Assessing pathways for pursuing coherence between local implementation of emerging alternative economic approaches and international investment law

Abstract

International investment law has potential unintended consequences on emerging local experiments in economic governance aiming to decouple economic growth from the use of natural resources and environmental degradation. While local regulatory measures may appear detached from international legal obligations, conduct of territorial governmental entities can be attributed to States on the same basis as central governments. Consequently, local measures which stray from 20th century economic paradigms and negatively impact projects protected under an operative international investment agreement may lead to international legal responsibility. This article seeks to answer the question of whether international investment law creates barriers to local implementation of alternative economic approaches. It finds that such barriers exist and explores avenues for overcoming such obstacles in the near-term. The article also finds that local actors must pay attention to multi-layered considerations beyond the local context as regulatory measures implementing postgrowth or degrowth approaches are not isolated from other levels of governance. It also highlights pathways for ensuring local regulatory autonomy. It concludes that while conflict between international investment law and local alternative economic approaches will persist in the near future, immediately available albeit imperfect pathways to mitigate the risk of international responsibility for local regulatory measures are available.