In essence, treaty-based investment protection measures give corporations the right and a forum to challenge governmental decisions and sue for redress. What often occurs,especially in the Global South,is that governments do not have the resources to defeat corporations at theWorld Trade Organization(WTO), regional courts, or arbitration tribunals.

With global warming worsening and the energy transition accelerating, ISDS is also associated with the term regulatory chill. According to Kyla Tienhaara: “It is hypothesized that fossil fuel corporations will emulate a tactic employed by the tobacco industry – that of using ISDS to induce cross-border regulatory chill: the delay in policy uptake in jurisdictions outside the jurisdiction in which the ISDS claim is brought. Importantly, fossil fuel corporations do not have to win any ISDS cases for this strategy to be effective; they only have to be willing to launch them.”

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