Regulatory Takings and Environmental Regulation in NAFTA's Chapter 11

Emma Aisbett, Larry Karp and Carol McAusland ()

No 7195, CUDARE Working Papers from University of California, Berkeley, Department of Agricultural and Resource Economics

Abstract: NAFTA's investment treaty has led to several expropriation compensation claims from investors hurt by new environmental regulations. Expropriation clauses in international treaties solve post-investment moral hazard problems such as hold-ups. However, these clauses can interact with National Treatment clauses in a manner that hinders investment. A police powers carve-out from the definition of expropriation can be Pareto-improving and can increase the level of foreign investment.

Keywords: Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 36
Date: 2006
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Citations: View citations in EconPapers (1)

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Working Paper: Regulatory Takings and Environmental Regulation in NAFTA's Chapter 11 (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucbecw:7195

DOI: 10.22004/ag.econ.7195

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