Scholars assert that the accord has achieved more than would be expected of a non-binding agreement.
The leaders of 189 nations have ratified the Paris Agreement, pledging to address climate change through emissions reduction and adaptation measures. But the largest emitter of greenhouse gases per capita, the United States, has announced its intention to withdraw from this agreement.
The authors of a recent law review article argue that the Paris Agreement has still greater influence beyond individual nations’ pledges.
In their article, law professor David Hunter of American University and two of his law students, Wenhui Ji and Jenna Ruddock, claim that the Paris Agreement guides courts in litigation aimed at improving governments’ climate change responses. It also plays a role in litigation by requiring fossil fuel companies to disclose the financial risks that climate change poses for their products.
Although the Paris Agreement itself is binding, nations’ individual commitments—that is, their nationally determined contributions (NDCs)—are non-binding under international law. Each nation submits its own NDC, explaining what measures it will take to address climate change, such as emissions reductions or other mitigation efforts.
But in domestic law, courts sometimes use NDCs as a benchmark to determine whether governments are taking adequate steps toward their Paris Agreement pledges. Hunter and his coauthors explain that courts can hold their governments accountable for failing to meet their commitments.
For example, in New Zealand, a court held that the national government needs to reconsider its NDC based on new climate science. And in South Africa, a court held that the government’s approval of a coal-fired power plant was invalid because the government failed to conduct a “climate change impact assessment.”
Hunter and his coauthors explain that the court used South Africa’s NDC as a “’generally agreed’ benchmark for evaluating government decisions relating to climate change” and required the government to consider whether building a new coal-fired power plant would be consistent with its NDC.
Another way that courts are using the Paris Agreement, Hunter and his coauthors explain, is to enforce international human rights. A Dutch court, for example, used a two-degree temperature standard in a human rights-based lawsuit. This was because the Paris Agreement pronounces a goal of keeping the rise in the global temperature to not more than two degrees Celsius above pre-industrial temperatures.
In Urgenda v. Netherlands, an environmental group sued the Dutch government for weakening the nation’s emissions reduction plan. The group argued that the additional emissions caused by the new plan would raise global temperatures and harm human life. It also claimed that these harms would violate the government’s responsibility to protect the “right to life” required by the European Convention on the Protection of Human Rights and Fundamental Freedoms. The court agreed, using the Paris Agreement as evidence that temperature increases above two degrees would cause severe impacts and harm human life in violation of the government’s duty of care to its citizens.
In addition to using NDCs as a tool to hold individual governments accountable, these commitments signal economic risks of fossil fuel use that are starting to shift financial incentives away from investing in fossil fuels, Hunter and his coauthors suggest.
The Paris Agreement reveals a “global consensus” about the harms of carbon emissions, sending a “clear signal” that there will be strict regulation of carbon emissions in the future, Hunter and his coauthors argue. They also explain that the Paris Agreement demonstrates an intention to move away from fossil fuels toward other energy sources. These signals will affect future litigation about fossil fuel finances significantly, Hunter and his coauthors predict.
As demand for fossil fuels declines, the value of fossil fuel-based assets—such as oil, gas, and coal—will also decline. Hunter and his coauthors argue that as fossil fuel regulations increase—such as through the adoption of carbon taxes or emissions reductions—the costs of using fossil fuels will also increase.
Hunter and his coauthors say that fossil fuel companies have to explain the risks of increased prices and decreased demand in financial disclosure statements. They argue that companies that fail to disclose these risks could be liable for fraud and misleading shareholders. The Attorney General of New York, for example, has already attempted to pursue a lawsuit of this type against a fossil fuel company, alleging that the company misled shareholders about the implications of climate change.
Hunter and his coauthors argue that the Paris Agreement puts carbon-intensive industries “on notice” and opens the door for more lawsuits to force fossil fuel companies to disclose the financial realities of the industry.
In these ways, the Paris Agreement demonstrates a globally accepted understanding of the causes and effects of climate change and offers potential solutions to the problem, Hunter and his coauthors argue. They conclude that the Paris Agreement “provides a valid framework within which a court can evaluate climate mitigation efforts, financial disclosures, and investor expectations.”