Strategic Arbitration for Climate Change and Green Economy Dispute Resolution

¹ Department of Financial and Economic Law, Asia University, Taichung, Taiwan
² Faculty of Law, Universitas Muhammadiyah Yogyakarta, Yogyakarta, Indonesia
³ Faculty of Law, Universitas Gadjah Mada, Yogyakarta, Indonesia

^* Corresponding author: This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract

The accelerating urgency of climate change and the global shift toward a green economy have significantly reshaped legal and commercial landscapes, giving rise to complex transnational disputes. These conflicts involve various stakeholders, governments, corporations, investors, and civil society, and often stem from renewable energy investments, carbon credit agreements, sustainability-linked contracts, and regulatory transitions. In this context, arbitration emerges as a strategic and adaptable mechanism for resolving such disputes. Its procedural flexibility, enforceability of awards, neutrality, and capacity for technical expertise position arbitration as a preferred forum over traditional litigation, especially for cross-border environmental and commercial conflicts.This article uniquely positions arbitration as both a legal and a governance instrument for climate-related dispute resolution This article examines three core areas: the categories and strategic relevance of climate-related disputes submitted to arbitration; the evolving legal framework governing such arbitration, including international conventions, institutional rules, and soft law instruments; and the effectiveness of arbitration in balancing private contractual rights with the public interest embedded in environmental law. By assessing recent trends and challenges, the article argues that arbitration, if supported by reform and transparency, can enhance climate governance and legal certainty. Ultimately, it highlights arbitration’s growing role not only in resolving disputes but also in supporting global climate goals through enforceable and fair adjudication mechanisms.