Foreign Investment, International Law and Common Concerns by Tullio Treves Francesco Seatzu & Seline Trevisanut

Author:Tullio Treves, Francesco Seatzu & Seline Trevisanut
Language: eng
Format: epub
Publisher: Routledge

11

Promoting Investments in Sustainable Development Through Multilateral Environmental Agreements

Francesca Romanin Jacur

11.1 Introduction

International cooperation in environmental matters takes place mainly in the framework of complex normative and institutional architectures tackling specific environmental problems: multilateral environmental agreements (MEAs).1 International law and MEAs broadly endorse the concept of sustainable development, generally defined as the ‘development, which meets the needs of the present without compromising the ability of future generations to meet their own needs’.2 Beyond its pleasing definition and wide recognition, little consensus is found however, in theory, on its status as a legal norm and, in practice, on the criteria that activities such as nuclear energy and forestry projects, or carbon capture and storage, and genetic resources exploitation should meet to be considered sustainable.3

The practice of MEAs governing bodies, the Conferences of the Parties (COPs), increasingly reflects the difficulties of reaching consensus on how to combine the ‘interdependent and reinforcing pillars’ of sustainable development, i.e. economic development, poverty reduction and environmental protection.4 Besides these public interest goals, MEAs treaty bodies are now directly involving the private investors as partners to achieve global environmental goals, and consequently need to consider also their economic priorities. ‘In exchange’ for the private actors’ support in transition to more sustainable economies, MEAs offer them new business opportunities, financial and strategic support for the development of new technologies.5

These public–private partnerships (PPPs) in the MEAs context occur mainly in two ways: first, through market-based instruments recently developed under the climate change regime; and second, through MEAs financial mechanisms. Both ways need to be economically attractive to gain the investors’ trust and in the meantime respond to the requirements of sustainability. These private and public interests – even though not necessarily conflicting – need to be prioritized and reconciled one with another.

This recent trend of encouraging private investors’ participation in MEAs’ sustainable development objectives is mainly based on economic considerations. First, since the 1990s it has been repeatedly acknowledged – and the current financial crisis is vehemently confirming – that public financial resources are not sufficient to achieve contemporary sustainable development goals. Second, the use of public funding to catalyze private investment for these purposes produces greater benefits than using public funding directly. Third, the private sector is in a better position to achieve the transformational shift to a more green and sustainable economy, inter alia by developing and transferring new technologies. For these reasons, there is growing attention on innovative finance for sustainable development, which includes mutually reinforcing combinations of public and private resources.6

With these considerations in mind, this chapter first looks at the ways in which private investors participate in MEAs’ (still mainly) interstate investment schemes and financial mechanisms. What are the barriers to private investments? How are MEAs combining their sustainable development mandate with private investors’ necessities?

A second group of issues this chapter examines relates to other ways in which MEAs contribute to shape sustainable investments. Indeed, MEAs, by endorsing rules on impact assessment and public participation in environmental decision-making, strengthen procedural and participatory principles applicable to the investment domain.

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