CYIL vol. 13 (2022)

CYIL 13 ȍ2022Ȏ INTEGRATING CLIMATE CHANGE ELEMENTS INTO INTERNATIONAL INVESTMENT… notion of investment and its potential reconceptualization towards sustainable investment in the context of climate change. This topic still remains under-explored. 8 The article will examine how international investment agreements can play a helpful role in promoting ‘green investment’ through the redefinition of the term investment. It will first point out the importance and challenges of aligning international investment treaties with international climate change regime. The next sections will explore the definition of ‘green’ investment and the potential inspiration by the classification of ‘environmentally sustainable activities’ provided in the EU green taxonomy. It will then consider links between foreign investment and the concept of sustainable development. The Conclusion will provide an overall assessment of the feasibility of adopting a common definition of green investment and its potential for attracting investment that is in line with host State’s climate and sustainable goals. Alignment of International Investment Treaties with the Paris Agreement Objectives An alignment of international investment treaties (IIAs) with the Paris Agreement remains unclear. The IPPC 6th Assessment Report published in April 2022 concluded that international investment agreements, including those in the energy sector, impede national mitigation efforts. 9 In a similar vein, several EU Member States and some academics have criticised the Energy Charter Treaty (ECT) in the context of efforts to modernise it. 10 They have expressed concerns that this particular international investment agreement, focused on energy sector, hinders governments from decarbonizing their economies and achieving the Paris Agreement goals by providing protection to the fossil fuel industry. 11 For example, in June 2022, Spain publicly demanded the European Commission to initiate a coordinated withdrawal of the EU and its Member States from the Energy Charter Treaty. 12 Likewise, the European Parliament voted in favour of considering an exit from the ECT and negotiating an agreement 8 See e.g., Enhanced market access and investment facilitation provided only for genuinely green investment has been proposed by the Cambridge Research Group on Foreign Investment and the Environment. The academics suggest that international investment agreements are able to support investment in the low-carbon transition if they provide an access to green investment only and at the same time secure more regulatory space for the States to adopt green transformation policies without entailing international responsibility. Cambridge Research Group on Foreign Investment and the Environment, OECD Public Consultation on Investment Treaties and Climate Change – Response paper [online]. March 2022, [cit. 1 September 2022], pp. 42–43. Accessible at: https://www.oecd.org/investment/investment-policy/OECD-investment-treaties-climate-change-consultation responses.pdf. 9 AR6, Mitigation, TS-120. 10 Energy Charter Treaty and the Energy Charter Protocol on Energy Efficiency and Related Environmental Aspects were developed after the end of the Cold War with the aim of integrating the former Eastern Block countries into western energy market. It was signed in 1994 and entered into force in 1998. The EU and all EU Member States are contractual parties; the Czech Republic as of 16 April 1998 (notification no. 372/1999 Sb.). The ECT has generated the highest number of investor–state arbitrations that were conducted under international investment agreements. 11 Letter from climate scientists to EU leaders on the IPCC climate mitigation report findings related to climate change, undated, [online]. [cit. 1 September 2022]. Accessible at: https://endfossilprotection.org/sites/default/ files/2022-06/2022-06-21 Letter from climate scientists to EU leaders.pdf. 12 See e.g., MATHIESEN, K. Spain demands EU leave energy treaty over climate concerns. Politico , 21 June 2022, [online]. [cit. 1 September 2022]. Accessible at: https://www.politico.eu/article/spain-demands-eu-leave-energy treaty-over-climate-concerns/.

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