Bluer Than Blue: Exit from Policy Support for Clean Marine Energy

Abstract

The amendment or removal of superfluous government support policies is typically difficult, yet in the ever more important debate on low-carbon (i.e., clean) marine energy policy under the international law of climate action, the law of the sea, and international investment protection, there are additional dimensions of legal or economic peril. Coastal states enact policies subsidising clean energy investments, such as offshore wind energy generation, in their exclusive economic zones or continental shelves. Investors are attracted to the prospect that policies granting subsidies for ostensibly new industries are sufficiently durable. Are such subsidy policies salient or stale? In principle, the purpose of regulatory policy is the promotion of social welfare, and hence, there is an optimal incidence, magnitude, and duration of the subsidy, in essence, an ideal strategy for starting, altering, or exiting such policy. We aim to introduce the concept of optimisation to the design and implementation of regulatory policy in this context. Our contribution is to offer three maxims of optimal clean marine energy law and policy: the efficiency and equity of alternative regulatory arrangements; the continuous optimisation of such arrangements; and the recognition of linguistic entanglements in the law. We test these maxims against the case of clean marine energy policy on offshore wind energy generation. One legal implication for international investment protection is that coastal states should establish a policy exit clause in their investment contracts. Our analysis of policy optimisation is generalisable across policies supporting the transition to sustainable energy forms.