Towards a decolonial international economic order: Mandatory climate justice exceptions and the reform of investment treaties

Abstract

This paper examines how international investment and trade law perpetuate a chilling effect on climate action, particularly for Global South states. It analyses how expansive interpretations of investment protection, like "legitimate expectations”, shield carbon-intensive industries, and how unilateral measures like Carbon Border Adjustment Mechanisms (CBAMs) function as a modern form of "taxation without representation" under restrictive WTO rules. Drawing on Third World Approaches to International Law (TWAIL), the research argues for a fundamental re-embedding of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC). It proposes legal reforms, including a "Climate Justice Exception" in investment treaties and a dedicated "Climate and Trade" committee within the WTO, alongside policy recommendations such as "Revenue Recycling with a Justice Mandate" and a "Decolonial CBAM" model, to empower Global South climate sovereignty.