After a groundbreaking decision this summer by a Dutch court which ordered the government to cut its emissions by at least 25% within five years, expect to see more legal disputes related to climate change. While it may take some time before we see major lawsuits such as those that hit the tobacco industry, experts at ClientEarth, a non-profit group promoting environmental protection through litigation and advocacy, predict that governments and businesses will be increasingly challenged for failing to address global warming. Here are the five main legal grounds for filing.
1. Health and environmental laws.
It doesn’t have to specifically concern CO2 emissions. Legislation on environmental impact assessments, public health, habitat protection, clean air and chemical pollution provides a sufficient legal basis to halt carbon intensive projects. Invoking EU regulations, for instance, environmental groups including ClientEarth have challenged the construction of 14 new coal-fired power stations in Poland. “As a result of this action, five projects have been cancelled and nine are on hold,” says ClientEarth’s CEO James Thornton. The same type of legal grounds was used by NGOs against Shell’s oil exploration in the Arctic. “Sometimes it is not about getting to court, it is the economic argument that stops carbon intensive projects. To meet environmental concerns, they become too expensive to justify the investment,” explains Thornton .
2. Market regulation.
Granting state support to national fossil fuel industries could spur lawsuits for conflict with national carbon budgets. With fossil fuel subsidies amounting in 2013 to 550 billion USD worldwide, of which 100 billion goes to producers, this should be fertile ground for legal disputes. However, much depends on whether countries operate in the context of a free market, with state aid and competition rules, and whether they have established legally binding CO2 emissions reduction goals.
3. Loss and damage
In June, Vanuatu, Kiribati, Tuvalu, Fiji, Solomon Islands and the Philippines signed a declaration for climate justice, committing to hold big carbon polluters and their respective governments accountable for the damages they caused. Ten years ago Inuit people filed a legal petition against the US for failing to reduce greenhouse gases, thus damaging livelihoods in the Arctic. More recently, a man from Kiribati sought refugee status in New Zealand claiming that, due to global warming, his country is threatened by rising sea levels. There is no history of success in these cases, as it is hard to attribute specific responsibility– and establish the extent of the reparation – to a company or a government for the harm caused by climate events. Will the inclusion of loss and damage in the Paris climate deal make any difference? Not really. “If the Paris agreement is not legally binding, it will be a commitment of a political nature and an acknowledgement of the historical responsibilities for climate change,” says Thornton. “But surely there will be successful climate cases in the future. The first to be won may not be for financial compensation, but to reduce emissions.”
4. Duty of care for citizens.
Human rights laws can be used to obtain stronger climate action. In a historic first, a court in The Hague ruled the Dutch government should adopt tougher emissions targets based on a case brought by environmental group Urgenda. Although there will be an appeal, this is the first time a court has ordered a government to cut greenhouse gases. The case was based on the duty of care the government has towards their citizens, which is however applicable only in some countries .
5. Long-term financial risk
Imagine a world where boards of directors and trustees are sued because they failed to incorporate long-term financial risk of climate change into their investment decisions. This could actually happen in some countries. Litigation on long-term investment decisions is generally associated with pension funds, but it concerns all industries subject to the direct impacts of global warming, C02 regulation or technological competition from low carbon alternatives. The idea is that by ignoring the risks of climate change, companies expose themselves to value losses over time. Lawsuits could be brought in these cases under the principle of fiduciary duty. An example is a lawsuit in the US against a coal company that invested the money of the employees pension plan in its own stock, which has lost 96% over three and a half years. Nathan Fabian, Director of Policy and Research at Principles for Responsible Investment (PRI), a UN initiative which promotes sustainability within the investment community, explains: “Some companies have not fully considered the implications of the transition to a low carbon economy and what this means for their business.” He says that guidance from financial regulators and clarity on long-term government policies are key steps to be taken in this area. “This is why the climate conference in Paris is still so important, even though there is clearly a responsibility on the investment community and the companies’ side.”