Natural resource contracts and net zero

The chapter argues that the regulatory regime in general, and natural resources contracts in particular, require a radical shift to be aligned with net zero objectives. With increasing demand for transition minerals, contractual clauses and provisions, such as stabilization and dispute resolution clauses in preexisting long-term resource contracts, may constrain or even freeze states’ sovereign rights and abilities to advance net zero. On the other hand, failure to address new and emerging environment, social, and governance risks associated with the rush for transition minerals may result in complex disputes and conflicts. There is an urgent need to move towards more net zero and climate-aligned natural resource contracts that accommodate new realities. Legal and institutional barriers facing resource-rich countries in adapting existing contract forms to accommodate new realities in a net zero era are examined, while the need for increased international solidarity, through capacity development, is highlighted.