Climate-related disasters are becoming more severe and frequent around the world. Yet, fossil fuel companies are profiting in the trillions churning out the coal, oil and gas that fuels these devastating events. These disasters cause destruction to countless lives, with the burden falling hardest on the most vulnerable and underserved communities.
In a first-of-its-kind legal case, Peruvian farmer Saúl Luciano Lliuya is suing the German energy giant RWE for such damage. Lliuya’s case argues climate change risks a glacial lake outburst flood that could destroy his property. RWE is one of Europe’s largest carbon polluters. The company’s RWE’s enormous emissions footprint is partially responsible for driving the global heating that is melting the Andean glaciers, Lliuya’s case asserts.
In May 2022, judges from Germany visited the lake at the centre of the case. Lake Palcacocha in Peru’s Cordillera Blanca mountain has swollen 34 times in volume over the last five decades. A flood could trigger a deadly landslide that inundates Huaraz, a city of 120,000 people below.
The case is based on a 2014 study that found 90 companies are responsible for two-thirds of cumulative global greenhouse emissions. “Considerable benefits have accrued to these carbon majors, and to their state-sponsors and investors. Given this, it seems reasonable to argue that they have an ethical obligation to help address climate destabilization”, stated the study.
Furthermore, a 2021 study published in Nature concluded that there is over a 99 per cent probability that the flood hazard from Lake Palcacocha is due to human-induced warming.
Significance for Australian fossil fuel companies
This is the first international case to quantify the contribution fossil fuel companies have made to global warming. This could have important implications for climate litigation in Australia, said Dr Keely Boom, Executive Officer, Climate Justice Programme.
“This case against RWE is significant for Australians because it would demonstrate for the first time that fossil fuel companies can be held directly responsible for their contribution to climate change.” This means if the case against RWE is successful, it could allow people affected by the impacts of climate disasters – such as wildfires and floods – to sue for damages against Australian fossil fuel companies, she said.
“Australians are at the forefront of climate impacts, they can see the impacts of fire, drought and flood up close and they are demanding climate justice”, said Dr Boom. “As someone who lives on the South Coast of New South Wales, I have seen first hand the enormity of suffering in the wake of these events, with many people still homeless and living in caravans or crowding in with friends and family.”
Setting a precedent for “mass litigation”
Australian fossil fuel companies are watching the result of this case. If it is successful, it could set a legal precedent. This could enable other victims of climate change to sue polluting companies for damages caused by climate impacts and disasters. This includes loss or damage to homes and incomes.
The court has already agreed that RWE would be liable for the damages if proven that the glacier poses a flood risk and that climate change has caused it to melt. To date, this groundbreaking decision has not been in any other case.
There are two Australian fossil fuel companies on the list of those most responsible for global emissions. This list includes BHP, which is responsible for 0.52 per cent of global emissions. Rio Tinto is the other, with 0.43 per cent.
Gas giant Woodside would also be significantly exposed. Woodside has recently voted to merge with BHP to fund its new gas wells in Western Australia. RWE is also a major purchaser of Woodside’s LNG production.
The damages of Lliuya’s individual case are relatively low at USD $20,000. However, climate change impacts a huge number of people globally. This means that this figure could increase very quickly, explained Dr Boom.
Australia is already second in the world in terms of the sheer number of climate cases. Furthermore, transnational litigation is possible in Australia. This means people from other countries, such as in the Pacific, could launch cases in Australia, said Dr Boom.
“If similar cases were successful in multiple jurisdictions, the potential legal liability for these fossil fuel companies could easily dwarf previous mass litigation actions like against asbestos and tobacco companies.” “I think fossil fuel companies across the world should be very nervous right now.”