1. Foreign Investment Law and the UNFCCC/Kyoto Protocol: Barriers to Addressing Climate Change British Institute of International and Comparative Law Annual Conference, October 2008 Kate Miles

2. Investment and Climate Change: Modes of Interaction  Opportunities for investors Markets in renewable energy sector; Flexible mechanisms under Kyoto Protocol; Innovation in eco-efficient technology.  More stringent restrictions on carbon-emitting activities

3. Regulatory Changes in a Low Carbon Economy  Energy efficiency standards;  Prohibitions on the use of products and activities;  Withdrawal of rights to emit at current levels;  Emission trading schemes;  Requirements to obtain electricity from renewable sources;  New regulation to support Clean Development Mechanism (CDM) projects;  Incentives to invest in renewable energy;  Changes to tax, exemptions and subsidies.

4. Environmental Regulation as Treaty Violation  Indirect expropriation;  Discriminatory treatment;  Fair and equitable treatment Azurix Tecmed

5. Investor-State Disputes  Azurix Looked to the Tecmed award for guidance; Tecmed – an expansive interpretation; Tribunals cannot agree on effects/purpose;  Tecmed no principle stating that regulatory administrative actions are per se excluded from the scope of the treaty, even if they are beneficial to society as a whole – such as environmental protection …

6. Fair and Equitable Treatment  Legitimate expectations of the investor;  Stable legal and business environment;  Tecmed Not affect the basic expectations in entering the investment; Consistency; Free from ambiguity; Transparency; Know all regulations that will govern the investment for the life of the investment.  Endorsed by Azurix.

7. Climate Change  Claims of discriminatory treatment;  Arcelor and the European Emissions Trading Scheme; Discrimination as between sectors; Political constraints in EU – not applicable in ad hoc system of investor-state arbitration.

8. Potential for Claims re Climate Change Mitigation Measures  Follow Tecmed and Azurix? Effects of regulation; Expectations of the investor; Stable legal and business environment; Stabilisation clauses; Claims of discrimination; Measures favourable to CDM projects; ‘Like circumstances’  Parkerings Award

9. Conclusions  Ways forward?  Win-win situation? Carve-outs for public welfare regulation; Re-framing of fair and equitable treatment standard; Ecological impacts in criteria for ‘like circumstances’; Energy from renewables not ‘like’ energy from carbon- intensive sources; Balance competing interests in investor-state arbitration; Host states to signal with transparency and advance notice the regulatory changes to be made in the move to a low carbon economy.