Realising Climate Change Objectives in Pakistan: A Proposal for Climate-Aligned Model Bilateral Investment Treaty

by Shafqat Abbas, University of West London

Abstract

(Addendum 22/10/2025) This paper addresses the urgent need for reforming Bilateral Investment Treaties (BITs) in Pakistan to align with climate change objectives, amidst the country’s vulnerability to climate impacts and the necessity for sustainable economic growth. Climate change poses significant threats to Pakistan, evidenced by extreme weather events and shifting agricultural patterns, which necessitate a robust legal framework that integrates environmental sustainability with foreign investment. The study critically examines Pakistan’s existing legal instruments, including the National Climate Change Policy (NCCP) and the Pakistan Climate Change Act of 2017, highlighting their focus on adaptation and mitigation strategies. However, it identifies a critical gap in the integration of these frameworks with international investment agreements, where current BITs often prioritise investor protections that may undermine national climate goals. The paper proposes a climate-Aligned Model BIT that incorporates climate-responsive provisions, advocating for investments that align with Pakistan’s climate agenda. By limiting protections to projects that contribute positively to climate resilience, the proposed reforms aim to create a conducive environment for sustainable investments in key sectors such as renewable energy, agriculture, and water management. The analysis also explores climate change litigation in Pakistan, emphasising the need for a cohesive strategy that addresses environmental challenges while attracting foreign capital. Ultimately, this paper contributes to the broader discourse on the intersection of investment treaties and climate action, positioning Pakistan as a case study for other developing nations facing similar challenges. The findings underscore the necessity of a paradigm shift in investment treaty structures, advocating for reforms that harmonise economic development with environmental stewardship, thereby fostering a resilient economy capable of withstanding climate impacts while promoting sustainable growth.

Realising Climate Change Objectives in Pakistan: A Proposal for Climate-Aligned Model Bilateral Investment Treaty is part of the TDM 3 (2025) - International Investment Arbitration - Environmental Protection and Climate Change Issues (Volume 4) and is available here www.transnational-dispute-management.com/article.asp?key=3126 (sign in to download).