International Investment Law and Climate Change: reframing the ISDS reform agenda

Ongoing investment law reform processes take the investment treaty system as the starting point. While this can generate actionable reform options, it also entrenches ‘path dependency’ and forecloses space for more foundational questions. This article argues that, in the context of climate change, effective reform requires re-embedding debates within a policy space that places climate at its centre.

The argument entails recognising: (i) climate change as a comprehensive ecological, economic and social challenge; (ii) the preferential nature of the protections investment treaties establish for foreign investment; and (iii) the structural misalignments that exist between this legal regime and climate action. It also involves interrogating the normative considerations invoked to justify investment protection treaties.

The findings highlight the need to reorient collective reflection towards designing reforms that – rather than address narrowly defined concerns within the current system – develop a new system that can respond to 21st century challenges.