Climate-Related Investment Arbitration: Tribunals’ Approaches to the Rollback of Renewable Energy Incentives

Summary

This article analyses how investment tribunals have dealt with claims arising from the withdrawal or reduction of State support for renewable energy, focusing on the fair and equitable treatment standard. It identifies three approaches to the question whether a general regulatory framework can generate legitimate expectations of stability: a restrictive approach, which declines to treat general legislation as a specific commitment; an intermediate approach, which tolerates regulatory change within an acceptable margin; and an expansive approach, which treats investment-inducing frameworks as binding commitments. The article also examines the divergent treatment of investor due diligence, contrasting decisions that make it a threshold condition of protection with those that treat it as one factor among several. It concludes that arbitral practice is converging, unevenly, on a balancing method that weighs foreseeability, proportionality and investor conduct, and situates that case law within the wider debate on climate policy and investment protection.