Abstract
Climate change is widely regarded as the greatest threat facing the world today. If emissions are not urgently reduced, the world will suffer significant and irreversible changes. To achieve the Paris Agreement goal of limiting warming to 2°C, 2 fundamental changes are required. Among these is a major shift in international finance flows. In particular, a two-part process is necessary. Carbon-intensive investments must be phased out and low-carbon investments take their place.
This paper examines how international investment law (IIL) may impact these twin processes. Specifically, it asks if ILL can support the twin goals of phasing-out carbon-intensive investments while incentivising future low-carbon alternatives. Divesting carbon-intensive investments appears to require state centric IIL, while incentivising low-carbon investments demands high levels of investor protection.