The International Investment Regime and Climate Change Goals: Clash of the Existing Systems and Available Balancing Tools

International commitments of states require them to adopt regulatory measures aimed at reducing CO2 emissions to combat climate change. This is likely to trigger a wave of investor-state claims by affected foreign investors, mostly from the fossil fuel industry. As no precedent currently exists, this article seeks to analyse how investment tribunals might approach such claims and balance substantive protections under international investment agreements with host states’ obligations under the international climate change regime. After a brief overview of international climate change law, the article considers whether investor-state dispute settlement may serve as an enforcement mechanism for states’ international climate change commitments, or rather investors’ claims cause a regulatory chill. The article further analyses how international climate change law might be applied in investment treaty disputes and concludes that it is likely to be invoked to interpret standards of investment protection. Finally, the view is adopted that the police powers doctrine defence and invocation of general public policy exceptions, contained in new generation investment treaties, might excuse host states from compensation for regulatory measures adopted in furtherance of climate goals.