Pursuit of Climate Change Mitigation under International Investment Law: Republic of Korea as a Global Test Bed

Abstract

Republic of Korea is taking a leading role in mitigating climate change and the Paris Agreement will definitely boost its efforts as it enters into force sooner or later. This Agreement obliges its Parties to pursue domestic mitigation measures with the aim of achieving the objectives of their Nationally Determined Contributions (NDCs) setting forth greenhouse gas (GHG) emissions reduction goals, and such measures may involve highly regulatory measures affecting investments owned by foreign investors as a consequence. Unfortunately, however, most of the existing international investment agreements (IIAs) between national governments protecting such investments and investors have been evolved without taking climate change concerns into account seriously. Accordingly, Korea’s major climate change policies may trigger foreign investors to initiate or at least threaten to initiate investor-State dispute settlement (ISDS) procedures and bring investor-State disputes against the Korean government in response. In this context, this thesis reviews the legal framework of Korea’s major climate change policies and analyzes the previous jurisprudence of international arbitration tribunals concerning environmental measures of host States. This thesis also proposes the Korean government and other host States to incorporate climate change-savvy preamble and operative clauses as well as general exception clauses in the future IIAs. By doing so, host States will be able to integrate their climate change policies with the international investment regime and minimize a risk of triggering investor-State disputes against them under a new climate change regime.