Balancing Sustainability, the Right to Regulate, and the Need for Investor Protection: Lessons from the Trade Regime
31 Pages Posted: 19 Nov 2018 Last revised: 28 Nov 2018
Date Written: November 17, 2018
Recent initiatives for investment reform demonstrated by the 2016 United Nations Conference on Trade and Development and 2018 World Investment Reports have raised key issues for sustainable development in the context of investment in natural resources and energy. Where there has been increasing convergence between trade and environmental norms as trade regimes confront domestic regulatory measures for environmental protection and climate change mitigation, similarly investment regimes also have had to address such domestic measures but with little progress towards normative convergence. At the same time, there’s an increasing skepticism for the traditional models of globalization of the 1990s and more recognition of the need for economic models that foster sustainability and local stability. This Article will analyze four primary areas in which investment law intersects with environmental and climate change policies. Drawing from lessons learned in the trade context, it will examine the following areas in which investment law will need to better address domestic policies: (1) regulation, especially those in the form of direct and indirect taxes; (2) subsidies; (3) labeling schemes; and (4) local content requirements. These will be discussed against the backdrop of today’s changing landscape regarding popular attitudes towards globalization and the right to regulate. The Article will conclude with a discussion of the challenges ahead for investment in natural resources and energy, especially in Latin America where some governments are changing the constitutional framework in which nature should be managed.
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