International Investment Law and Renewable Energy: Enabling National Policy-Making?

Abstract

The interaction between international investment law and national policies on green energy has already received some attention as part of a broader debate about investment treaty instruments and sustainable development. However, unlike the related issue of WTO law and its role in facilitating (or constraining) greener solutions and policies, some of the more specific aspects of the relationship between international investment agreements and the promotion of renewable energy on a national level remain less explored. This paper will draw upon existing scholarship on international investment law and sustainable development as a background for a fresh inquiry into barriers and opportunities the emerging global investment protection regime creates in the way of renewable energy initiatives. Potential clashes between international investment law and national policy-making in the renewable energy sector will be analyzed through the prism of concrete regulatory solutions that have been deployed by national governments, including biofuel certification programmes, green subsidies, and carbon tax schemes. Drawing upon a comparative analysis of international trade and EU law, the paper will also explore the role of (and problems with) carve-out provisions and exceptions clauses as a means of providing national governments with policy space for promoting renewable energy. It will examine the concept of energy security as one of the catalysts behind the move towards renewable energy and a ground on which national measures can be insulated from investment treaty disciplines. Driven by discrete but often interrelated and competing objectives — such as climate change mitigation, sustainable development, environment protection, and energy security — national renewable energy initiatives and the issue of their consistency with international investment law offer a unique analytical angle from which some of the fundamental and systemic issues stemming the evolution of a global investment protection regime will be explored.