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Investment treaty reform when regulatory chill causes global warming
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1028-3625
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EUI; RSC; Working Paper; 2023/12; Global Governance Programme-496
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HORN, Henrik, Investment treaty reform when regulatory chill causes global warming, EUI, RSC, Working Paper, 2023/12, Global Governance Programme-496 - https://hdl.handle.net/1814/75358
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.