Recently a Dutch district court issued an unusual decision ordering oil company Royal Dutch Shell to dramatically reduce its greenhouse gas emissions by 2030, despite the lack of any specific Dutch law or regulation to that effect. This was a significant win for the environmental activist groups that brought the suit (including Greenpeace Nederland), but it is an ominous development for anyone who cares about property rights and the rule of law.
The District Court of the Hague stipulated that Shell was not breaking the law with its current level of greenhouse gas emissions, but that its violation of a more general requirement was “imminent,” and therefore required the court to act. The judges in the case cited a section of the Dutch Civil Code that governs violations of a “rule of unwritten law pertaining to proper social conduct.” Under this standard, a party like Shell can be at fault for behavior that fails to discharge its responsibilities under “generally accepted standards.”
In determining what constitutes such a standard, the court invoked international agreements and documents including the European Convention on Human Rights (ECHR), the United Nations’ Guiding Principles on Business and Human Rights (UNGP), and the OECD Guidelines for Multinational Enterprises, among others. Those invocations suggest a post hoc rationalization by the court for a preexisting conclusion it wanted to reach. More importantly, the motivated reasoning and loose definitions employed could easily be used by a future court to reach conclusions and compel actions that are even more radical.
The plaintiffs in the Dutch case, Milieudefensie et al. v. Royal Dutch Shell, claimed that Shell’s greenhouse gas emissions are human rights violations rather than mere nuisances. The court agreed. In ordering Shell to meet a particular schedule for decarbonization, the court applied guidelines that have either been previously considered nonbinding or to which the company was never a party. In the ultimate irony for advocates of environment, social, and governance (ESG) disclosure, the court even cited Shell’s own past statements of concern about climate change against the company.
The ruling’s logic is problematic in two major ways. First, it attempts to establish situations that are alleged and conditional as being proven and universal. Second, the court prioritizes the goal of minimizing global emissions in disregard of any reasonable balancing standard. Elevating ordinary, legal business transactions to the status of human rights violations creates an effectively unlimited jurisdictional precedent for future courts to act as super-legislative bodies.
The court cited Articles 2 and 8 of Section I of the European Convention for the Protection of Human Rights (ECHR), which respectively cover the “Right to life” and “Right to respect for private and family life.” The rights enumerated in this section of the ECHR are guaranteed by “the governments signatory hereto,” and, like the U.S. Bill of Rights, are generally negative restrictions on the powers of the state. Article 2 provides that everyone’s right to life shall be protected by law and Article 8 declares that everyone is entitled to “respect for his private and family life, his home and his correspondence,” similar to the U.S. Constitution’s Fourth Amendment.
To arrive at the court’s conclusion in Milieudefensie et al., we must agree that the ECHR no longer merely binds its signatory governments, but has been extended to cover actions of private parties—despite no law providing for that. We must also agree that Shell’s current level of greenhouse gas emissions is not only contributing to anthropogenic climate change, but that prospective future emissions will contribute to long-term warming to such a degree that it will cause the deaths—and disrupt the homes and correspondence—of residents of the Netherlands.
This argument is unconvincing as a whole, but consider the final part in particular. Dramatic predictions of catastrophic climate change, such as those considered by the Dutch court, are often worst-case scenarios, based on climate models that have consistently overestimated actual observed warming, and premised on what would happen far into the future without adaptation efforts taken in intervening years.
Of course, it is possible that climate change, even if exaggerated, might still cause future deaths from problems cited by the court, like “heat stress, increasing infectious diseases, [and] deterioration of air quality.” One way to assess the likelihood of such a future impact is to look at the vast improvements in living standards and reductions in deaths from a variety of sources that were achieved during the 20th century—improvements based largely on technologies powered by fossil fuels.
Statistician Bjorn Lomborg has estimated that the risk of dying from weather-related disasters such as hurricanes, floods, and drought has decreased by 99 percent since 1920. As Marlo Lewis of the Competitive Enterprise Institute (CEI) has catalogued, increases in life expectancy, per capita income, food security, and access to clean water, among other metrics, have skyrocketed during the same time period. Deaths from malaria—the deadliest climate-sensitive disease—have been halved since only 2000, at the same time that climate activists have been warning that the effects of climate change are already being felt.
The future for the Netherlands and the rest of the world, even as we navigate climate risks, will likely be overwhelmingly healthier, wealthier, and more technologically sophisticated than today. The threats that the plaintiffs in Milieudefensie et al. suggest will emerge in the coming decades will only become deadly if every individual and institution in the world does nothing to adapt to them.
The court also went out of its way to emphasize that its decision was not affected by a need to balance competing social goals, stating flatly that, “There is no room for balancing interests.” It also held that the conflicting goals of dramatically reducing greenhouse gas emissions while also meeting global energy demand were not relevant. The judges even seemed unconcerned that maximizing greenhouse gas reductions might be detrimental to other rights enumerated in the very international agreements it depended on to justify its conclusion. The UN Sustainable Development Goals, also mentioned in the court’s opinion, call for “climate action,” but they also expect progress on economic growth and poverty reduction, two things that would be negatively impacted by setting the most affordable and reliable sources of energy in the world on a course for extinction.
Further, the decision attempts to prop up its own conclusions by giving an unjustified field promotion to some of the documents it cites. Regarding the United Nations Guiding Principles on Business and Human Rights, the court held that, “Due to the universally endorsed content of the UNGP, it is irrelevant whether or not [Shell] has committed itself” to the agreement, even though the UNGP’s preamble states that, “Nothing in these Guiding Principles should be read as creating new international law obligations.” (A recent paper for the Business and Human Rights Journal documents the robust “discourse” around the Principles, not all of it positive.)
Similarly, the goals of the Paris Climate Agreement, the main source for the specific emissions reductions that the court ordered Shell to make, become, in the court’s opinion, “a universally endorsed and accepted standard.” This is not at all accurate. A 2017 CEI study by Christopher Horner and Marlo Lewis, for example, documented the agreement’s many flaws. Dozens of nonprofit research and advocacy groups in the United States opposed adoption of the treaty and urged President Trump to withdraw, as he eventually did. Many members of Congress also opposed the United States becoming a signatory in the first place and called for Senate review of President Biden’s decision to rejoin.
By relying on theoretically non-binding documents and agreements and then exaggerating their applicability, the Dutch district court sought to justify imposing a novel requirement on a private party. Worse, the logic of this approach is not limited to climate change, and could be applied to any issue about which a particular judge is sufficiently concerned.
The United Nations and its many appendant bodies issue a large number of reports every year. By the Milieudefensie ruling’s logic, any one of those could be cited by a court to justify imposing a new obligation on an individual, firm, or industry. Would a Dutch court in the 1970s have followed the lead of the United Nations Fund for Population Activities and ordered a company to impose population control measures on its workers? There was arguably as much of a consensus among elite policy makers about the threat posed by overpopulation then as there is about the dangers of climate change today.
Shell will almost certainly appeal the Hague district court’s decision, which may end up being reviewed by the Supreme Court of the Netherlands. If the ruling is allowed to stand, it will embolden a highly motivated constituency of environmental activists who will seek to advance similar legal theories in their home countries. We will have to wait and see how each nation’s governmental institutions respond.