Investment Treaty Reform when Regulatory Chill Causes Global Warming

Henrik Horn

No 2023/12, RSCAS Working Papers from European University Institute

Abstract: State-to-state investment protection treaties, and the Energy Charter Treaty in particular, are alleged to dissuade host countries from regulating foreign-owned investment with adverse climate impact. This paper examines implications of treaty reforms that have been proposed as remedies for such regulatory chill. It finds that an increased carve-out, and reduced compensation in case of regulation, can address the stranded investment problem, but might not be accepted by both parties to the agreement. Disallowing investor-state dispute settlement (ISDS) solves the chill less effectively, but is more acceptable to both parties. Shortening of a sunset period applicable to unilateral withdrawal will tend to worsen the problem

Keywords: Financial; support; from; Torsten; Söderberg; Foundation; is; gratefully; acknowledged (search for similar items in EconPapers)
Date: 2023-02
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Working Paper: Investment Treaty Reform when Regulatory Chill Causes Global Warming (2024)
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