The law applicable to corporate liability for international damage arising from climate change

Abstract

For several years now, and with increasing frequency, individuals and non-governmental organizations have been initiating civil liability actions arising from climate change against greenhouse gas-emitting corporations. These claims are brought against the world’s largest emitters and typically seek compensation for the harm caused by their contribution to climate change, the progressive reduction of their emissions, or, in some cases, both. The international dimension of such cases is inherent, as global warming constitutes a worldwide phenomenon—both in its origin and in its consequences. The Rome II Regulation provides the applicable law framework that must be considered in such cases. Specifically, Article 7, which addresses environmental damage, is also applicable to climate-related harm. However, it proves particularly complex to determine the law of the generating event or that of the result, due to the global nature of both the emissions contributing to climate change and their effects, which are felt across the globe. Since the alleged harm occurs within the normal functioning of economic systems and results from authorized business activities, it is necessary to examine the extent to which permits and licenses influence the determination of the applicable law. This analysis should consider both Article 17 of the Rome II Regulation and the potential specificities of the European Union Emissions Trading System.