2018 was the year when the climate liability trend became a wave, with actions from New York City to France to the Philippines and Colombia putting the fossil industry under pressure to take responsibility for the climate impacts of its product.
“What was remarkable in 2018 was the rapid acceleration in the number of cases,” said Carroll Muffett, president of the Center for International Environmental Law. “It’s clear that this is a genie that neither the governments nor the companies can put back in the bottle at this point.”
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“From litigation to investigations, the strategies for holding the world’s biggest carbon polluters, including governments and corporations, accountable for climate damage are diverse and growing,” Climate Liability News reports. “They include suits to hold fossil fuel companies responsible for the climate damage done by burning their products and force them to pay for the costs of those damages. Others are trying to require governments to strengthen climate policies to protect their citizens.”
As well, “new avenues are being opened, including human rights arguments and even an industryimperiled by climate change taking on the fossil fuel industry,” CLN notes. “Together, they are creating optimism among climate activists that legal channels can make progress in fighting the climate crisis.”
InsideClimate News sees the same trend taking shape. “The past year saw a surge in new lawsuits filed against fossil fuel companies, and major developments in cases pressing governments for action in the United States and abroad,” InsideClimate states. “A climate denier is in the White House, pushing policies that will boost emissions. Congress is doing nothing to stop him. So citizens and local governments who are facing the impacts of rising seas, worsening heat waves, and extreme weather are increasingly looking to the courts for help.”
And Michael Gerrard, faculty director at Columbia University’s Sabin Center for Climate Change Law, pointed to a benefit beyond the courtroom. “Lawsuits, even if unsuccessful, can help shape public opinion,” he told ICN. “Mr. Scopes lost the monkey trial, but it led to a lot more awareness about the issue of teaching evolution.”
One United Nations report identified 654 climate liability cases in the United States as of March 2017, and another 230 in other countries, CLN writes. International highlights include the landmark Urgenda Foundation case, now under appeal to the Netherlands Supreme Court, which would require the national government to adopt more ambitious targets, and an investigation in the Philippines to determine whether fossils violated human rights by knowingly contributing to climate change.
The two publications go through similar lists of lawsuits initiated by cities, U.S. state governments, several different countries, and a variety of non-government plaintiffs. CLN recounts the continuing delays facing Juliana v. United States, which pits 21 youth plantiffs against the U.S. government, and cites the class action recently launched by Montreal-based ENvironnement JEUnesse (ENJEU) on behalf of Quebecers under 35 years of age.
Climate Liability News says 2019 will be the year when several pending cases begin bringing substantive evidence into public view. “That’s going to be the real sea change in this work in 2019,” Muffett told CLN. “The findings from the Philippines are going to come out, and more of these cases are going to move from the procedural battles to actually engaging on the merits.”
But InsideClimate News distinguishes between the new, untried legal arguments that are beginning to emerge and the more conventional courtroom strategies in other cases.
“As cities, states, and citizens press the courts to address climate change with novel legal arguments, dozens of more conventional lawsuits continue to churn too, challenging oil pipelines and coal facilities for their greenhouse gas emissions and the Trump administration as it rolls back the nation’s climate regulations,” InsideClimate notes. “Legal experts say the unconventional cases, whether cities suing oil companies, children suing the government, or a state suing Exxon for fraud, may face skepticism from judges, and it’s far too early to say what effect they will have.”
“Lots is happening, lots of boom and bang,” Patrick Parenteau, senior counsel in the Environmental and Natural Resources Law Clinic at Vermont Law School, told ICN. “But the carbon keeps going up and up. There you have it.”
Climate Outlook for 2019: Liability & Material Financial Risk
As the global transition to a low-carbon economy continued to accelerate, the impacts and responses to climate change dominated the news in 2018. The billions of dollars in property damages, lost businesses, and declines in state and local tax revenue in the US continues to reinforce concerns about the urgency of the climate crisis and foreseeability of financial losses associated with the increased intensity and severity of extreme weather events.
Throughout 2019 we will watch to see if the warnings issued in 2018 will be heeded — from courts holding corporate actors accountable for climate change, to institutional investors divesting from fossil fuels, to countries following through on commitments to reduce greenhouse gas emissions.
New reports highlighted the severity of climate impacts
In the final months of 2018, new reports highlighted the projected severity of climate impacts and the need for urgent action to transform our economy.
The Intergovernmental Panel on Climate Change (IPCC) released its long-awaited special report on climate change of 1.5ºC, the product of scientific review of over 1,500 articles backed by 195 countries. The world has already warmed by more than 1ºC, and the report offers dire predictions about the difference between keeping global temperatures to 2ºC versus the more ambitious goal of 1.5ºC. The report concludes that 1.5ºC remains achievable, but the global economy must act quickly to make the substantial changes necessary to avoid catastrophic harms.
On the Friday after Thanksgiving, the US Global Change Research Program released the Fourth National Climate Assessment (NCA4), a climate report that is both an assessment of the science of climate change and a forecast for the sources and causes of climate-related financial risk exposure to the US economy. According to the findings, without drastic changes, climate-related impacts will cost the US economy hundreds of billions of dollars a year, a cumulative trillion dollars or 10 % of US GDP, by 2100. The report’s findings provide a basis for reasonable estimates of the financial impacts of climate change and timelines that are particularly relevant to institutional investors with long time horizons.
In the year ahead, we’ll be watching for new emission reduction regulations based on the dire findings in these reports, as cities and states across the US continue to lead on adopting regulations that will increase adaptation and mitigation efforts to take ambitious action even in the absence of national leadership.
Completion of the Paris Rulebook signals a new stage of implementing climate solutions
At the end of COP24 in December 2018, the Katowice climate summit closed with the completion of the Paris Rulebook, among several key outcomes. The rulebook offers guidelines for states to measure and report carbon emissions in the implementation of their nationally determined contributions (NDCs). Now, action on climate change shifts to the states, who must implement their commitments made in the Paris Agreement. We will be watching for states to resolve some of the more contentious provisions that were left out of the rulebook, including the rules for voluntary carbon markets, at COP25 in Chile this year. We will also be watching whether states will adopt more ambitious emission reduction regulations that have already moved markets, technologies, and consumer preferences for products and services relevant for a low-carbon economy.
Philippines Human Rights Commission to release recommendations in climate change investigation
Throughout 2018, the Philippines Human Rights Commission heard testimony from impacted Filipinos and experts in a landmark national inquiry into the conduct of the Carbon Majors and the resulting impact on the human rights of the Filipino people. In 2019, we eagerly await the Commission’s recommendations intended for local and international agencies, both recommendations specific to the Philippines and general recommendations, including a model law to address climate change.
Climate liability cases test several legal theories and questions of shareholder fraud
In 2019, we anticipate key developments for a number of climate liability cases. We will be watching the great coverage in Climate Liability News of the global cases that go to the heart of emission reduction efforts. Among the over 800 climate litigation cases filed to date, we will watch for key rulings testing different legal theories.
First, there are currently 13 cases filed by cities, counties, and states across the US seeking climate damages from the largest contributors to greenhouse gas emissions. The number of cases is expected to rise over the course of 2019 both in the US and globally, with potential and pending requests for billions in damages from oil and gas companies — including Total, Exxon, BP, Shell, and Chevron, among others — who continue to invest to sustain business as usual despite the dire warnings about the urgency of climate change.
Second, having survived repeated attempts by the US Government to dismiss the case, plaintiffs in Juliana v. US will have their arguments heard before the US District Court in Eugene, Oregon. Through the Juliana v. US case, 21 youth plaintiffs have filed a constitutional case against the US government alleging that the US has violated their rights to life, liberty, and property by failing to take adequate action on climate change.
Third, we look to the next steps in the Urgenda case and whether the Dutch courts will affirm the lower court’s decision to hold the Dutch government accountable for its commitments to reduce greenhouse gas emissions.
Lastly, we will be keeping an eye on the lawsuits and investigations by the Attorneys General (AGs) of New York and Massachusetts. The New York AG is moving forward with its shareholder deception suit, alleging that Exxon misled investors about the risk of climate change to its business model. Now, the Supreme Court has also cleared the way for the Massachusetts AG to obtain records from Exxon in its consumer protection case. These court decisions could have implications for consumers far beyond Massachusetts.
The growing number of lawsuits raise real questions about the risk of mounting liabilities to Exxon and its shareholders. The New York AG’s shareholder suit explicitly raises questions about whether the company has willfully misled investors in quantifying the impact of climate risk, and the extent to which the litigation risks and, in turn, material financial risks associated with the impacts of and responses to climate change are reflected in the company’s valuation.
Investors are positioned to drive the low-carbon transition through divestment and investment
We will look for more ambitious climate action by investors who are well positioned to lead the charge in financing the transition to a low-carbon economy. At COP24, a global group of 415 investors managing $32 trillion in assets issued the 2018 Global Investor Statement to Governments on Climate Change (GISGCC), urging governments to increase the rate of investment in renewable technologies and improve financial reporting on climate risks to avoid and mitigate material climate-related economic impacts. In the US, the Securities and Exchange Commission (SEC) rejected a shareholder proposal from Trillium Asset Management seeking more explicit targets for greenhouse gas emissions. Some have argued that the financial regulator’s decision is a clear signal why divestment from fossil fuel companies may be a more productive strategy for climate-conscious investors than shareholder engagement. Since 2010, over 1,000 institutional investors with over $6.4 trillion in investments have committed to divest from fossil fuel assets. We expect this trend to continue.
Throughout 2019, we will continue to watch and advocate for accelerated and ambitious action to avoid the greenhouse gas emissions at the root of these impacts and advocate for the most ambitious opportunities to invest in the technologies and infrastructure needed to accelerate the transition to a low-carbon economy.
By Lisa Anne Hamilton, Director of Climate & Energy Program
Originally posted January 11, 2019
Katowice COP24 Outcome Incompatible with Paris Agreement
Ambition, Equity, and Human Rights Left Behind in Poland Climate Talks
FOR IMMEDIATE RELEASE
December 15, 2018
Katowice, Poland—As parties to the UN Framework Convention on Climate Change wrapped up two weeks of negotiations in Katowice, Poland, the halls of the Spodek Center echoed with the rising voices of young people, indigenous groups, vulnerable communities, and people of all nations who demanded that negotiators deliver on the promises made three years ago in the Paris Agreement.
In October, a long-awaited IPCC report exposed the urgency and necessity to limit global temperature increase below 1.5 degrees Celsius and warned of the dire consequences for human rights, human lives, and the global environment if we fail to do so. In Katowice, Parties arrived with a clear mandate: translate the IPCC’s findings into a commitment to raise ambition; deliver a climate action package commensurate with the level of ambition and committed resources required to reach this goal; and adopt a rulebook to guide how it happens.
“We are deeply disappointed with the outcome of these negotiations,” said Erika Lennon, CIEL Senior Attorney. “Simply put, the outcome of COP24 is not compatible with the Paris Agreement, which promised to protect, respect, and consider human rights in climate action. In the final hours of negotiations, the only reference to human rights disappeared from the text when Parties punted a decision on carbon markets for another year.1 The rulebook gavelled in at the Spodek Center in Katowice offers too little people-centered, rights-based guidance for countries to jointly deliver on the Paris promises, conditions that the IPCC recognizes as necessary to keep global temperature increase below 1.5 degrees Celsius. As delegates return home and countries work toward increasing ambition and enhancing national climate commitments, they must also remember that they are already bound by international agreements to respect human rights, and that these must drive how they implement necessary climate action and ensure equity.”
“The IPCC report made clear that respect for human rights and robust public participation are a prerequisite for effective climate action,” said Sébastien Duyck, CIEL Senior Attorney. “Not only have countries largely failed to adopt these recommendations in Katowice, but the COP itself casts a long shadow on the role and value of stakeholder engagement in UN climate processes. Poland’s overt exclusion of and attacks against civil society participants at the COP sends a chilling message about the direction of human rights protections at the UNFCCC. We look to Chile, a country that championed the adoption of the Escazú Agreement, the regional agreement on environmental democracy, to facilitate this process in a truly participatory manner going forward.”
“The failures here won’t stop the climate crisis, but nor will they stop people worldwide from taking urgent action to confront climate change,” said Carroll Muffett, President of CIEL. “Where negotiators are failing, people are rising—in the streets, in the courtrooms, in boardrooms. People are fighting against rising climate chaos with every tool they can find. And the governments and corporations must now decide if they will take bold action on climate or accept responsibility for failing to do so.”
Contact: Amanda Kistler, Communications Director, +1 202 742 5832, email@example.com
- Article 6 of the Paris Agreement created both market (articles 6.2 and 6.4) and non-market mechanisms (article 6.8) through which Parties could cooperate to achieve their mitigation goals. Market mechanisms include trading of internationally transferred mitigation outcomes or carbon credits and through project-based emissions credits via the so-called “sustainable development mechanism.” Non-market mechanisms allow for collaboration and coordination between parties to enhance mitigation and adaptation ambition.