Greening Investor-State Dispute Settlement

Abstract

Climate change poses serious threats to human society. Climate change is already affecting our environment and thus, many aspects of human and economic activity. Among the challenges ahead, governments will need to more actively adopt regulatory policies given the international obligations in this area, such as the Paris Agreement, as well as promote green private investment as a means toward unlocking sustainable growth. How can international investment law be adapted and modernized to respond to these challenges? In this Essay, we summarize a comprehensive set of innovations that could be included in International Investment Agreements to address international obligations regarding climate change. Our discussion, based on a Green Treaty Model, first stresses the role of balanced obligations for investors and host countries, and then focuses on dispute settlement. We conclude by explaining how the current process of reform under the auspices of the United Nations Commission on International Trade Law can be used for a more ambitious transformation of international investment; a transformation in which investment treaties can act as catalysts for green foreign direct investment necessary to reverse the momentum for climate change already built into the atmosphere.