A review of the indirect expropriation standard in the pandemic and decarbonization Eras: Finding the balance

Contemporary global environmental threats and the COVID-19 pandemic underscore the necessity of international collaboration in protecting public health and the environment. As states transition to renewable energy solutions to address climate change, regulatory measures may impact foreign investments and property rights. This article examines the challenges and criteria in distinguishing between non-compensatory legitimate regulations and indirect expropriation in investment law, as well as the limitations on the expropriation standard in recent treaties, questioning the relevance of the expropriation standard in protecting investments in modern times. As global efforts to decarbonize energy industries intensify, I argue that states and investors may need to collaborate to effectively balance states’ right to regulate with investment protection. Indeed, balancing these competing rights starts at the treaty level, not at the arbitration stage, since an arbitral tribunal can only interpret the treaties before it.