CYIL vol. 13 (2022)

MONIKA FEIGERLOVÁ CYIL 13 ȍ2022Ȏ 6 th Assessment Report, by 2020, there were ‘direct’ climate laws focused primarily on GHG reductions in 56 countries covering 53% of global emissions. 2 Policy interventions, including climate motivated measures, raise questions under international investment law, respectively in relation to commitments that States undertook under international agreements to protect foreign investment. Coal phase-out measures are the most visible example of recent regulations, the effects of which have already been the subject of investment lawsuits. 3 The IPCC report on Climate Change Mitigation has also identified that progress on the alignment of financial flows towards the goals of the Paris Agreement remains slow. 4 Delayed climate investments and financing will result in significant carbon lock-ins, stranded assets, and other additional costs. 5 Credible signalling by governments on climate policy goals is vital for guiding investment decisions and reducing uncertainty and transition risk. According to the IPCC findings, public and private finance flows for fossil fuels are still greater than those for climate adaptation and mitigation. 6 Attracting desirable investment is an area where the international regime on the protection of foreign investment could play a positive role. Foreign direct investment (FDI) is generally recognized as an important source of capital and of transfer of technology and know-how between countries. FDI’s contribution to green economy is little known also given the lack of an internationally agreed definition of green investment. 7 The stated objective of international investment treaties is to stimulate flows of private capital into the economies of the contracting parties. The definition of the covered investment can be, thus, instrumental for attracting the desired investment. Limiting the definition of investment to green investments can be one of the avenues of how future investment treaties could possibly support governments to facilitate decarbonisation and climate-resilient investment. Numerous reforms of the investment treaty regime are underway or have been proposed. This contribution will mention such initiates only briefly, while the main focus will be on the 2 °C, preferably to 1.5 °C, compared to pre-industrial levels. The countries aim to reach global peaking of GHG emissions as soon as possible so as to achieve a GHG balance in the second half of this century. 2 IPCC, 2022: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press, Cambridge, UK and New York, NY, USA (‘AR6, Mitigation’), SPM-14. 3 The well-known cases include German energy companies RWE and Uniper that have requested the Netherlands to pay a compensation for the Dutch government’s decision to phase out coal. Uniper SE, Uniper Benelux Holding B.V. and Uniper Benelux N.V. v. Kingdom of the Netherlands (ICSID Case No. ARB/21/22), proceedings commenced on 30 April 2021; and RWE AG and RWE Eemshaven Holding II BV v. Kingdom of the Netherlands (ICSID Case No. ARB/21/4), proceedings commenced on 2 February 2021. See also PUTTER, Stan. The Netherlands Coal Phase-Out and the Resulting (RWE and Uniper) ICSID Arbitrations. Kluwer Arbitration Blog [online]. 24 August 2021, [cit. 1 September 2022]. Accessible at: http://arbitrationblog.kluwerarbitration. com/2021/08/24/the-netherlands-coal-phase-out-and-the-resulting-rwe-and-uniper-icsid-arbitrations/.

4 AR6, Mitigation, SPM-15. 5 AR6, Mitigation, TS-125. 6 AR6, Mitigation, SPM-15.

7 INDERST, G., KAMINKER, Ch., STEWARD, F. Defining and Measuring Green Investments: Implications for Institutional Investors’ Asset Allocations. OECD Working Papers on Finance, Insurance and Private Pensions , 2012, No. 24, OECD Publishing, p. 11.

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