Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/297246 
Authors: 
Year of Publication: 
2023
Series/Report no.: 
IFN Working Paper No. 1450
Version Description: 
February 13, 2023
Publisher: 
Research Institute of Industrial Economics (IFN), Stockholm
Abstract: 
It is often claimed that investment treaties will dissuade host countries from phasing out foreignowned CO2-intensive production. This paper uses a very simple economic framework to examine how such a problem might be alleviated through treaty reform, including increased carve-outs from compensation requirements, reduced compensation in case of regulation, exclusion of ISDS, and a shortened sunset clause in case of withdrawal/termination. While all reforms can address the stranded investment problem in certain circumstances, they either fail in other circumstances, or will not be accepted by both parties, suggesting a trade-o§ between effi cacy and acceptability of the reforms.
Subjects: 
Investment treaties
climate
stranded assets
regulatory chill
JEL: 
F21
F23
F53
K33
Document Type: 
Working Paper

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