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A New Hope for Climate Change Litigation: Holding Corporations to Account for their Greenhouse Gas Emissions

In this article, Bethen Gilroy (3rd Year LLB ),  explores the difficulties faced when seeking to hold large corporations to account for their role in climate change. Particular attention is paid to the recent case of Lliuya v RWE, where a peruvian farmer sought to challenge the effects of RWE's greenhouse gas emissions in Peru. The case signifies a considerable advancement in climate change litigation.

A New Hope for Climate Change Litigation: Holding Corporations to Account for their Greenhouse Gas Emissions

In 1988 the Intergovernmental Panel on Climate Change (IPCC) was established. Tasked with analysing and assessing climate change - and its impacts on a global scale - the move signified worldwide recognition that climate change was a real issue requiring immediate attention. Today, climate change is considered to be the most significant threat to the environment. A key factor responsible for accelerating climate change is the continuous increase of greenhouse gas emissions into the atmosphere. Since 1970, the human contribution to these gasses has risen by more than 70%,[1] with leading emitters found within the industry and agriculture sectors . In fact, a recent study published in 2013 suggests that just 90 corporations are responsible for producing 63% of cumulative global emissions to date.[2]

As such, it is clear that a small number of corporations are accountable for the majority of global emissions. However, little has been achieved in recent years forcing them to examine, and if necessary alter, their individual contributions. From a legal stand point, one of the most effective means of enforcing corporate responsibility with regards to climate change is through the courts. Yet, countless cases raised all over the world have seen next to no success. There remains one potent obstacle that litigants have yet to overcome - to provide clear evidence linking one individual emitter to a specific consequence of climate change in another region. What claimants lack is standing.

However, recent research now allows for an individual’s emissions to be distinguished in the atmosphere, thus marking a new era with regards to climate change litigation. It can now be shown how an individual corporation’s emissions have not only had an impact on the environment, but that they are also largely responsible for accelerating climate change. The question now remains as to whether the courts will accept this scientific development as a legal basis for bringing a claim.

 

Before analysing the role of individual corporations, it is necessary to establish exactly what ‘climate change’ is. Put simply, climate change is defined as a long-term variation in the average weather and temperature of the world at large.[3] While the Earth’s climate is constantly changing, it is a gradual process that should take place over centuries. Instead, the human impact on the atmosphere has resulted in a quickening of climate change with dangerous consequences. In less than 100 years, the average temperature of the Earth has risen by nearly 1°C[4]. Ultimately, with increasing temperatures comes higher sea levels - which have already risen by 19cm since 1900. As such, not only are entire islands at risk of being reclaimed by the sea, but the number and severity of storms and droughts are also increasing.

It is no secret that large corporations in the oil and gas industry are responsible for contributing unparalleled levels of greenhouse gas emissions into the Earth’s atmosphere. Therefore, suing these corporations for their emissions is not uncommon. For years, individuals have sought recourse through the courts to hold them accountable, however, the majority of cases have been unsuccessful. The case of Native Village of Kivalina v. Exxon-Mobil Corp[5] effectively demonstrates the challenges that individuals have faced.

In 2009, the village of Kivalina launched a federal lawsuit[6] against 22 oil, coal and power companies (including Chevron, Exxon-Mobil and Shell). The basis of the action was that the large quantity of greenhouse gas emissions produced by the defendants had a significant impact on global warming. The effects of climate change meant that their village was now on the brink of destruction, due to a significant decrease in protective sea ice and corresponding increase in flooding.  The sharp rise in the severity of storms meant that the village would have to relocate within six years. As such, the plaintiff’s sought monetary damages of up to $400 million to fund this relocation.

The defendants main contention revolved around the concept of standing. They asserted that the plaintiffs could not prove that the specific effects of climate change on the village were linked to their actions, and as such the village did not have standing to raise a claim.

The court of first instance decided in favour of the defendants owing to the fact that it agreed the plaintiffs lacked standing[7]. As a result, Kivalina appealed the decision to the Ninth Circuit. Similarly, the Ninth Circuit decided in favour of the defendants[8]. The court did not discuss the issue of standing, instead focusing its reasoning on the federal common law and the theory of public nuisance.

The judgement holds that if the plaintiffs were to sue the defendants successfully, they would need to pursue a public nuisance claim. The reasoning outlined that public nuisance “requires proof that a defendant’s activity unreasonably interfered with the use or enjoyment of a public right and thereby caused the public at large substantial and widespread harm”.[9]

Relying on the earlier judgement of American Electric Power Co v Connecticut,[10] the court held that the plaintiffs did not have a justiciable claim, owing to the displacement of federal common law by the Clean Air Act.[11] As such, the court did not deem it necessary to discuss whether Kivalina had standing.

However, of significant interest is the concurring opinion provided by Judge Philip M. Pro, which has been cited in subsequent cases. His discussion examines the concept of standing in detail. The opinion went as follows:

“By Kivalina’s own factual allegations, global warming has been occurring for hundreds of years and is the result of a vast multitude of emitters worldwide whose emissions mix quickly, stay in the atmosphere for centuries, and, as a result, are undifferentiated in the global atmosphere. Further, Kivalina’s allegations of their injury and traceability to Appellees’ activities is not bounded in time. Kivalina does not identify when their injury occurred nor tie it to Appellees’ activities within this vast time frame. Kivalina nevertheless seeks to hold these particular Appellees, out of all the greenhouse gas emitters who ever have emitted greenhouse gases over hundreds of years, liable for their injuries.”[12]

Judge Pro ultimately agreed with the decision of the district court that Kivalina lacked standing. Given that the village could not provide plausible evidence for distinguishing the defendants’ emissions in the atmosphere, they were unable to prove that their actions were directly attributable to the severe effects of climate change on their environment.

The case of Kivalina effectively illustrates the main hurdle faced by claimants when seeking to sue large corporations. Structuring a case in a way that clearly assigns blame to corporations who emit huge quantities of greenhouse gasses is virtually impossible. Greenhouse gasses are continuously released into the atmosphere, with no way of differentiating between them. Every person, therefore, has had some role to play, thus making it difficult for claimants to hold large emitters solely to account. With the burden of proof falling on claimants, it is no wonder why so many cases have been unsuccessful.

In recent years, pioneering research has managed to counter the difficulty of assigning blame. Two studies of note are that of Richard Heede and Friends of the Earth, which - when analysed together - provide a clear basis for outlining an individual entity’s contribution to climate change.

In 2013, a groundbreaking study was published by Richard Heede detailing how 90 companies can be held primarily accountable for the ‘climate crisis’ of recent years.[13] The companies range from investor-owned firms – household names such as Chevron, Exxon-Mobil and BP – to state-owned and government-run firms. Collectively, these corporations are responsible for contributing nearly two-thirds of the greenhouse gas emissions released into the Earth’s atmosphere since 1854.[14]

In order to reach this conclusion, Heede studied the annual production reports of the corporations before calculating the carbon content of each individual entity, based on their production of coal, oil and natural gas. He did this using internationally established guidelines on carbon factors as a benchmark for assessing the individual responsibility of each corporation.[15]

Chevron was the leading emitter among investor-owned companies, causing 3.5% of greenhouse gas emissions to date, with ExxonMobil not far behind at 3.2% and in third place, BP, causing 2.5%.[16] As such, a small number of decision makers are responsible for more than half of the worlds greenhouse gas emissions. In fact, the top 20 corporations identified in the study are collectively responsible for 29.5% of global emissions.[17]

What sparked Heede’s research was a previous study conducted with Friends of the Earth. In that report, the individual impact that just one of these corporations has had on the environment was analysed. The study examined Exxon-Mobil’s climate footprint since 1882 and translated the data into how they individually contributed to climate change.

As one of the biggest corporations within the global oil industry, Exxon-Mobil produces an average of 4.5 million barrels of oil every day.[18] Looking at their individual carbon production, Exxon-Mobil alone released almost double that of the entire United Kingdom into the Earth’s atmosphere in 2002.[19] The study uncovered that Exxon-Mobil’s emissions have contributed up to 3.7% of global temperature change since 1882, and 3.6% of the total sea level rise.[20] Even if all of Exxon’s emissions were to stop today, past emissions would still continue to have an effect on climate change up until the year 2200.[21]

It is evident that a new chapter has begun for climate change litigation with regards to holding corporations to account. Following Richard Heede’s research, it is now possible to single out the largest emitters. What remains is whether the courts will accept this as sufficient evidence to give future claimants standing. This is what a Peruvian farmer hoped to achieve in his legal bid against German energy company, RWE. Lodged before the regional court in Essen, the case has been brought by one man - Saúl Luciano Lliuya - who wishes to sue RWE for the impact of their emissions on global climate change.[22] The action is the first of its kind in Europe, thus the eventual conclusion of the case will set a clear precedent.

 

In 2014, the IPCC issued a report detailing how tropical glaciers located in the region of Latin America - specifically those in Peru - are at a heightened risk of retreat, due to the increase in global temperature.[23] The situation is expected to deteriorate, with temperatures in Central America predicted to increase by 1.6 degrees this century.[24] A severe consequence of melting glaciers is the increased risk of flooding to nearby towns and villages - a risk which has now become a reality for Lliuya. His home is situated next to Lake Palcacocha in Peru, which is at the foot of a rapidly declining glacier. The lake’s volume has increased eight times over as a consequence of the rise in glacial melt within the region. As a result, it is at a heightened risk of bursting its banks. If the lake were to overflow, the flood would reach the nearby city of Huaraz in just over one hour.[25]

Lliuya has based his claim on the 2013 report issued by Richard Heede, where RWE were placed among the top 90 corporations fuelling climate change. According to the report, RWE’s contribution to the cumulative total of greenhouse gas emissions stands at 0.47% - making it Europe’s largest emitter.[26]

The homes and lives of 50,000 people are at stake, meaning that measures need to be taken to reduce the risk of flooding. Several remedies are available to the people of Huaraz - but for a high price. Lliuya has therefore asked that RWE contribute €17,000 towards the cost of draining the lake and installing a warning system alerting nearby towns if a flood were to be imminent. The compensation sought amounts to 0.47% of the total cost to install the protective measures, correlating to the percentage of RWE’s contribution to climate change.

In response to Lliuya’s claim, RWE alleged that he had no legal basis to bring such an action. In a similar vein to the case of Kivalina, the company asserted that no definitive link tying their greenhouse gas emissions to the risk of flooding in Peru could be established.[27]

Rendering its judgement in December 2016, the court found in favour of RWE.[28] Their reasoning was based on the concept of legal causality. While Heede’s research has given plaintiff’s the means to provide solid evidence establishing a scientific link between a corporation’s emissions and climate change, there still remains the obstacle of whether it is legally viable. Lliuya intends to appeal the decision to the High Court in Hamm.

While Lliuya lost the first battle in his challenge against RWE, his legal bid is far from over. If his claim ends up being successful, a paradigm shift in how litigants can challenge corporations through the courts would ensue. In time, its precedent could see all big polluters having to pay their share of the cost in repairing the damage caused by climate change. The case of the Peruvian farmer is a crucial stepping stone in progressing cases of its type. The science supporting legal claims is becoming stronger and more transparent, consequently, every action sees a definitive step forward in how to make a legal bid successful.[29]

It is clear that while progress is being made, there remains a long way to go before corporations are effectively held to account for their actions. When comparing the impacts of greenhouse gas emissions on the environment to other forms of destruction - such as river pollution or deforestation - identifying those responsible is, perhaps, more blurred[30]. This inability to definitively provide courts with a concrete link between a flood in one part of the world and the emissions of a corporation in another, is why individuals have seen limited success. Without standing, litigants cannot establish that they have suffered harm.

However, Richard Heede’s report provides a new hope. His research has allowed for key contributors of global greenhouse gas emissions to be identified. To date, those who have suffered the consequences of climate change have been unable to hold those largely responsible to account. Therefore, this groundbreaking study - at the very least - acts as a stepping stone to providing them with the relief they seek.

From a legal standpoint the question remains as to whether courts will accept this scientific development as a basis for establishing standing. It is a common belief that it is the role of governments to address climate change, and while this may be largely true, more needs to be done.[31] The evolution of climate change litigation in recent years suggests that, in the near future, legal challenges against corporations will begin to succeed. If this is the case, significant improvements in the level of global greenhouse gas emissions will be made. The more cases that become successful against individual corporations, the more incentive they will have to reduce their emissions and take a proactive role in the global effort against climate change.

The future importance of the case of the Peruvian farmer should not be underestimated. It is the first legal challenge based on Heede’s research, thus the eventual conclusion of the case will outline just how much farther litigants will have to go to succeed. At the very least, however, the case has attracted significant public attention. Therefore, regardless of the outcome, Lliuya has achieved one thing. He has brought the failure of large entities in reducing their emissions into the spotlight. This alone will hopefully drive decision makers to change the way in which they conduct business, instead focusing on what truly matters - their individual responsibility towards combating climate change.

 

[1] IPCC, “IPCC Fourth Assessment Report: Climate Change 2007”, Intergovernmental Panel on Climate Change, (2007), chapter 2, located at: http://www.ipcc.ch/publications_and_data/ar4/syr/en/spms2.html

[2] R. Heede, “Tracing Anthropogenic Carbon Dioxide and Methane Emissions to Fossil Fuel and Cement Producers”, Springer Link, (22nd November 2013)

[3] D. Stillman, “What is Climate Change?”, NASA Educational Technology Services, (4 September 2015)

[4] J. Walton, “Six graphics that explain climate change”, BBC News, (30th November 2015), located at: http://www.bbc.co.uk/news/resources/idt-5aceb360-8bc3-4741-99f0-2e4f76ca02bb

[5] Native Village of Kivalina v. ExxonMobil Corp. [849 (9th Cir. 2012)]

[6] ibid.

[7] Native Village of Kivalina v. ExxonMobil Corp. [863 N.D. Cal. (2009)]

[8] Native Village of Kivalina v. ExxonMobil Corp. [849 (9th Cir. (2012)]

[9] ibid. at 11652

[10]  American Electric Power Co. et al. v Connecticut et al. [564 U.S. (2011)]

[11] [849 (9th Cir. (2012)] at 11657

[12] ibid. at 11675

[13] R. Heede, “Tracing Anthropogenic Carbon Dioxide and Methane Emissions to Fossil Fuel and Cement Producers”, Springer Link, (22nd November 2013)

[14] ibid.

[15] Intergovernmental Panel on Climate Change, IPCC guidelines for National Greenhouse Gas Inventories, (2006), vol. 3

[16] R. Heede, Op Cit, (2013)

[17] ibid.

[18] Friends of the Earth, “Exxon’s Climate Footprint: The Contribution of Exxon-Mobil to Climate Change since 1882”, Friends of the Earth International, (January 2004), page 8

[19] ibid.

[20] ibid, page 13

[21] ibid.

[22] D. Collyns, “Peruvian farmer demands climate compensation from German company”, The Guardian, (16th March 2015), located at: https://www.theguardian.com/environment/2015/mar/16/peruvian-farmer-demands-climate-compensation-from-german-company

[23] IPCC, “Climate Change 2014: Impacts, Adaptation, and Vulnerability”, IPCC, (2014), page 1520, located at: http://www.ipcc.ch/report/ar5/wg2/

[24] ibid, page 1502

[25] D. Rivas and others, “Inundation Modelling of a Potential Glacial Lake Outburst Flood in Huaraz, Peru”, University of Texas, (March 2014), page 39

[26] L. Friedman, “Claim blaming utility for devastating glacier melt in Peru may set landmark legal precedent”, E&E News, (6th April 2015), located at: http://www.eenews.net/stories/1060016270

[27] G. Reuter, “Peruvian farmer sues German energy firm RWE”, DW News, (11th November 2016), located at: http://www.dw.com/en/peruvian-farmer-sues-german-energy-firm-rwe/a-36506880

[28] Lliuya v RWE [Landgericht Essen (Az. 2 O 285/15)] (16th December 2016)

[29] L. Friedman, Op Cit, (2015)

[30] R. Heede, Op Cit, (2013)

[31] R. Cox, The Liability of European States for Climate Change, Utrecht Journal of International and European Law, (2014), pages 125–135

 

 

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