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The Dutch Climate case, a critical analysis.

Geplaatst op 01-07-2015  -  Categorie: Columns Mondiale duurzaamheid en recht  -  Auteur: Ted Thurlings

On Wednesday the 24th of June the Dutch District Court of The Hague gave judgment on a ground-breaking Climate case, brought about by the organization Urgenda and nearly 900 concerned citizens. Urgenda argued for a more strict emission policy on greenhouse gas (hereinafter: GHG) emissions. The Court ruled, for the most part, in favor of Urgenda, obligating the State to reduce GHG emissions by at least 25% by 2020 in relation to the level of GHG emissions in 1990.

Although this case is applauded by environmental enthusiasts all over the world , I question, from a legal point of view, the foundations of the ruling by the Court in this case (I have, in short, already given some critique on the Court’s ruling in the Dutch Newspaper ‘de Volkskrant’).

In principal the Dutch Climate policy is based on the EU Climate Policy. Therefore the Dutch policy cannot be analyzed on its own. The Ruling in favor of Urgenda means, as a consequence, that the Court finds the EU Climate policy of a 20% reduction by 2020 to be unlawful. The Court seems to consider this as well (see point 4.84 of the Court’s ruling). However, I believe that the Dutch Court does not have the competence to make such a ruling. I believe, based on the current Case law of the Court of Justice of the European Union (hereinafter CJEU), that only the CJEU has the competence to rule on the lawfulness of EU policy (See artikel 268 and 340 TFEU and CJEU 29 July 2010, C-377/09 (Agenor SA). I have already argued this in Dutch literature: T.J. Thurlings, ‘Aansprakelijkheid & Klimaatverandering: de Nederlandse Staat handelt niet onrechtmatig’, AV&S 2014/19, afl. 5/6,p. 126 to 130).

Furthermore, even if there was no competence issue, there are some remarks to be made to the Court’s ruling. First of the Court appears to base its assessment on the reduction obligations on the scientific data presented by the IPCC (Intergovernmental Panel on Climate Change). It outlines the IPCC scenarios with different reduction plans from developed and developing States. While the IPCC reports may be accepted as scientific fact, as regards the impact of greenhouse gas concentrations on the environment, this does not apply for the reduction distribution that the IPCC represents in the various scenarios. To achieve the desired concentration level, the IPCC proposes a reduction obligation for developed countries of 25-40 percent by 2020. The fact remains however that this reduction may be lower, if strong emitting developing countries (such as China) will also commit to significant reductions.

The distribution of the necessary reduction is not just a legal question, but also a political one. Moreover, the recognition of the position of the IPCC by some developed countries in the so-called Cancun agreements do not create a legally enforceable obligation. This recognition is a political declaration and not a recognition of liability.

Furthermore, the 25-40 percent reduction is related to the developed states as a group. This says nothing about the division between those states. In addition, I note that the EU has long been at the forefront when it comes to GHG reduction policy. As a party to the Kyoto protocol, the EU has for instance achieved actual reductions, where other states had to purchase allowances to meet their obligations (eg Japan) or even pulled out of the Kyoto protocol altogether (eg Canada).  Other states, for example the United States, did not participate in the Kyoto protocol at all. I therefore believe that it is very doubtful to consider a 20 percent reduction by the EU an insufficient contribution to the global reduction. It might well be argued that other developed countries are now, in relation to the EU, required to do more.

Last but not least, there is the issue of the (in)ability to implement measures with regard to industries that are covered by the so called European emissions trading system (EU-ETS, based on Directive 2003/87/EC, and subsequent amendments, hereinafter: ETS-directive). The State argued that higher emission reductions in the ETS sector are not allowed. However, Urgenda argued with reference to other States where such measures are being implemented, that additional measures in the EU-ETS sector are possible, and the State agreed (point 4.80 of the ruling). The Court therefore stated that the EU-ETS legislation thus does not prevent the State from pursuing a higher reduction. Furthermore, the argument from the State that other European countries will neutralize reduced emissions in the Netherlands and that GHG emissions will therefore not decrease as a whole (the so called ‘waterbed-effect’, see also: M. Peeters, ‘Europees klimaatbeleid en nationale beleidsruimte, NJB 2014/2109)  was not followed by the Court. The Court ruled (point 4.81):

The court also does not follow the State’s argument that other European countries will neutralise reduced emissions in the Netherlands, and that greenhouse gas emission in the EU as a whole will therefore not decrease. The phenomenon the State refers to and which could occur at various levels (between countries, but also between provinces, regions or on a global scale) and which could have various causes, is also known as the “waterbed effect” or “carbon leakage”. AR5/2013 describes research results from 2012, which show that a mean 12% of carbon losses will have to be taken into account. The accompanying document to the announcement of the European Commission of 22 January 2014 (“summary of the effect assessment”) referred to in 2.66 states that “so far there have been no signs” of carbon leakage. In view of this, it cannot be maintained that extra reduction efforts of the State would be without substantial influence. 

The accompanying document referred to is the document accompanying COM (2014) 15 final, being SWD (2014) 16 final. However, in this document, the Commission notes that the risk does exist that divergent national measures will prevail, and that this would be detrimental to the internal market and cost-effectiveness. Futhermore it seems that the Commission means with ‘carbon leakage’, the movement of industries outside the EU, not the ‘waterbed effect’. The relevant phrase of the document (SWD (2014) 16 final, page 2):

There is an increasing risk for divergent national approaches to prevail, which would be detrimental for the internal market and cost-effectiveness. No evidence is found on carbon leakage so far. It seems that existing measures have successfully prevented it, notably through the provision of free allocation of emission allowances, although the experience so far is not sufficient to draw decisive conclusions for 2020.

It should be noted that the influence of national measures on the cost-effectiveness of the EU-ETS, conflicts in my view with the objective of the ETS-Directive, and this kind of measures might not be permitted under EU law (CJEU April 14, 2005, C-6/03 (Deponiezweckverband) point 41 and 49). It follows from EU case law that further measures should be consistent with the objectives of the Directive. Cost-effectiveness is part of the objective of the EU-ETS (article 1 of the Directive). The Court’s ruling might therefore be impossible to achieve with regard to the EU-ETS sectors (See for a discussion on this topic also: L. Squintani and others, ‘Regulating greenhouse gas emissions from EU ETS installations: what room is left for the member states?’, in: M. Peeters and others (eds.), Climate Law in EU Member States. Towards National Legislation for Climate Protection, Cheltenham: Edward Elgar 2012, p. 67-88).

 

Ted Thurlings LL.M. is a PhD Candidate in Environmental Law at the Radboud University of Nijmegen