable development and climate change mitigation.