Radical Reform of the International Investment Treaty Regime: A Role for Climate Clubs?

ABSTRACT There is growing concern that provisions in international investment treaties are being used to delay the critically needed transition away from fossil fuels. Although various procedural and substantive reforms have been pursued in recent years, these reforms have thus far failed to tackle the fundamental problems with investment treaties and the investor‐state dispute settlement (ISDS) system associated with them. By way of an alternative approach, this article assesses the potential for “climate clubs” to act as a forum for the development of initiatives that range from providing a waiver agreement for ISDS related to fossil fuel assets, to a general ISDS waiver agreement, to a mutual agreement to terminate investment treaties. These initiatives could be implemented in an existing climate club, or a new club could be formed for this purpose.