"The oil company is the first to be held individually liable, but climate-justice
groups aim to ensure it isn’t the last
In a ruling designed to have far-reaching effects on the world’s largest oil
companies, a Dutch court has held Royal Dutch Shell liable for its
contributions to climate change, finding the massive energy company’s
ongoing fossil-fuel operations undermine basic guaranteed human rights.
The court ordered the company to act immediately to reduce those harms
by slashing its global carbon-dioxide emissions by 45 percent by 2030.
The ruling from the the District Court of the Hague, where Royal Dutch Shell
is headquartered, is expected to impact the company’s U.S. operations, and
U.S. advocates aim to ensure the effects are felt across the industry. “For
U.S. fossil-fuel companies, this is a reckoning day,” Kate DeAngelis of
Friends of the Earth U.S. tells Rolling Stone. “This isn’t just going to impact
Shell — it’s going to have a rippling effect.”
“This is obviously a groundbreaking verdict,” says lead lawyer Roger Cox.
“There will be a lot more climate-change litigation” with groups worldwide
already planning to build on the case against other fossil-fuel companies.
While courts have previously held governments liable for the harms of
climate change, Shell is the first individual company to face such a ruling.
Activists are determined that it will not be the last. Climate-justice groups
worldwide are planning to build on the case by taking fossil-fuel companies
in other countries to court. U.S. lawyers see new advantages to bolster
existing and future litigation against U.S. oil companies, while campaigners
ready demands for policy action by the Biden administration. Lawyers for
the Shell case also warn of new legal threats to individual oil-company
executives and shareholders.
This week’s ruling stems from a case that was brought in 2019 at the District
Court of The Hague. Friends of the Earth Netherlands (Milleudefensie),
Greenpeace Netherlands, several other groups, and 17,000 co-plaintiff
Dutch citizens filed a class-action lawsuit alleging that Shell has an
obligation to reduce its carbon-dioxide emissions and that it has violated
human rights by fueling the climate crisis.
The Dutch court largely agreed. In a sweeping judgement that details the
devastating harms of a warming planet, the necessity to restrict warming to
1.5 degrees Celsius over preindustrial levels, the significant contribution that
fossil fuels and major corporate producers make to that warming, the court
ruled Shell has an individual obligation therefore to reduce its own emissions
on a rapid timescale.
“The court acknowledges that [Royal Dutch Shell] cannot solve this global
problem on its own,” the judgement reads. “However, this does not absolve
RDS of its individual partial responsibility to do its part regarding the
emissions of the Shell group, which it can control and influence.” It adds,
“RDS does bear an individual responsibility, which it can and must
effectuate through its corporate policy for the Shell group.”
The ruling comes just one week after the International Energy Agency
released a landmark report finding that there can be no investment in new
fossil-fuel supply projects if the world is to avert the worst of the climate
catastrophe. The Dutch court reaches a similar conclusion, saying in its
ruling that the decision may cause Shell to forgo new investment in fossil-
fuel extraction and limit development of its existing reserves.
Critically, it also finds that Shell is not alone in this effort, writing, “It is
necessary to reduce the worldwide oil and gas extraction and to facilitate
the curtailment of CO2 emissions that cause dangerous climate change;
other companies will also have to make a contribution.”
Shell said in a statement that it expects to appeal the ruling. It pointed to
billions of dollars in investments in low-carbon energy, including electric-
vehicle charging, hydrogen, renewables, and biofuels. “We want to grow
demand for these products and scale up our new energy businesses even
more quickly,” Shell said. It has pledged to reduce its greenhouse-gas
emissions by 20 percent within a decade, and to net-zero before 2050.
But the court’s decision finds that those actions are insufficient, intangible,
and too unspecified to meet the global standard set by the Paris Climate
Accord, and to meet the companies’ human rights obligations.
Michael Burger, executive director of the Sabin Center for Climate Change
Law at Columbia University in New York, finds the court’s ruling historic.
“This is the first time that a court of law has drawn a clear connection
between a fossil-fuel company’s basic business model — the production
and sale of fossil fuels — and the threats to human rights that results from
climate-change impacts and [then] directed the company to do something
about it,” he tells Rolling Stone.
Among the most far-reaching aspects of this ruling is the court’s order for
how Shell must account for its emissions, potentially impacting other oil
companies — particularly Exxon and Chevron, which have been among the
most recalcitrant global energy companies to accept a full accounting
standard of their absolute carbon emissions. Shell is ordered to take
account of what are known in climate parlance as Scope 1, 2, and 3
emissions. Shell must consider the emissions of its parent company, all its
global subsidiaries, all its suppliers, and all its customers across the entire
chain of its enterprise everywhere that it operates throughout the globe.
That would include, for example, the climate-harming emissions released
when it fracks for oil or natural gas, builds a pipeline, ships its product by
tanker or receives a product from a supplier, refines its oil into gasoline,
turns its natural gas into the feedstock for plastics, stores its petrochemicals
in a tank or shipyard, and when its consumers burn its gasoline in their cars,
trucks, or airplanes. When every one of these sources is considered, the
court said, Shell’s global emissions must decline by nearly 50 percent over
2019 levels in just nine years.
The court left it to Shell to determine how and where to make the changes.
When asked how the sweeping ruling would be enforced, an exuberant
Donald Pols, director of Friends of the Earth Netherlands, explained that
while there is no explicit enforcement mechanism, the plaintiff can take Shell
to court if it fails to implement the ruling. And while Shell may appeal the
judgement, it is nonetheless required to follow it in the meantime.
Lawyer Roger Cox points out that the largest share of Shell’s operations are
located in the United States. While the court is clear that Shell can make
changes to its global operations in whatever way it deems fit, given the
scope, scale, and speed of the emissions cut that the court has required,
“it’s almost impossible that they could achieve this without impacting
operations everywhere,” including the U.S., argues Eefje de Kroon, climate
and energy campaigner at Greenpeace Netherlands.
U.S. climate campaigners are ready to ensure that not only are Shell’s
operations impacted by the ruling, but so too is the entire U.S. industry.
Janet Redman, Greenpeace U.S. Climate Campaign director, is taking the
call to U.S. policymakers starting with the Biden administration, arguing that
the ruling adds even more evidence for the necessity of swift action for a
“managed phase out” of fossil fuels. Redman also finds support in the ruling
for greater financial accountability from all oil companies for the impacts of
their entire operations. She’s looking to demands for reparations for
environmental and climate injustices to Indigenous communities and
communities of color on the frontlines of fossil-fuel activities and the
devastating impacts of climate change.
Critics of the ruling, including Shell, have argued that forcing Shell to reduce
its production will simply shift production and consumption to other
companies and consumers. Pols, the Friends of the Earth Netherlands
director, says European governments and the European Commission will
step in with policies that require an elevated climate ambition from
governments and companies to ensure a higher bar to a more level playing
field.
The court also provided a detailed retort to Shell’s argument, citing the
findings of, among others, the Stockholm Environment Institute. In his
response to the ruling, the Institutes’ senior scientist Peter Erickson explains
that even if Shell were to transfer its existing licenses to other companies,
the overall effect would be to reduce overall fossil-fuel supply by increasing
costs.
The ruling will also likely increase the risk calculation that investors,
policymakers, financiers, and others apply to fossil-fuel activities, increasing
their costs vis-à-vis alternatives and encouraging a barrel lost in oil, for
example, to be more readily made up in a ray of the sun. The individual
responsibility component, argues lawyer Roger Cox, may also increase the
likelihood that individual corporate executives and board members are held
liable for a company’s harmful activities, further increasing the risks
associated with fossil fuels.
Others see a clear pathway to U.S. climate litigation. Calling the court’s
decision “earth-shaking”, Kathy Mulvey of the Union of Concerned
Scientists notes that the Shell case in the Hague does not have an
immediate impact on U.S. courts, but she nonetheless sees great potential
in its findings on the individual responsibility of oil companies for climate
change. “ExxonMobil and Chevron in particular have refused to take
responsibility for reducing emissions from the use of their products,” Mulvey
says. The essence of the Dutch court’s ruling, she says, is that “if you dig it
up and sell it and profit from it, you’re responsible for it.”
Dr. Geoffrey Supran, research fellow at Harvard University, agrees. In an
email, he called the “individual responsibility” aspect of the ruling “a game-
changer,” which “legally and rhetorically inverts Big Oil’s decades-long
propaganda campaign” to switch responsibility for the climate crisis from
themselves to individual consumers.
“It is precisely this sort of corporate accountability, for the climate damages
caused by Big Oil’s products, that dozens of cities, counties, and states are
seeking in U.S. climate litigation. So, in my view, this Shell verdict provides
powerful precedent,” Supran argues.
The Shell case now joins a burgeoning international body of law conferring
the basic and fundamental human right to survive the climate crisis and hold
fossil-fuel companies accountable for causing it. Critical to this broad and
increasingly successful movement was the decades-long struggle of
Indigenous peoples to secure the United Nations Declaration on the Rights
of Indigenous Peoples, which confirms rights not only to their lands but also
the natural resources found on and within it.
Pols, director of the Friends of the Earth Netherlands, said that while he had
certainly hoped for a victory, he feared he’d “wake up in a nightmare.”
Instead, the exhausted director is celebrating a hard-fought win: “The future
looks a bit more bright than it was yesterday.”"
|
|