Five Years After the Adoption of the Paris Agreement, Are Climate Change Considerations Reflected in Mining Contracts?

Abstract

Domestic laws are the ideal legal instrument to regulate the mining sector’s contribution to climate change mitigation and adaptation. Even so, as a stop-gap-measure, governments may consider updating model mining development agreements (MMDAs) or negotiating climate­-related contractual provisions. This CCSI paper explores whether governments are using, and how they can use, investor–state mining contracts to advance climate goals. We synthesize our findings and recommendations for six categories of provisions: integrating renewable energy into mining products, reducing deforestation, requiring a climate risk assessment and community vulnerability assessment, regulating water use, requiring tailings dam design justifications, and integrating climate risks into closure plans.

Keywords: Mining Sector, Climate Change, Renewable Energy, Deforestation, Climate Risk Assessments, Tailings Dams, Closure Plans, Investor–State Mining Contracts, Model Mining Development Agreements (MMDAs)

JEL Classification: Q01, Q32, Q38, Q42, Q48, Q52, Q54, Q56, Q58, J41, K12, K23, K32, L52, L71, L72, L73, L78