Presentation on theme: "Foreign Investment Law and the UNFCCC/Kyoto Protocol: Barriers to Addressing Climate Change British Institute of International and Comparative Law Annual."— Presentation transcript:
Foreign Investment Law and the UNFCCC/Kyoto Protocol: Barriers to Addressing Climate Change British Institute of International and Comparative Law Annual Conference, October 2008 Kate Miles
Investment and Climate Change: Modes of Interaction Opportunities for investors Markets in renewable energy sector; Flexible mechanisms under Kyoto Protocol; Innovation in eco-efficient technology. More stringent restrictions on carbon-emitting activities
Regulatory Changes in a Low Carbon Economy Energy efficiency standards; Prohibitions on the use of products and activities; Withdrawal of rights to emit at current levels; Emission trading schemes; Requirements to obtain electricity from renewable sources; New regulation to support Clean Development Mechanism (CDM) projects; Incentives to invest in renewable energy; Changes to tax, exemptions and subsidies.
Environmental Regulation as Treaty Violation Indirect expropriation; Discriminatory treatment; Fair and equitable treatment Azurix Tecmed
Investor-State Disputes Azurix Looked to the Tecmed award for guidance; Tecmed – an expansive interpretation; Tribunals cannot agree on effects/purpose; Tecmed no principle stating that regulatory administrative actions are per se excluded from the scope of the treaty, even if they are beneficial to society as a whole – such as environmental protection …
Fair and Equitable Treatment Legitimate expectations of the investor; Stable legal and business environment; Tecmed Not affect the basic expectations in entering the investment; Consistency; Free from ambiguity; Transparency; Know all regulations that will govern the investment for the life of the investment. Endorsed by Azurix.
Climate Change Claims of discriminatory treatment; Arcelor and the European Emissions Trading Scheme; Discrimination as between sectors; Political constraints in EU – not applicable in ad hoc system of investor-state arbitration.
Potential for Claims re Climate Change Mitigation Measures Follow Tecmed and Azurix? Effects of regulation; Expectations of the investor; Stable legal and business environment; Stabilisation clauses; Claims of discrimination; Measures favourable to CDM projects; ‘Like circumstances’ Parkerings Award
Conclusions Ways forward? Win-win situation? Carve-outs for public welfare regulation; Re-framing of fair and equitable treatment standard; Ecological impacts in criteria for ‘like circumstances’; Energy from renewables not ‘like’ energy from carbon- intensive sources; Balance competing interests in investor-state arbitration; Host states to signal with transparency and advance notice the regulatory changes to be made in the move to a low carbon economy.