An ISDS Carve-Out to Support Action on Climate Change

Abstract

How should a multilateral agreement on climate change include a safeguard against risks of investor-state dispute resolution (ISDS) lawsuits targeting climate change action by governments? The aim of this short report is to identify language for an ISDS carve-out that is reliable and clear considering the importance of climate change action and the financial uncertainties and potential deterrent presented by ISDS for states considering such action.

Keywords: Climate change, multilateral negotiations, investor-state arbitration

JEL Classification: K10