Investment Arbitration Risks And Responses To Host Countries’ Carbon Neutrality Measures

Climate change is an increasingly serious global challenge shared by all humankind,and its impacts are widespread and profound,and could even be devastating to human survival and development.In its Sixth Assessment Synthesis Report,Climate Change 2023,the United Nations Intergovernmental Panel on Climate Change noted that adverse climate change is already more profound and extreme than expected.The urgency of taking action to address climate change has become a global consensus,especially under the impetus of the international climate change agreements represented by the Paris Agreement,where countries have proposed carbon neutrality targets and defined the time course for achieving carbon neutrality,and thus adopted a series of carbon neutrality measures to achieve their national autonomous contribution emission reduction commitments under the Paris Agreement.It is important to acknowledge that ⅡAs play a "double-edged sword" role in achieving carbon neutrality.On the one hand,ⅡAs can accelerate the "decarbonization" of major industrial sectors in international investment by encouraging climate-friendly investment to achieve emissions reductions and "net zero",but this positive effect is currently not fully exploited;on the other hand,as On the other hand,since existing international investment agreements generally focus on investment protection and the scales of investment arbitration tend to tip in favour of investors,many sustainable development values,including carbon neutrality,are not fully respected and taken into account,resulting in a series of negative effects.Driven by the need to achieve carbon neutrality in order to combat climate change,the carbon neutral measures adopted by host countries may easily touch the bottom line of the national treatment clause,the most favoured nation clause,the fair and equitable treatment clause and other substantive provisions in investment agreements,thus creating a conflict between carbon neutral measures and investment protection,which may lead to damage to the interests of investors and lead to investment disputes.The lack of carbon neutral provisions in IIAs and the disregard of the value of carbon neutrality by investment tribunals may cause the host country to lose in investment arbitration and bear a huge liability for this,which may fundamentally discourage the host country from adopting more thorough carbon neutral measures and further undermine the promotion of global emission reduction actions,the harm of which is self-evident to the host country and the world.The aim of this paper is to propose a corresponding response path for host countries from the perspective of the IIA framework.First of all,it is necessary to clarify the value orientation,i.e.to highlight the priority effect of the carbon neutrality target under the Paris Agreement,abolish the "investment neutrality" attitude,reaffirm the climate change agreement to which both parties are parties,fully respect the right of the host country to adopt reasonable carbon neutral measures,and leave sufficient policy space and compliance facilities for the host country,so as to Secondly,we should make a transition from the outside to bridge the "carbon neutrality gap" under the existing dual treaty system to the greatest extent possible,and achieve synergy between investment agreements and climate change agreements by improving investment contracts and making full use of the rules of interpretation,etc.;finally,we should reform from the inside and seize the opportunity of upgrading the current framework of investment agreements.Finally,we should make internal reforms,seize the opportunity of upgrading the current framework of investment agreements,reform the substantive rules and dispute settlement mechanism of investment agreements,add carbon neutral provisions represented by exception clauses,and explore diversified dispute settlement mechanisms for climate change-related investments,so as to truly internalize many sustainable development values,including carbon neutrality,into the framework of investment agreements and achieve innovation and upgrading of the new generation of investment agreements.As an important force in achieving global carbon neutrality.China has always made great contributions to global emission reduction and "net zero" actions.In the context of international investment,China,as a host country,should strengthen carbon neutral legislation,improve the disclosure and guidance of carbon neutral measures;as a home country of investors,China should accelerate the rational layout and As the home country of investors.China should accelerate the rational layout and optimization and upgrading of all kinds of outward investment industries,and take reasonable regulatory measures to guide investors to "decarbonize";while Chinese investors should actively assume the role of enterprises in the process of "going global" such as "One Belt,One Road" and Regional Comprehensive Economic Partnership.In the process of "going global" such as "One Belt,One Road" and Regional Comprehensive Economic Partnership.Chinese investors should actively undertake corporate social responsibility,fully comply with the carbon neutral laws of the host country,and implement the concept of carbon neutrality to avoid various possible legal risks.By anticipating and reasonably responding to various possible risks in advance to reduce the occurrence of investment disputes.China can ensure the orderly progress of the carbon neutral process,continue to contribute to global emission reduction,and continuously enhance its voice and appeal on the global carbon neutral issues.