International Investment Law and Climate Change: Issues in the Transition to a Low Carbon World

Abstract:     
International investment and climate change intersect in a number of ways. There is immense potential for investment in carbon markets, renewable energy sources, and low carbon technology. There is also, however, the potential for international investment law to frustrate the implementation of climate change mitigation measures. This paper examines recent investor challenges to environmental regulation and argues that a similar approach to climate change-related regulation can be expected. The interaction of these international legal regimes will have significant implications for achieving global carbon emissions reductions, and, as such, this paper argues for a better alignment of their objectives. It points to the need for a shift in international investment law to meet global environmental challenges of the 21st century and argues for the inclusion of provisions in international investment agreements that will assist with the transition to a low carbon economy.

Keywords: International investment law, Climate change, Low Carbon, Renewable energy, Climate change, Mitigation, Environment, Environmental regulation, Carbon emission reduction, Global environment, Low carbon economy

JEL Classifications: F20, F21, F02,F10,F13, F14, F15, K32

Working Paper Series