The International Court of Justice has been asked to issue an advisory opinion on this question, and is currently hearing submissions from States, NGOs and international organisations.
The International Court of Justice (“ICJ”), the principal judicial organ of the United Nations, is currently hearing submissions from States, NGOs and international organisations following a request for an advisory opinion on States’ legal obligations in relation to climate change.
When issued, the advisory opinion is likely to have important consequences for the energy sector, as outlined below.
Why is the ICJ holding hearings on climate change?
Since 2021, following calls by grassroots climate advocacy organisations, small island nations have argued that they are facing an existential threat from climate change and have been advocating the need for stronger legal measures to hold States accountable, leading them to petition the United Nations for greater efforts to combat climate change.
Subsequently, in March 2023, the United Nations General Assembly requested the ICJ to issue an advisory opinion on States’ legal obligations in relation to climate change.
Ninety-one States have since made written comments to the ICJ in relation to these proceedings, as well as several NGOS and international organisations such as OPEC and the European Union. The ICJ is now hearing their oral submissions between 2 and 13 December 2024 before it issues its opinion, likely in 2025.
What is the ICJ being asked to opine on exactly?
In short, the ICJ has been asked to clarify the scope of States’ legal duties under international law with respect to climate change. Specifically, the ICJ was asked to address two key questions:
First, are there any obligations on States under international law requiring them to protect the climate system and prevent damage to the environment caused by greenhouse gas emissions? Such obligations may arise under existing international legal instruments, such as the United Nations Framework Convention on Climate Change (“UNFCCC”), the Paris Agreement (as well as other international treaties), or under customary international law.
Second, if so, what are the legal consequences of these obligations on States which have caused harm to the climate system and environment?
In particular, the ICJ has been asked to consider what (if any) obligations — including potentially reparations — are owed to both States harmed by climate change and peoples and individuals affected by climate change.
What does this mean for the energy industry?
An ICJ advisory opinion is not binding on the United Nations General Assembly or on States, but it is likely to carry a lot of authoritative, and moral, weight.
If the ICJ opines that States do have binding obligations to curb greenhouse gas emissions and limit climate change, a number of consequences may arise:
- States may consider revising their regulatory framework and overall energy policy, with more stringent environmental regulations (e.g., mandating a reduction in greenhouse gas emissions or imposing limits on certain activities) for the energy industry, and particularly fossil fuel companies. States might also increase incentives to accelerate the transition to renewable energy sources.
- Emitting States may also face a host of legal challenges in their own internal legal systems for any failure to act decisively against climate change. Climate advocates seeking to compel States to take more effective measures to combat climate change would likely rely on the ICJ advisory opinion to argue that States have breached binding obligations under public international law.
- If the ICJ opines that emitting States must indemnify or provide reparation to victims of climate change (whether other States, communities, or individuals), States may in turn hold the energy sector more directly accountable for environmental damages resulting from its activities, whether through legislation, lawsuits or compensation mechanisms.
- This may in turn lead to further increases in the number of climate change litigations against companies in relevant jurisdictions.
Conversely, States will also need to balance carefully any efforts to reduce their emissions and achieve the transition to renewable energy sources, on the one hand, and carbon neutrality with their existing obligations to actors in the energy sector under trade agreements and investment treaties, on the other hand.
Conclusion
The ICJ advisory opinion, when issued, is likely to have a profound impact on the energy sector, even if this impact will necessarily be mediated by both States themselves and climate advocates.
Energy companies should expect further regulatory actions and legal proceedings to play out across a myriad of different legal systems, and should therefore “watch this space.”
