This Article examines an unexplored issue arising at the intersection of international economic law and international environmental law: How might international economic law adapt to allow states in the Global South, which are disproportionately impacted by the sudden and unforeseen impacts of global climate change, to exit or modify economic relationships that render such states more vulnerable to these negative impacts? This Article begins with an explication of the unique features of international economic law and international environmental law, and argues that the architecture of modern international economic law, which requires a certain degree of environmental stability in order to incentivize private investment, could limit a capital importing state‘s ability to respond to unforeseen environmental harm resulting from climate change. The limited solutions currently available to a capital importing state facing such circumstances, including breach, denunciation or withdrawal, could pose political, economic, and reputational costs that leave the developing state in the undesirable position of being untethered to the system of international economic law.
This Article argues that climate change provides a unique opportunity to animate the moribund doctrine of fundamental change of circumstances, rebus sic stantibus, to assist states in managing the impacts of climate change within the realm of international economic law. The doctrine, rooted in equity, may provide a basis for exiting an agreement or, perhaps more desirably, renegotiating the agreement. The party invoking the doctrine must illustrate that the changes are unforeseen, the circumstances constitute an essential basis of con- sent to be bound by the underlying agreement, and the changed circumstances radically transform the party‘s ability to perform its obligations. Although the International Court of Justice has narrowly interpreted these doctrinal ele- ments in the past, the climate change moment creates the imperative to broaden the scope of the doctrine and bring more flexibility to the current system of in- ternational economic law. The framework offered in this Article provides a roadmap for doing so.