Abstract
The distribution of global climate finance is unjust, due to it concentrating on developed nations while leaving developing countries facing a growing shortfall of funds. This Article advocates for incentivizing climate-friendly outbound foreign direct investment (OFDI) from developed to developing countries (i.e., North to South) as a potential solution to this persistent challenge. It demonstrates that additional normative support for such a proposition can be drawn from climate change and human rights legal regimes. Under the climate regime, developed countries remain under a strict obligation to provide financial support. In the human rights regime, recent jurisprudential development shows that the promotion of climate OFDI is closely aligned with the states’ roles in regulating the extraterritorial human rights impacts of their outbound economic entities. Unfortunately, the existing network of international investment agreements (IIAs) fails to build upon this potential synergy. Strong IIA commitments to promote climate OFDI, especially between developed and developing countries, are virtually absent. This Article concludes that the contestability of climate OFDI promotion as a norm in IIAs is contributed by the differences in the scope and legal characteristics of these regimes, as well as the prevailing power imbalances among participating states. It proposes that developing countries must take the lead in formulating new commitments for climate OFDI promotion within IIAs, emphasizing alignment with overarching principles such as equity, sustainability and prevention of transboundary harm. An illustrative text, supplied at the end, outlines the general contours for such commitments, and the operational conditions.
Recommended Citation
Zaker Ahmad,
Contributions of Climate Finance and Human Rights Responsibilities in Shaping a North-South Outbound Climate FDI Promotion Commitment,
36 Fla. J. Int'l L.
1
(2024).
Available at: https://scholarship.law.ufl.edu/fjil/vol36/iss1/1