Climate Change, Human Rights, and Private Capital: The Obligation of States to Close the Climate Investment Gap

Climate change affects humanity in many ways, such as rising sea levels, water shortages, agricultural droughts, and the displacement of people. Thus, climate change threatens the enjoyment of human rights. States must therefore put in place effective mitigation and adaptation measures to combat climate change. But since no public budget can finance those transformation efforts, combatting climate change requires large sums of private capital. However, the international community has identified a multi-trillion dollar ‘climate investment gap’. Against this backdrop, the present contribution argues that international human rights obligations call on states to urgently redirect private investment flows into climate mitigation and adaptation measures. The existence of such an obligation and its impact on concrete policy decisions is then illustrated by three practical examples: the announced withdrawal of European states from the Energy Charter Treaty, Austria’s windfall tax on energy profits, and the US Inflation Reduction Act.