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ClientEarth Communications

18th November 2016

Rule of law
Climate accountability
Clean energy

CETA’s environment promises are little more than hot air – new analysis

Toothless, unenforceable environment rules and a tribunal system which will prioritise corporate interests undermine claims that the EU-Canada trade agreement is a ‘gold standard’ of trade deals to benefit people and the planet.

A new report by Transport & Environment (T&E) and ClientEarth shows CETA’s environment chapter does nothing to encourage climate mitigation.

The Paris Agreement, signed by both Canada and the EU, explicitly calls for climate measures like transitioning to renewable energy. Therefore, CETA should support the same action.

ClientEarth lawyer Laurens Ankersmit said: “CETA is not a progressive deal. For the first time in EU-Canada relations, the whole of Europe will be exposed to claims by Canadian investors before investment tribunals.

"A few weak provisions on environmental commitments cannot mask that this agreement will serve business, not the planet.”

The analysis also finds there are no enforcement mechanisms that can bind the EU and Canada to uphold the already weak environment provisions in the CETA agreement, which requires approval by the European Parliament, national parliaments, and a final vote in EU Council before fully entering into force.

The deal’s regulatory cooperation section focuses on regulations having an effect on trade and not improving social and environmental policy, while such cooperation between Canada’s government and the EU is also subject to a courts system that is biased towards corporations.

Cecile Toubeau, Transport & Environment director of better trade and regulation, said: “MEPs and national parliaments must demand more from a trade deal that was negotiated in secret. To even think about calling CETA a gold standard, we need to see an environment chapter that can be enforced with sanctions.”

CETA’s special investment tribunals, the so-called International Court System, will only hear cases brought by corporations, not by citizens or their governments. This means companies can bypass national courts to pursue a financial payout from states.

The analysis also finds such cases could threaten measures taken in the public interest, such as national policies favouring the development of renewable energy or laws to ensure the decarbonisation of transport fuel.

CETA’s domestic regulation chapter does not sufficiently take environmental considerations into account when issuing environmental licenses, such as whether to approve coal-fired electricity plants.

The agreement also fails to reflect Canada and Europe’s commitments to the Paris climate agreement. For example, it misses the opportunity to foster a transition to a sustainable, green economy by decarbonising both the energy and transport sectors. Tariff reduction should also have been differentiated according to environmental characteristics, such as phasing out tariffs on electric car engines now rather than after five years.

On Wednesday 23 November, MEPs will vote on whether to refer controversial investment rules in CETA to the European Court of Justice.