In a precedent setting case this year, a Dutch court found Shell Oil liable for contributing to climate change and undermining basic human rights. The court ordered the company to slash its carbon emissions by 45% in nine years.
Until now, cases against carbon emitters have been thrown out, or decided based only on procedural issues. The Shell case was decided not on procedure but on its merits, meaning it was decided based on damage to the air, climate and human health caused by corporate operations. This was a first.
The Shell case went even further, finding Shell responsible for three sources of emissions, called “Scopes 1, 2 and 3”. Scope 1 encompasses emissions from corporate operations, things like toxic wastewater from fracking and methane escaping from oil wells. Scope 2 emissions are from manufacture of products made from oil and gas, like gasoline and plastics, even if they were made by companies other than Shell. Scope 3 emissions are from end users burning fossil fuels—electric utilities and people like you and me.
The fact that the court decided Shell is responsible for emissions downstream of their own operations is truly ground breaking, and an enormous win for the environment. It should make polluters from all industries shake in their boots.
The courts’ ruling also switches responsibility for the climate crisis from individuals to corporations, upending decades of industry propaganda blaming consumers for climate change. Oil companies have long said, “Everyone is responsible for climate change”. This case stands that argument on its head.
The Shell case also changes the landscape from individuals suing the government for personal losses; to governments, environmental groups and individuals suing oil and gas companies for massive public damage. The Shell case was brought by Friends of the Earth Netherlands, Greenpeace Netherlands and 17,000 Dutch citizens.
Currently twenty-six US cities are suing oil companies for pollution. Boulder Colorado, for example, is suing Suncor for air pollution and causing wildfires. According to energy journalist Antonia Juhasz, the Shell case will continue to unleash a wave of litigation around the world against oil and gas producers.
Big tobacco was finally defeated when litigation moved from individuals suing tobacco companies based on their personal losses, to cities and states suing for damage to the economy and public health costs. In the case of tobacco, it took thirty years for this shift to take hold. In the case of carbon emitters, it has taken about four years, an encouraging note.
Environmental groups are now taking on the American Petroleum Institute, accusing them of coordinated actions to suppress information about carbon pollution and climate change. Coordinated actions to mislead the public are illegal.
In response, oil companies say that judgements against them will raise the price of fuel and hurt consumers. They say that other oil companies will come in and fill the demand, creating unfair competition and nullifying any climate benefits. The assumption here is that oil will be replaced with more oil.
But renewables are now a better investment than oil. So the real solution is to invest more in renewables, which can and should ramp up to fill energy demand. So this should be the response back to oil companies: invest in renewables, not oil wells.
The road to corporate accountability will be fraught with arguments like these, and with stalling tactics. The long held assumption that corporations can do what they want and taxpayers will clean up after them is being thoroughly challenged. There will be more court cases against polluters, and more victories. As cases progress, more evidence will be presented, and more truth will come to light.
The oil companies’ arguments will get louder, of course. So the voices of the people and the media also must also get louder. The Shell Oil case was a ground breaking win, but the world will need all hands on deck to meet the coming challenges.
Sources:
Interview with Richard Kilmer, delegate to COP 26, November 15, 2021.
Bioneers Conference Panel, Tell It to the Judge Big Oil, November 13, 2021.
Juhasz, Antonia; Dutch Court Holds Shell Liable for Climate Harm: What Happens Now?, Rolling Stone, May 27, 2021.