September 2023 Updates to the Climate Case Charts
Each month, Arnold & Porter and the Sabin Center for Climate Change Law collect and summarize developments in climate-related litigation, which we also add to our U.S. and non-U.S. climate litigation charts. If you know of any cases we have missed, please email us at [email protected].
HERE ARE THE ADDITIONS TO THE CLIMATE CASE CHART FOR UPDATE #174:
Montana Trial Court Ruled that State Law’s Restriction on Consideration of Climate Change Impacts Violated Youth Plaintiffs’ Constitutional Rights
In a lawsuit brought by 16 youth plaintiffs, a Montana trial court ruled that a provision of the Montana Environmental Policy Act (MEPA) prohibiting consideration of greenhouse gas emissions and corresponding climate change impacts in environmental reviews (the MEPA Limitation) violated the plaintiffs’ right to a clean and healthful environment under the Montana Constitution. The court held that the plaintiffs had a fundamental right to a clean and healthful environment, “which includes climate as part of the environmental life-support system.” The court also held that a statutory provision limiting the remedies available to MEPA litigants violated the Montana Constitution because “it removes the only preventative, equitable relief available to the public and MEPA litigants.” The court issued its findings of facts, conclusions of law, and order less than two months after the conclusion of a seven-day trial at which the plaintiffs and plaintiffs’ expert witnesses testified regarding climate science, the effect of greenhouse gas emissions in Montana, and the impacts of climate change on children in Montana. The court found that “[t]he unrefuted testimony at trial established that climate change is a critical threat to public health” and that the plaintiffs “have been and will continue to be harmed by the State’s disregard of [greenhouse gas] pollution and climate change pursuant to the MEPA Limitation.” The court further found that “[w]hat happens in Montana has a real impact on fossil fuel energy systems, CO2 emissions, and global warming” and that the State defendants’ actions to permit fossil fuel activities with no environmental review of greenhouse gas emissions and climate change increased Montana’s emissions and “exacerbate anthropogenic climate change and cause further harms to Montana’s environment and its citizens, especially its youth.” In addition, the court found that the plaintiffs proved standing to bring their claims based on injuries to their physical and mental health, homes and property, recreational, spiritual, and aesthetic interests, tribal and cultural traditions, economic security, and happiness (though the court said mental health injuries “directly resulting from State inaction or counterproductive action on climate change” did not on their own establish a cognizable injury). The court concluded that “[e]very additional ton” of greenhouse gas emissions exacerbated the plaintiffs’ injuries. The court also concluded that there was a fairly traceable connection between the State’s disregard of greenhouse gas emissions pursuant to the MEPA Limitation and the plaintiffs’ injuries and that the plaintiffs proved redressability because the State defendants could deny permits for fossil fuel activities that would result in unconstitutional levels of greenhouse gas emissions. Citing the Montana Constitution, transcripts of the constitutional convention, and Montana Supreme Court precedent, the trial court held that the constitutional right to a clean and healthful environment requires “enhancement” of Montana’s environment and “is complemented by an affirmative duty upon [the] government to take active steps to realize” the right. The court also cited Montana Supreme Court precedent holding that MEPA was essential to State efforts to meet its constitutional obligations. The court concluded that “[b]y enacting and enforcing the MEPA Limitation,” the State failed to meet its affirmative duty. The court further concluded that the MEPA Limitation did not survive strict scrutiny because the State failed to present any evidence of a compelling governmental interest for the provision.” The court noted that undisputed testimony established that the defendants could consider greenhouse gas emissions and climate change and that “clean renewable energy is technically feasible and economically beneficial.” The court further found that even if a compelling interest were established, the MEPA Limitation was not narrowly tailored to serve that interest. The Montana attorney general’s office indicated the State would appeal the decision to the Montana Supreme Court. Held v. State, No. CDV-2020-307 (Mont. Dist. Ct. Aug. 14, 2023)
DECISIONS AND SETTLEMENTS
D.C. Circuit Said Surface Transportation Board Gave Insufficient Consideration to Environmental Effects of Utah Rail Line
The D.C. Circuit Court of Appeals found “numerous” violations of the National Environmental Policy Act (NEPA) in the Surface Transportation Board’s review of the proposed construction and operation of an 80-mile rail line in Utah for which the predominant purpose would be transporting waxy crude oil produced in the Uinta Basin. The violations included failure to disclose reasonably foreseeable upstream and downstream effects of increased oil drilling and refining, including greenhouse gas emissions from combustion. The court was not persuaded, however, that any mischaracterization of the upstream environmental and downstream climate change impacts of the project as “cumulative” instead of “indirect” impacts had any prejudicial effect. The court also found violations of the Endangered Species Act and the Interstate Commerce Commission Termination Act (ICCT Act), but not the National Historic Preservation Act. With respect to the ICCT Act, the D.C. Circuit found that the Board’s order exempting the project from the full application requirements was arbitrary and capricious because the Board failed to weigh certain environmental effects, including climate effects of the combustion of fuel resulting from a major expansion of oil drilling. The court said “the ICCT Act necessitated a more fulsome explanation for the Board’s conclusion that the Railway’s transportation benefits outweighed the project’s environmental impacts.” The court vacated the exemption order, as well as the environmental impact statement and biological opinion. Eagle County v. Surface Transportation Board, No. 22-1019 (D.C. Cir. Aug. 18, 2023)
D.C. Circuit Denied Rehearing on Nondelegation Claim Challenging AIM Act’s HFC Phasedown Rule; Refrigerant Manufacturer Voluntarily Dismissed Challenges to HFC Allocations
On August 18, 2023, the D.C. Circuit Court of Appeals denied a refrigerant manufacturer’s request for panel rehearing or rehearing en banc of the court’s decision rejecting the manufacturer’s nondelegation challenge to a U.S. Environmental Protection Agency (EPA) rule implementing the phasedown of hydrofluorocarbons (HFCs) pursuant to the American Innovation and Manufacturing (AIM) Act. The manufacturer had asked for reconsideration of the panel’s ruling that the Clean Air Act’s exhaustion requirement required the manufacturer to first raise before EPA its claim that the AIM Act impermissibly delegated legislative power to EPA. On August 23, 2023, the manufacturer filed a motion to voluntarily dismiss separate petitions for review that sought review of EPA’s notices regarding the 2022 and 2023 allocations for production and consumption of hydrofluorocarbons. Heating, Air-Conditioning, & Refrigeration Distributors International v. EPA, No. 21-1251 (D.C. Cir. Aug. 18, 2023); RMS of Georgia, LLC d/b/a Choice Refrigerants v. EPA, Nos. 22-1025, 22-1313, 23-1104 (D.C. Cir. Aug. 23, 2023)
First Circuit Upheld EPA’s Remedy Selection for Housatonic River, Including EPA Consideration of Rejected Alternatives’ Greenhouse Gas Emissions
The First Circuit Court of Appeals denied a petition by environmental groups challenging a permit issued by EPA to govern cleanup of polychlorinated biphenyls (PCBs) from portions of the Housatonic River. The First Circuit found that EPA properly considered greenhouse gas emissions in determining that a “hybrid” disposal approach would outperform fully offsite disposal in various metrics. The court rejected petitioners’ contention that under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) provision authorizing selection of remedial actions that do not meet certain applicable state and federal standards, only local impacts could be considered in determining whether compliance with the otherwise applicable standard would result in “greater risk to human health and the environment than alternative options.” In this case, the petitioners argued that it was not appropriate for EPA to consider environmental risks to communities away from the river, including risks related to greenhouse gases emitted in the course of offsite transportation. The First Circuit concluded that CERCLA’s statutory text “unambiguously” allowed EPA to consider health and environmental impacts resulting from noncompliance or compliance with the applicable federal and state standards, regardless of where the impacts occurred. The court’s opinion also noted that EPA’s rationale for choosing a remedy that did not include thermal desorption included the potential long-term impacts—including higher greenhouse gas emissions—of that remedial option. Housatonic River Initiative v. EPA, No. 22-1398 (1st Cir. July 25, 2023)
Federal Court Stayed Proceedings in Challenge to Minnesota’s Adoption of California Vehicle Standards to Wait for D.C. Circuit Ruling in Related Case
In a case challenging Minnesota’s adoption of California’s low-emission vehicle and zero-emission vehicle standards, the federal district court for the District of Minnesota stayed proceedings during the pendency of Ohio v. EPA, in which the D.C. Circuit has been asked to determine whether the Energy Policy and Conservation Act of 1975 preempts California’s standards and whether the Clean Air Act’s provision allowing EPA to grant California preemption waivers is unconstitutional. The plaintiffs challenging Minnesota’s adoption of California’s standards make the same arguments. The district court found that the risk of contradictory rulings and lack of clarity was “grave” and that it would be “prudent to allow the D.C. Circuit to weigh in first on these heady constitutional issues.” The district court also noted that this case was in its “nascent stages” and that potential prejudice to the petitioners was minimal. Clean Fuels Development Coalition v. Kessler, No. 0:23-cv-00610 (D. Minn. Aug. 24, 2023)
Texas Federal Court Declined to Certify Class for Investors’ Securities Fraud Claims Regarding Exxon’s Alleged Misstatements Regarding Proxy Cost of Carbon
In a securities fraud class action against Exxon Mobil Corporation (Exxon) and Exxon officers, the federal district court for the Northern District of Texas denied a motion by the lead plaintiff to certify a class to the extent the motion sought to certify claims regarding the defendants’ alleged misstatements about carbon proxy costs. The court determined that the defendants sufficiently rebutted the presumption of reliance on the alleged misstatements with an expert’s analysis that found no statistically significant negative price reactions to alleged corrective disclosures that included a November 2015 article about the New York Attorney General’s investigation into whether Exxon disseminated inaccurate information about climate change, a January 2016 article about a California Attorney General investigation about Exxon communications about business risks from climate change, and a 2016 op-ed by Senators Elizabeth Warren and Sheldon Whitehouse entitled “Big Oil’s Master Class in Rigging the System.” The court said the expert’s analysis not only rebutted the presumption of reliance by showing a lack of price impact but also supported the defendants’ assertation “that the market did not care about the state attorneys general’s investigations into whether Exxon Mobil misled investors about its internal use of carbon proxy costs.” The court also found unpersuasive the plaintiff’s theory characterizing Exxon’s 2016 third quarter earnings release (which did have a negative price impact) as partially correcting previous public statements about carbon proxy costs. The court did certify a class with respect to the plaintiff’s remaining claims related to the defendants’ alleged failures to properly account for and disclose losses related to certain bitumen operations in Canada and dry gas operations in the Rocky Mountains. Ramirez v. Exxon Mobil Corp., No. 3:16-cv-03111-K (N.D. Tex. Aug. 21, 2023)
Federal Court Said Forest Service Failed to Take a Hard Look at Timber Harvest’s Climate Change Impacts
The federal district court for the District of Montana barred the U.S. Forest Service from continuing with a project in the Kootenai National Forest until the federal defendants remedied violations of the National Environmental Policy Act, Endangered Species Act, and National Forest Management Act. The project involved commercial timber harvest on 3,902 acres, 45% of which was to be clearcut. The NEPA violations included a failure to adequately assess the project’s climate impacts. The court determined that the Forest Service considered the project’s impact on carbon emissions “only in general terms, which does not meet NEPA’s ‘hard look’ standard.” The court said the Forest Service failed to explain its determination that no further analysis of the project’s impacts on climate change was required because the project would affect “only a tiny percentage of the forest carbon stocks of the Kootenai National Forest, and an infinitesimal amount of the total forest carbon stocks of the United States.” The court noted that the Ninth Circuit had rejected this logic in a case involving coal mining. In the instant case, the court identified two specific shortcomings in the Forest Service’s analysis: (1) a reliance on “cookie-cutter and boilerplate” analysis instead of utilization of “high quality and accurate information” as required by NEPA and (2) a failure to provide a scientific explanation to back up the assertion that a net increase in carbon sequestration resulting from a healthier forest would outweigh the short-term loss of carbon from logging. The court distinguished two earlier cases that involved environmental reviews of smaller logging projects. Center for Biological Diversity v. U.S. Forest Service, Nos. 22-cv-114, 23-cv-3 (D. Mont. Aug. 17, 2023)
Arizona Federal Court Rejected Claim that BLM Failed to Consider Climate Change’s Exacerbation of Grazing Impacts
The federal district court for the District of Arizona found that the U.S. Bureau of Land Management (BLM) failed to take the hard look required by NEPA when it reviewed a resource management plan that allowed livestock grazing on portions of the Sonoran Desert National Monument. The court found that BLM arbitrarily relied on a “two-mile benchmark” to forecast where grazing would occur and failed to consider the impacts of fencing off certain areas. The court rejected other NEPA arguments, including the plaintiffs’ contention that BLM did not adequately analyze how climate change would exacerbate the impacts of grazing. The court said the plaintiffs cited no authority requiring specific disclosures regarding the impacts of drought on biological resources, that BLM’s environmental assessment acknowledged that climate change and drought could negatively impact Monument resources, and that no more was required of BLM at the programmatic level. The court also rejected a Federal Land Policy and Management Act claim as unripe and concluded that BLM had abided by the National Historic Preservation Act. Western Watersheds Project v. U.S. Bureau of Land Management, No. 2:21-cv-01126 (D. Ariz. Aug. 9, 2023)
Federal Court Declined to Dismiss Suit Seeking Endangered Species Act Consultation for Washington’s Aquatic Cyanide Limits
The federal district court for the District of Columbia denied EPA and other federal defendants’ motion to dismiss claims that EPA violated the Endangered Species Act (ESA) when EPA approved water quality criteria for cyanide submitted by Washington state in 1993, 1998, and 2007. The court rejected arguments that the claims were untimely and did not challenge final agency action. The court also found that the plaintiff pled sufficient facts to assert violations of ESA regulatory requirements for reinitiation of consultation if “new information reveals effects of the action that may affect listed species or critical habitat in a manner or to an extent not previously considered.” The new information alleged in the complaint included new scientific information showing that “accelerating climate change impacts are … likely to amplify the toxicity of cyanide on fish,” rendering approved cyanide standards inadequately protective. Center for Biological Diversity v. EPA, No. 1:22-cv-00486 (D.D.C. Aug. 8, 2023)
Federal Court Rejected Challenges to Biden Administration Moratorium on Oil and Gas Leasing in Arctic National Wildlife Refuge
The federal district court for the District of Alaska dismissed all claims against federal defendants in an action challenging the Biden administration’s temporary moratorium on the implementation of an oil and gas leasing program on the Coastal Plain of the Arctic National Wildlife Refuge. The Tax Cuts and Jobs Act of 2017 (Tax Act) included provisions amending the Alaska National Interest Lands Conservation Act to allow oil and gas development on the Coastal Plain, directing that at least two lease sales be conducted, and setting deadlines of December 2021 and December 2024 for those sales. The court concluded that the Tax Act only required that post-lease sale components of the oil and gas development program be completed “within a reasonable period of time,” not by a date certain. The court also concluded that the President and the agency defendants acted within their authorities under the Tax Act and other statutes. The court also rejected the plaintiffs’ contentions that the moratorium violated the Administrative Procedure Act. The court found, among other things, that the defendants provided a reasoned explanation for the change in their position as to the sufficiency of the NEPA review for the leasing program, which was initially conducted during the Trump administration. The court noted that the environmental impact statement for the program failed to consider greenhouse gas emissions estimates resulting from foreign oil consumption, which the Ninth Circuit indicated was required in a December 2020 decision. The court found that the reasons for the moratorium were “tethered to a concern about legality and judicial review and not to some unrelated concern, such as a political motivation or desire to address climate change,” even if those motivations also were present. Alaska Industrial Development & Export Authority v. Biden, No. 3:21-cv-00245 (D. Alaska Aug. 7, 2023)
Texas Federal Court Rejected Environmental Challenge to Expansion of Crude Export Terminal
The federal district court for the Southern District of Texas granted summary judgment to the U.S. Army Corps of Engineers and the owner of a crude export terminal on the Gulf Coast in a lawsuit challenging the Corps’ issuance of an amended permit to facilitate expansion of the terminal. The court rejected the claims by two Tribes and a local association that the Corps violated NEPA and the Clean Water Act, including by failing to analyze climate change and its impacts. The court first declined to permit extra-record evidence, including a 2018 climate assessment from the U.S. Global Change Research Program, of which the plaintiffs asked the court to take judicial notice for purposes of background information. On the merits of the plaintiffs’ argument regarding consideration of climate change, the court agreed with the defendants that the Corps did not have to consider the terminal’s downstream operational effects, but instead could limits its analysis to the specific activity requiring a Corps permit. Based on this scope of impacts, the court found that the Corps satisfied NEPA’s hard look standard when it considered the greenhouse gas emissions from construction activities and found them to be minimal. The court also rejected the plaintiffs’ argument that the Corps’ public interest review overlooked climate change in violation of the Clean Water Act. The Corps found that the review was well reasoned and met Clean Water Act requirements. Indigenous Peoples of the Coastal Bend v. U.S. Army Corps of Engineers, No. 2:21-cv-00161 (S.D. Tex. July 27, 2023)
Stay of Discovery Denied in Climate Adaptation Citizen Suit Concerning New Haven Terminal
On July 24, 2023, a magistrate judge in the federal district court for the District of Connecticut denied Shell Oil Co. and other defendants’ motion to stay discovery until the court decides the defendants’ motion for partial summary judgment dismissing nine Clean Water Act claims in Conservation Law Foundation’s (CLF’s) citizen suit alleging that the defendants violated federal environmental laws by failing to prepare a bulk storage and fuel terminal in New Haven, Connecticut for the effects of climate change. In the motion for partial summary judgment, the defendants argued that the nine claims were premised on “an erroneous assertion” that the facility’s stormwater discharge permit “imposes a vague requirement that permittees must ‘consider’ risks associated with a litany of climate change and weather-related factors.” The magistrate weighed the three factors typically considered in determinations of whether to stay discovery and concluded that the defendants did not meet their burden of showing that a stay was appropriate, given that the defendants would not be subjected to undue burdens in the absence of a stay since “agreed-upon” discovery was complete and “contested” discovery was awaiting the court’s decision on other motions and given that a stay would be prejudicial to CLF. The magistrate found that the third factor—whether the defendant made a strong showing that the plaintiff’s claim was unmeritorious—was “neutral at best.” On August 22, 2023, the magistrate judge granted in part and denied in part CLF’s January 2023 motion to compel compliance with 75 requests interrogatories and requests for production. The magistrate judge generally agreed with CLF that the defendants’ knowledge of climate change risks was relevant but found that many of the requests seeking information on this topic were “grossly overbroad, unduly burdensome, and disproportionate.” Conservation Law Foundation v. Shell Oil Co., No. 3:21-cv-00933 (D. Conn. Aug. 22, 2023 and July 24, 2023)
Federal Court Rejected Environmental Challenges to San Juan Harbor Dredging Project
The federal district court for the District of Columbia rejected claims that the U.S. Army Corps of Engineers violated federal environmental laws when it approved a project to dredge shipping channels in San Juan Harbor and dispose of the dredged materials in an ocean disposal site. The court’s decision did not explicitly address the plaintiffs’ allegations that the project would increase imports of liquefied natural gas (LNG), leading to emissions that would worsen climate change. The decision did, however, reject the argument that the Corps should have considered potential new LNG infrastructure as a “connected action.” The court also found that the Corps considered the impacts of the possibility that Puerto Rico would convert to LNG and reasonably concluded that such a conversion would result in lower air emissions. El Puente v. U.S. Army Corps of Engineers, No. 1:22-cv-02430 (D.D.C. July 24, 2023)
Vermont Supreme Court Said Attorney General Could Withhold Communications About Climate Litigation Common Interest Agreements, Reversed Trial Court’s Award of Attorney Fees to Plaintiff
The Vermont Supreme Court affirmed a trial court’s determination that communications between the Vermont Attorney General’s Office and other state attorneys general were shielded from disclosure under Vermont’s Public Records Act (PRA). The plaintiff had filed PRA requests seeking common interest agreements between the Vermont Attorney General’s Office and the other state attorneys general that mentioned carbon dioxide, greenhouse gas emissions, or national ambient air quality standards, as well as related communications. The trial court ordered the Attorney General’s Office to produce the seven common interest agreements but concluded that the work-product doctrine shielded communications and other documents from disclosure. The Supreme Court agreed, rejecting the plaintiff’s contention that ongoing litigation was required for the work-product doctrine to apply. The Supreme Court also concluded that the Attorney General’s Office did not waive the doctrine’s protection by sharing documents and communications with other attorneys general. The Supreme Court found that the documents were shared “in an effort to unify … strategy and conserve resources with regard to environmental litigation that the [Attorney General’s Office] has considered pursuing or predicted defending against.” The Supreme Court also found that the trial court should not have awarded the plaintiff attorney fees because the plaintiff had not substantially prevailed in the proceeding that consolidated four underlying lawsuits. Energy Policy Advocates v. Attorney General’s Office, No. 22-AP-202 (Vt. Aug. 4, 2023)
California Attorney General and SoCalGas Settled Claims Regarding Misleading Statements About Renewable Natural Gas
California Attorney General Rob Bonta and Southern California Gas Company (SoCalGas) agreed to a consent judgment to resolve claims that SoCalGas misled consumers with statements that its natural gas was “renewable.” The Attorney General alleged that while SoCalGas had set targets to increase the proportion of renewable natural gas (RNG)—biomethane derived from landfills and dairy operations—in its portfolio, the “vast majority” of the company’s natural gas was not renewable. The Attorney General asserted that SoCalGas’s statements violated California’s Unfair Competition Law and Environmental Marketing Claims Act. The consent judgment permanently enjoined SoCalGas from stating or implying that its natural gas is “renewable” unless the statements comply with the FTC Green Guides. SoCalGas also must publish a statement on its website for at least 12 months that, among other things, describes the percentage of its natural gas deliveries that is RNG. SoCalGas also must pay an $87,500 civil penalty and pay an additional $87,500 that is to be disbursed to the California Environmental Protection Agency’s Environmental Justice Small Grants Program. People v. Southern California Gas Co., No. 23CV040344 (Cal. Super. Ct. Aug. 11, 2023)
New Jersey Court Rejected Challenge to Denial of Petition Seeking Regulations to Achieve Statutory Greenhouse Gas Emission Reduction Mandate
The Appellate Division of the New Jersey Superior Court affirmed the New Jersey Department of Environmental Protection’s (NJDEP’s) denial of a rulemaking petition requesting that NJDEP adopt regulations setting a greenhouse gas reduction target for 2030 and establishing measures to achieve the target and regulations restricting issuance of permits for fossil fuel infrastructure projects and stopping public forest logging programs. The court held that the Global Warming Response Act (GWRA) granted NJDEP the discretion to determine whether interim benchmarks were necessary to achieve the GWRA’s 2050 limit for greenhouse gas emissions (80% below 2006 levels). The court declined to second-guess NJDEP’s expert judgment that rules establishing interim benchmarks were not necessary. The court also found both that the petitioners did not demonstrate that the requested rules limiting fossil fuel projects and logging programs were necessary and that the record supported NJDEP’s claims that it was implementing measures to achieve the GWRA’s 2050 limit. EmpowerNJ v. Department of Environmental Protection, No. A-1461-21 (N.J. Sup. Ct. App. Div. Aug. 7, 2023)
Industrial Greenhouse Gas Suppliers Agreed to Penalties for Alleged Reporting Violations
In three administrative penalty assessment proceedings for alleged violations of the mandatory greenhouse gas reporting requirements, the EPA Environmental Appeals Board issued final orders directing respondents to comply with the terms of consent agreements. An industrial greenhouse gas supplier (Nature Gas) was required to pay a civil penalty of $84,546 for failure to file timely annual reports for 2019 and 2020. A second industrial greenhouse gas supplier (Combs Investment Property) was required to pay a civil penalty of $241,562 for failure to file timely annual reports for 2016 through 2019. A third industrial greenhouse gas supplier (Waysmos) was required to pay a civil penalty of $209,000 for failure to file timely annual reports for 2017 through 2020. In re Combs Investment Property, LP, No. CAA-HQ-2023-8431 (EAB Aug. 8, 2023); In re Waysmos USA, Inc., No. CAA-HQ-2022-8427 (EAB Aug. 9, 2023); In re Nature Gas Import & Export Inc., No. CAA-HQ-2023-8430 (EAB June 23, 2023)
NEW CASES, MOTIONS, AND OTHER FILINGS
Certiorari Petition Asked Supreme Court to Review Eighth Circuit Remand of Minnesota’s Climate Case Against Fossil Fuel Industry Defendants
Fossil fuel industry defendants filed a petition for writ of certiorari seeking Supreme Court review of the Eighth Circuit’s affirmance of the remand to state court of the State of Minnesota’s lawsuit alleging that the defendants caused a “climate-change crisis” in the state through a “campaign of deception.” The petition presents the question of whether a federal district court has removal jurisdiction based on federal question jurisdiction “over putative state-law claims seeking redress for injuries allegedly caused by the effect of interstate greenhouse-gas emissions on the global climate.” The defendants contended that the Eighth Circuit’s decision was incorrect and that it implicated “two circuit conflicts on important and recurring issues of federal law”: (1) whether the well-pleaded complaint rule precludes removal jurisdiction over claims necessarily and exclusively governed by federal common law but labeled as state-law claims and (2) “whether federal law necessarily and exclusively governs claims seeking redress for the alleged effect of interstate greenhouse-gas emissions on the global climate.” The defendants acknowledged that the Court had recently declined review of these issues but argued that the Court’s intervention “has only become more pressing” because “similar cases will continue to proliferate, and similar claims could be brought against members of any number of industries that plaintiffs believe have contributed to climate change.” American Petroleum Institute v. Minnesota, No. 23-168 (U.S. Aug. 18, 2023)
Other developments in state and local government climate cases against fossil fuel companies included the following:
- On August 17, 2023, the Hawai‘i Supreme Court heard oral argument in fossil fuel companies’ appeal of the denial of their motions to dismiss the City and County of Honolulu’s action seeking to hold the companies liable for an alleged “multi-decadal campaign of deception and disinformation that succeeded in delaying the transition to a lower carbon economy that … could have avoided the worst” of climate change-related effects. City & County of Honolulu v. Sunoco, No. SCAP-22-0000429 (Haw. Aug. 17, 2023)
- On August 4, a Maryland trial court held a status conference in Baltimore’s climate case against fossil fuel companies. The Daily Record reported that the judge said she would allow the companies to re-brief motions and would decide later whether new motions can be filed. Mayor & City Council of Baltimore v. BP p.l.c., No. 24-C-18-004219 (Md. Cir. Ct. Aug. 4, 2023)
Minnesota Automobile Dealers Sought Supreme Court Review on States’ Eligibility to Adopt California Vehicle Standards
The Minnesota Automobile Dealers Association filed a petition for writ of certiorari seeking review of a Minnesota appellate court’s decision upholding a Minnesota Pollution Control Agency rule that adopted California vehicle greenhouse gas emissions standards pursuant to Section 177 of the Clean Air Act. The petition presented the question of whether Minnesota qualifies to adopt California’s vehicle emission standards pursuant to Section 177 when there are no areas in Minnesota which fail to satisfy the National Ambient Air Quality Standards. The petition argues that states “cannot use outdated technical nonattainment designations (or maintenance plans) having nothing to do with motor-vehicle emissions to justify adopting California’s motor-vehicle emissions rules.” Minnesota Automobile Dealers Association v. Minnesota Pollution Control Agency, No. 23-143 (U.S. Aug. 14, 2023)
Environmental Groups Challenged FERC Approval for Natural Gas Pipelines to Louisiana LNG Terminal
Healthy Gulf and Sierra Club filed a petition for review in the D.C. Circuit Court of Appeals challenging the Federal Energy Regulatory Commission’s (FERC’s) issuance of a certificate of public convenience and necessity for construction and operation of two interstate natural gas pipelines in Louisiana. The pipelines would terminate at a liquefied natural gas (LNG) terminal (the Driftwood LNG terminal). In a press release, Sierra Club said FERC failed to adequately consider the project’s direct and indirect impacts on greenhouse gas emissions, air pollution, wetlands, species, and environmental justice communities. Healthy Gulf v. Federal Energy Regulatory Commission, No. 23-1226 (D.C. Cir., filed Aug. 21, 2023)
Second Lawsuit Filed Challenging New Authorizations for Rio Grande LNG Terminal and Rio Bravo Pipeline Project
A nonprofit association “dedicated to protecting and improving the health, standard of living, and economic development of the coastal community in the Rio Grande Valley of South Texas” filed a petition for review in the D.C. Circuit Court of Appeals challenging new authorizations for an LNG terminal and pipeline project in Texas (the Rio Grande LNG terminal and Rio Bravo Pipeline Project). FERC granted the new approvals on remand from a 2021 D.C. Circuit decision that directed FERC to take additional analysis under NEPA and the Natural Gas Act, including by explaining whether the NEPA regulations require application of the social cost of carbon or similar framework. On remand, FERC disclosed, “[f]or informational purposes,” FERC staff’s estimate of the social cost of greenhouse gases associated with emissions from construction and operation of the facilities, but FERC said that because there were no accepted tools or methods for determining significance of the emissions, it would not characterize the emissions as significant or insignificant. The nonprofit association’s lawsuit was consolidated with a lawsuit filed in July by the City of Port Isabel, Texas; the Carrizo Comecrudo Tribe of Texas; and Sierra Club. Vecinos para el Bienestar de la Comunidad Costera v. Federal Energy Regulatory Commission, No. 23-1221 (D.C. Cir., filed Aug. 17, 2023)
Oral Arguments Scheduled for September in Challenges to Vehicle Greenhouse Gas Emission Standards and California Waiver
On September 14, 2023, the D.C. Circuit Court of Appeals will hear oral argument in challenges to EPA’s greenhouse gas emissions standards for light-duty vehicles for 2023 and later model years and the National Highway Traffic Safety Administration’s (NHTSA’s) fuel economy standards for model years 2024-2026. The oral argument regarding the EPA standards will focus on whether petitioners’ arguments are properly before the court, whether EPA’s rule is authorized under Section 202 of the Clean Air Act, and whether EPA’s rule is arbitrary and capricious. The oral argument regarding the fuel economy standards will focus on Energy Policy and Conservation Act preemption issues and arguments that NHTSA improperly considered factors such as the fuel economy of electric vehicles and plug-in hybrid vehicles. A portion of the argument will also address issues regarding NHTSA’s treatment of high-compression-ratio Atkinson-enabled engines. Texas v. EPA, No. 22-1031 (D.C. Cir.); Natural Resources Defense Council v. National Highway Traffic Safety Administration, No. 22-1080 (D.C. Cir)
On September 15, the D.C. Circuit will hear oral arguments in challenges to EPA’s reinstatement of the waiver allowing California to regulate greenhouse gas emissions from motor vehicles. Oral arguments will feature counsel for private petitioners, state petitioners, EPA, and California and focus on standing and zone of interests, Clean Air Act authority and reconsideration authority, equal sovereignty, and Energy Policy and Conservation Act issues. Ohio v. EPA, No. 22-1081 (D.C. Cir.)
Environmental Groups Challenged Approval of LNG Exports from Alaska Facility
Center for Biological Diversity and Sierra Club filed a petition for review in the D.C. Circuit Court of Appeals challenging the U.S. Department of Energy’s (DOE’s) April 2023 order approving exports of liquefied natural gas from the Alaska LNG Project and a DOE order denying rehearing of the April 2023 order. In a press release announcing the lawsuit, an attorney for one of the petitioner organizations said that “[t]his expensive, climate-polluting project is not in the public interest—it is a boondoggle that would undermine the Biden administration’s climate goals and needlessly lay waste to Alaska’s lands and waters, imperiling communities and threatening wildlife.” The petitioners’ request for rehearing contended that the following errors related to climate change impacts were present in the supplemental environmental impact statement (SEIS) and April 2023 order: (1) the determination that the Alaska LNG Project’s exports were consistent with the public interest was arbitrary and capricious and violated the Natural Gas Act because DOE used “alleged uncertainties … to justify discounting the Project’s climate harms” while ignoring the alleged uncertainties in accounting for the Project’s benefits; DOE overstated the degree of uncertainty about adverse impacts to the climate; and DOE could not ignore the Project’s adverse climate impacts even if the Project substituted for foreign fossil fuels; and (2) the SEIS violated NEPA because it did not comply with NEPA regulations regarding missing information; it made unsupported assumptions about byproduct carbon dioxide injection; it did not adequately address impacts from proposed carbon storage; it did not adequately address methane leakage; and the analysis of overseas impacts was inadequate. Center for Biological Diversity v. U.S. Department of Energy, No. 23-1214 (D.C. Cir., filed Aug. 11, 2023)
Environmental Groups, Louisiana, Trade Association, and Energy Company Challenged BOEM Decision on Gulf of Mexico Lease Sale
Lawsuits were filed in federal district court in the District of Columbia and Louisiana challenging the U.S. Department of the Interior’s decision to hold Gulf of Mexico Oil and Gas Lease Sale 261. In the District of Columbia, five environmental groups asserted that the lease sale decision violated NEPA and the Administrative Procedure Act. Their allegations included that the Bureau of Ocean Energy Management’s climate change analysis “relied on problematic modeling and assumptions that both underestimated the emissions resulting from Lease Sale 261 and overestimated emissions from the no leasing alternative.” The plaintiffs also alleged that BOEM’s analysis of the significance of greenhouse gas emissions should have considered “relevant climate action goals and commitments.” They also alleged that BOEM failed to consider the climate impacts of the lease sale and other oil and gas activities in the Gulf of Mexico on Gulf communities.
In Louisiana, the State of Louisiana, American Petroleum Institute, and Chevron U.S.A. Inc. alleged that BOEM had made “arbitrary and unlawful last-minute changes” to the terms of Lease Sale 261 by enlarging an area for protection of the endangered Rice’s whale and withdrawing the entirety of that area from the lease sale. The Louisiana plaintiffs alleged that the decision violated the Inflation Reduction Act, which they alleged directed BOEM to conduct the lease sale in accordance with BOEM’s adopted five-year plan. They also asserted violations of the Outer Continental Shelf Lands Act and the Administrative Procedure Act. Healthy Gulf v. Haaland, No. 1:23-cv-02487 (D.D.C., filed Aug. 25, 2023); Louisiana v. Haaland, No. 2:23-cv-01157 (W.D. La., filed Aug. 24, 2023)
Lawsuit Challenged Denial of Endangered Species Act Protection for Gopher Tortoise
Center for Biological Diversity and Nokuse Education, Inc. filed a lawsuit in the federal district court for the Middle District of Florida challenging the U.S. Fish and Wildlife Service’s decision not to list the gopher tortoise as endangered or threatened under the Endangered Species Act. The plaintiffs alleged that the gopher tortoise is a keystone species whose habitats are threatened by “encroaching development, poor habitat management, and climate change.” The allegations included that “[s]ea level rise driven by climate change will directly destroy (inundate with water) and degrade coastal gopher tortoise habitat while forcing human migration to inland and upland areas where gopher tortoises live, displacing the tortoises from their already diminishing habitat.” The complaint asserted that the decision not to list the tortoise violated the Endangered Species Act and the Administrative Procedure Act. Center for Biological Diversity v. U.S. Fish & Wildlife Service, No. 3:23-cv-00936 (M.D. Fla., filed Aug. 9, 2023)
Carbon Dioxide Pipeline Developer Challenged Iowa County Ordinance
A developer of an interstate carbon dioxide pipeline (the Heartland Greenway Pipeline System) and related facilities filed a lawsuit in federal court in Iowa challenging a May 2023 ordinance passed by Story County, Iowa, that imposes setback requirements limiting the pipeline’s route. The ordinance also imposes other requirements, including specific methods of construction, submission of an emergency response plan, and a discretionary permit requirement. The developer asserted that federal and state law preempted the County’s ordinance and that the ordinance violated the developer’s rights under the Fourteenth Amendment and the Iowa Constitution. The complaint cited the court’s July 2023 decision granting a preliminary injunction barring enforcement of a similar ordinance in another Iowa county. In a separate lawsuit that originally focused on a 2022 ordinance passed by the same county, the developer of another carbon dioxide pipeline project and an ethanol facility owner filed an amended complaint challenging the May 2023 ordinance, also on preemption grounds. Navigator Heartland Greenway LLC v. Story County, No. 4:23-cv-00272 (S.D. Iowa, filed July 28, 2023); Couser v. Story County, No. 4:22-cv-00383 (S.D. Iowa Aug. 2, 2023)
Lawsuit Asked Court to Stop Livestock Grazing in Coronado National Forest to Protect Climate Change-Threatened Species
Center for Biological Diversity and Maricopa Audubon Society filed a lawsuit in federal district court in Arizona seeking to block the U.S. Forest Service’s authorization of livestock grazing in the Coronado National Forest. The plaintiffs alleged that the U.S. Fish and Wildlife Service and the Forest Service violated the Endangered Species Act by failing to ensure that their actions would not jeopardize the continued existence of the threatened Yellow-billed cuckoo and Sonora chub or adversely modify the species’ critical habitats. The plaintiffs’ arguments included that the federal agencies failed to rely on best available scientific evidence “demonstrating the severity of climate change as a baseline threat to the survival and recovery of these species.” They asked the court to declare that the agencies had violated the Endangered Species Act and Administrative Procedure Act, to enjoin the Forest Service from authorizing grazing in occupied habitat for the cuckoo and chub, and to set aside active grazing authorizations in such areas, as well as the biological opinion upon which the authorizations relied. Center for Biological Diversity v. Moore, No. 4:23-cv-00354 (D. Ariz., filed July 28, 2023)
Center for Biological Diversity Challenged Denial of Petition for Regulations Protecting Threatened Coral Species
Center for Biological Diversity (CBD) filed a complaint in the federal district court for the District of Hawai‘i challenging the National Marine Fisheries Service’s (NMFS’s) May 2021 denial of CBD’s petition requesting that NMFS adopt regulations to protect 20 species of coral listed as threatened in 2009. The petition requested that NMFS promulgate regulations to ban imports and sale of listed coral and to address climate change and localized threats. The complaint alleged that NMFS had identified the “most important” threats to the species as related to climate change, including ocean warming, disease, and ocean acidification, and that NMFS had acknowledged that the coral species would not recover without “concerted conservation efforts with regards to both climate change and collection and trade.” CBD asserted that NMFS’s denial of its petition was arbitrary, capricious, and not in accordance with law. Center for Biological Diversity v. National Marine Fisheries Service, No. 1:23-cv-00306 (D. Haw., filed July 26, 2023)
NEPA Lawsuit Challenged Forest Service’s Review of Roadside Hazard Tree Project in California
Environmental groups challenged the U.S. Forest Service’s authorization of a roadside hazard tree project covering nine national forests in California. They alleged that the Forest Service failed to comply with NEPA when it approved the project, which would be “one of the largest, if not the largest, logging/vegetation management projects ever proposed in California’s history,” covering more than 400,000 acres. They alleged, among other things, that the Forest Service failed to properly analyze and disclose the project’s impacts on climate change and carbon storage. Klamath Forest Alliance v. U.S. Forest Service, No. 3:23-cv-03601 (N.D. Cal., filed July 20, 2023)
Endangered Species Act Lawsuit Challenged Project to Relocate Marines from Okinawa to Guam
Center for Biological Diversity and a Guam-based nonprofit organization with a mission to protect natural and cultural resources filed a lawsuit in the federal district court for the District of Guam challenging the U.S. Department of the Navy’s (Navy’s) project to relocate 5,000 marines and their dependents from Okinawa, Japan to Guam. The plaintiffs asserted that the Navy and U.S. Fish and Wildlife Service violated the Endangered Species Act and Administrative Procedure Act by failing to take required steps to protect 15 species listed as endangered or threatened. The plaintiffs alleged, among other things, that the Navy was obligated to reinitiate formal consultation under the Endangered Species Act both because there had been a delay in implementing agreed-upon conservation measures and also because of new information regarding new or increased threats, including an expected 100% increase in intense storms due to climate change that would threaten limestone forests that serve as habitat for listed species. CBD also asserted a claim under the Freedom of Information Act. Center for Biological Diversity v. U.S. Department of the Navy, No. 1:23-cv-00019 (D. Guam, filed July 18, 2023)
Greenwashing Lawsuit Against KLM Alleged Misrepresentations Regarding Emissions Reduction Commitments and Actions
A class action lawsuit filed in the federal district court for the Eastern District of Virginia alleged that the operator of KLM Royal Dutch Airlines (KLM) misled the plaintiff and other consumers with “words, promises, commitments, plans, and pictures … about its efforts to limit the effect of climate change.” The allegedly misleading actions included KLM’s commitment to reduce emissions by 12% below 2019 levels by 2030, enticements for customers to “offset” and “reduce” environmental impacts through KLM’s CO2ZERO program, KLM’s focus on sustainable aviation fuels (SAF), and emission reduction projections based on a “well below 2°C scenario.” The plaintiff alleged that carbon offsets and credits would not negate the impacts of flying, that SAF would have “a negligible effect on reducing CO2 emissions from flying,” and that KLM’s emissions reduction targets were not consistent with the Paris Agreement, CO2ZERO, or carbon neutrality. The plaintiff alleged breach of contract and unjust enrichment claims, as well as a claim under the Virginia Consumer Protection Act of 1977. KLM filed a motion to transfer the lawsuit to the Southern District of New York. Long v. Koninklijke Luchtvaart Maatschappij, N.V., No. 3:23-cv-00435 (E.D. Va., filed July 7, 2023)
Groups Filed Environmental Rights Amendment Challenge to Pennsylvania Law Freezing Oil and Gas Well Bonding Amounts
Environmental groups filed a petition for review in Pennsylvania Commonwealth Court challenging a 2022 law that “froze” bonding amounts for oil and gas wells “at their current inadequate level.” The groups alleged that the law would prevent remediation of non-producing wells, allowing them to emit pollutants—including the potent greenhouse gas methane—to the air and water. They asked the court to declare that the law violated the trust obligations and right to a clean and healthy environment guaranteed by the Pennsylvania Constitution’s Environmental Rights Amendment. Clean Air Council v. Commonwealth of Pennsylvania, No. 379 MD 2023 (Pa. Commw. Ct., filed Aug. 23, 2023)
Lawsuit Challenged Virginia’s Withdrawal from Regional Greenhouse Gas Initiative
Four petitioners challenged a Virginia State Air Pollution Control Board (Board) rule that withdrew Virginia from the Regional Greenhouse Gas Initiative (RGGI), a regional cap-and-trade program that reduces carbon dioxide emissions from power plants. The petitioners were a trade association for energy conservation professionals, a nonprofit corporation with a mission “to reduce reliance on fossil fuels and transition to a clean energy economy in a way that is beneficial and fair to Appalachian communities,” “a not-for-profit corporation comprised of congregations and persons involved in faith communities across Virginia” with a mission to “advocate for solutions to climate change with a key focus on environmental and social justice,” and a nonprofit corporation composed of “over 200 faith communities and over 2,800 people of faith” whose mission includes “develop[ing] local solutions to the climate crisis by sounding an ethical and spiritual call to address climate change.” The petitioners asserted that the Board and other respondents exceeded their delegated authority under the “2020 RGGI Act” (the Clean Energy and Community Flood Preparedness Act), which the petitioners alleged required Virginia’s participation in RGGI. In addition, they argued that the respondents exceeded their statutory authority and contravened state law by justifying the withdrawal from RGGI as necessary to reduce utility costs. They also contended that the respondents acted without sufficient evidentiary support in violation of the Virginia Administrative Process Act. Association of Energy Conservation Professionals v. Virginia State Air Pollution Control Board, No. 2023 12061 (Va. Cir. Ct., filed Aug. 21, 2023)
Lawsuit Sought Disclosure of Terms of New Jersey Attorney General’s Agreement with Outside Counsel in Climate Lawsuit
An organization that submitted a New Jersey Open Public Records Act request to the New Jersey Office of the Attorney General filed a lawsuit seeking to compel production of unredacted copies of an agreement between the Attorney General and an outside law firm related to the law firm’s representation of the Attorney General in New Jersey’s climate change lawsuit against fossil fuel industry defendants. The organization asserted that the redactions were not appropriate and that the public had a right to know the terms of the agreement because the “promise of payment [to the law firm] is made in the name of protecting the public fisc, as is the case in defendants’ ‘climate’ lawsuit.” Government Accountability & Oversight v. Division of Law & Public Safety, Office of the Attorney General, No. L-001396-23 (N.J. Super. Ct., filed July 21, 2023)
Environmental Groups Challenged Louisiana Authorization for Gas Pipeline Project
Two environmental groups filed a lawsuit in Louisiana District Court challenging a Coastal Use Permit granted by the Louisiana Department of Natural Resources’ Office of Coastal Management for a methane pipeline and compressor station system (the Evangeline Pass Project) that would feed a liquefaction and export facility. The groups’ arguments included that Louisiana’s Coastal Resources Management Act and its regulations required consideration of cumulative impacts, including impacts “from the project’s destruction of more than 300 acres of wetlands that would protect St. Bernard Parish from storm surges and flooding” and “from the project’s cumulative emissions and related increases in storm severity and sea level rise.” The groups contended that the failures to comply with the Coastal Resources Management Act and its regulations also constituted failures to meet public trustee obligations under the Louisiana Constitution. Healthy Gulf v. Secretary, Louisiana Department of Natural Resources, No. 23-0764 (La. Dist. Ct., filed June 21, 2023)
HERE ARE RECENT ADDITIONS TO THE GLOBAL CLIMATE LITIGATION CHART
Korean National Human Rights Commission Ruled Carbon Neutrality Act Unconstitutional
In South Korea, four constitutional complaints have been filed challenging the constitutionality of the Framework Act on Carbon Neutrality and Green Growth for Coping with Climate Crisis (Carbon Neutrality Act). These complaints claimed that the Nationally Determined Contributions (NDCs) set by Article 8(1) of the Carbon Neutrality Act and Article 3(1) of its Enforcement Decree is insufficient to achieve the Paris Agreement climate goals and therefore fails to provide necessary protection of the plaintiffs’ constitutional rights. The National Human Rights Commission (NHRC), the independent body of the Korean Government on human rights matters, in consideration of the significance of these cases, decided to submit an opinion to the Constitutional Court on the human rights impact of climate change and the issue of unconstitutionality of the disputed clauses.
The NHRC submitted the following opinion to the Constitutional Court: “Article 8(1) of the Carbon Neutrality Act and Article 3(1) of the Enforcement Decree of the Carbon Neutrality Act are unconstitutional because they violate the state’s duty to protect fundamental rights, the principle of non-blanket delegation, the principle of parliamentary reservation, and the principle of equality by failing to implement minimum protection measures for the freedoms and rights of current and future generations that are violated by the effects of climate change.” The NHRC opined that legal prerequisites of constitutional complaints—the possibility of violation and present, own, and direct concern—were met.
South Korea’s carbon budget is expected to be exhausted before 2030, forcing future generations to reduce their GHG emissions drastically. Climate change affects freedom in all aspects of human life, a fundamental right that present and future generations must share. Shifting the burden unequally to future generations is discriminatory treatment without a rational basis and violates the constitutional principle of equality. The Constitution does not explicitly prescribe the state’s obligation to reduce GHG. However, constitutional interpretation can derive a state’s obligation to protect and ensure the safety of its citizens from disasters and danger caused by climate change. The law only sets a lower limit of 35% reduction from the 2018 level by 2030, which falls far short of the internationally agreed targets and fails to provide sufficient protection between 2031 and 2050. Therefore, the state has failed to provide minimum measures to protect the petitioners’ fundamental rights.
Article 8(1) of the Carbon Neutrality Act sets a lower limit of 35% reduction from the 2018 level by 2030. Article 3(1) of its Enforcement Decree sets a reduction target of 40% from the 2018 level by 2030, and both targets fall short of the global reduction pathway presented by the IPCC. This means the law does not provide any meaningful standard for establishing an effective NDC. Further, the law not only fails to provide any guidance on how the reduction pathway should be drawn up to 2030 but also is entirely silent on the reduction plan from 2031 to 2050. Thus, the law violated the principle of non-blanket delegation and the principle of parliamentary reservation. Opinion of the National Human Rights Commission on the Constitutional Complaints on Constitutionality of Carbon Neutrality Act (National Human Rights Commission, South Korea)
DECISIONS & SETTLEMENTS
Austrian Court Ruled that Climate-Damaging Tax Benefits for Aviation Companies Cannot Be Contested by Those Not Using These Companies’ Services
In a decision of September 30, 2020, the Austrian Constitutional Court held that climate-damaging tax benefits for aviation companies cannot be contested by persons who do not use the services of these companies for environmental reasons. The corresponding application thus was deemed inadmissible. On February 23, 2022, a previously uninvolved applicant—a consumer using rail and air services—resubmitted the application. The applicant has been diagnosed with multiple sclerosis and suffers from the related Uthoff syndrome, which exacerbate in case of higher temperatures. At temperatures of 25°C, the applicant’s ability to walk is limited; at temperatures of 30°C, the applicant depends on a wheelchair and assistance from others. As a result of climate change, the number of warm and hot days in Austria steadily increased; the average temperature in Austria has already risen by 1.8°C (compared to the global average of 1°C). Thus, Austria is particularly affected by the climate crisis. Nevertheless, it further aggravates the climate crisis: Austrian tax law provides that the domestic part of cross-border passenger transportation by aviation companies is exempt from the turnover tax. Furthermore, paraffin—the fuel for air travel—is exempt from the mineral oil tax. On the other hand, passenger transportation by rail companies is not exempt from the turnover tax even though GHG emissions associated with a rail journey are, on average, 31 times lower than when traveling the same distance by airplane.
Against this background, the applicant alleged the unconstitutionality of relevant tax provisions in the Federal Turnover Tax Act and the Mineral Oil Tax Act for violating her fundamental rights. In concrete terms, the applicant alleged a violation of her right to equality before the law, her right to life, and her right to private and family life. The right to equality before the law conveys a right to equal treatment—differentiations are only justified when they result from differences in facts. According to the applicant, trains and airplanes are—at least in Europe and Austria, where the high-speed rail network is well developed—equivalent means of transport as total travel time is similar. Differences only occur concerning associated emissions which are drastically higher when traveling by plane. Tax benefits for aviation thus lead to unequal treatment of equivalent means of transport that stand in direct competition. As a result of tax benefits for aviation, end consumers who travel by rail have to pay 10% more for their tickets for an identical route at an identical price per kilometer than if they were to fly. This unequal treatment is not objectively justified. It contradicts Austria’s obligations under international and European law to mitigate the climate crisis, increasing GHG emissions and promoting climate-damaging behavior. Therefore, the applicant asserted a violation of her right to equality before the law.
The applicant further alleged a violation of her right to life. The right to life, as enshrined in Art 2 ECHR and Art 2 CFR, entails positive obligations—the state must adopt measures that prevent (foreseeable) threats to life. Climate change threatens human life directly and indirectly, for example, by destroying ecosystems. The Austrian state, thus, is under a positive obligation to adopt measures to prevent threats to life from climate change. However, the state not only disregards this obligation but also encourages climate-damaging behavior by granting tax benefits to aviation. Due to the lack of justification, the applicant asserts a violation of her right to life.
Positive obligations also arise from the right to respect for private and family life according to Art 8 ECHR and Art 7 CFR. The Austrian state must protect health, physical and mental well-being, and bodily integrity from environmental hazards, including climate change. Climate change leads to an increased occurrence of extreme weather events, such as heat waves, floods, or hurricanes, which negatively impact human health. This is particularly evident in the case of the applicant who, due to the increasing number of warm and hot days caused by climate change, is more frequently dependent on a wheelchair and assistance or forced to live isolated in cooled indoor areas. The applicant thus alleged that the Austrian state violates its positive obligations under Art 8 ECHR and Art 7 CFR by promoting climate-damaging behavior through tax benefits. The applicants demanded that the Constitutional Court repeal the relevant provisions of the Federal Turnover Tax Act and the Mineral Oil Tax Act as unconstitutional. In addition, she asked the Constitutional Court to initiate preliminary ruling proceedings at the European Court of Justice to clarify whether Art 37 CFR constitutes a fundamental right, a principle, or a European objective.
On June 27, 2023, the Constitutional Court dismissed the application as inadmissible. As of January 1, 2023, the Turnover Tax Act had been amended to exempt not only aviation but also cross-border rail transport from the turnover tax. The applicants lacked standing since the originally contested provision was no longer in force. The court further held that the obligation to pay turnover taxes was directed at businesses and that consumers were, therefore, excluded from challenging respective provisions. The same applies in connection with the mineral oil tax: since it is not payable by consumers, they are not affected in their legal sphere and, thus, are not entitled to challenge tax provisions. In re Tax Benefits for Aviation (Constitutional Court, Austria)
Austrian Court Dismissed Constitutionality Challenge of the Federal Climate Protection Act
In 2023, the applicant filed a complaint with the Austrian Constitutional Court and alleged that Art 3 of the Federal Climate Protection Act (Klimaschutzgesetz) was unconstitutional for not ensuring Austria’s compliance with international and European greenhouse gas reduction obligations, thereby violating fundamental rights. The Federal Climate Protection Act was adopted in 2011 to implement emission reduction obligations under international and European Law. According to Art 3 para 1 of the Act, the maximum permissible GHG emissions shall be defined in the annexes to the Act and distributed among sectors. The annexes accordingly provide for maximum GHG emissions for 2008-2012 and 2013-2020; the Act does not stipulate any emission reduction targets after 2020. In addition, Art 3 para 2 Federal Climate Protection Act provides a (mere) negotiation obligation regarding measures that ensure compliance with maximum GHG emissions. Also, the Act does not contain a sanction mechanism.
The applicant brought forward that Art 3 Federal Climate Protection Act leads to a shifting of the GHG reduction burden to the future and hinders compliance with international and European emission reduction obligations until 2030. To comply with international and European GHG reduction obligations, Austria would have to adopt drastic measures in the near future. These measures would infringe on fundamental rights as many areas of life and personal freedom are inextricably linked to the emission of greenhouse gases. The applicant accordingly asserted a violation of the right to property, the freedom of occupation, and the right to respect private and family life. In addition, the applicant suggested that the challenged provision was disproportionate for not ensuring compliance with international and European law and, therefore, infringed on the right to equality before the law.
On June 27, 2023, the Constitutional Court rejected the application. The Court held that it was not evident from the application which of the future measures mentioned by the applicant would interfere with which fundamental rights positions. Contrary to procedural provisions, the alleged unconstitutionality was not explained in detail. Hence, the application was deemed inadmissible. In re Federal Climate Protection Act Austria (Constitutional Court, Austria)
Brazilian Mining Company Filed Appeal Against Injunction by Court on Open Pit Coal Project Conducted Without the Participation of Indigenous Communities and Considerations of GHG Emissions
On February 8, 2022, the federal court of Rio Grande do Sul handed down a ruling. The court upheld the requests of the Arayara Association of Education and Culture and the Poty Guarani Indigenous Association to declare the nullity of the Mina Guaíba Project permitting process, ratifying the decision on the injunction. It rejected the preliminary allegations of incompetence of the Federal Court, lack of procedural interest of the plaintiffs, and illegitimacy of FUNAI as a defendant. On the merits, the Court recognized the rights of indigenous communities to participate in decisions that may affect their way of life and culture. It concluded that the project’s permitting process is already at an advanced stage, having carried out an EIA that disregards the existence of an indigenous community and that there was no participation in the discussions. It understood that the mere formal manifestation of FUNAI does not meet the need for hearing from the indigenous community potentially affected by the activity to be authorized. Thus, it accepted the plaintiff’s requests to declare the nullity of the licensing process for the Mina Guaíba project. Copelmi has filed an appeal. Arayara Association of Education and Culture and others v. FUNAI, Copelmi Mineração Ltda. and FEPAM (Mina Guaíba Project and affected indigenous communities) (9th Federal Court of Rio Grande de Sol, Brazil)
Brazilian Court Dismissed Petition Against Federal Order that Changed Regime for Protected Areas in the Atlantic Forest
On May 6, 2020, the Federal Public Prosecutor’s Office (MPF) and two NGOs, SOS Mata Atlântica and ABRAMPA, filed a public civil action (environmental class-action) against the Federal Government, seeking a declaration of nullity of Order 4.410/2020 issued by the Ministry of the Environment (MMA). The plaintiffs claim that the contested Order changed the understanding consolidated in the previous MMA Order 64.773/2017 on the specialty and prevalence of the Atlantic Forest Law (Federal Law 11.428/2006) over the Forest Code (Federal Law 12.651/2012) concerning the protection of the Atlantic Forest biome. It so happens that Order 4.410/2020 imposed guidance on federal public entities to apply the Forest Code, which is a less protective general rule, allowing the consolidation of occupation of protected areas (APP) illegally deforested (until July 22, 2008).
The plaintiffs aimed, among other things, to prevent the cancellation of several environmental infraction notices for deforestation and fires due to the possible consolidation of occupation of APP. They pointed out that the largest source of GHG emissions in the country is deforestation and changes in land use, and that special legislation, such as the National Policy on Climate Change, establishes the duty to preserve, conserve, and restore Brazil’s natural biomes such as the Atlantic Forest. Finally, they request, as an injunction, (i) the suspension of the effects of the contested Order 4.410/2021 and (ii) the reinstatement of the effects of MMA Order 64.773/2017. On the merits, they requested the confirmation of the injunction with (i) a declaration that Order 4.410/2021 is null and void and (ii) an order that the Federal Government refrain from issuing another normative act denying the prevalence of the special legislation of the Atlantic Forest over the Forest Code.
In its defense, the Federal Government argued that the action had lost its object, due to the spontaneous revocation of Order 4.410/2020, and pointed out that the matter had been brought before the Federal Supreme Court (STF), and that it was up to that Court to determine the best interpretation of the issue. Accordingly, it requested that the case be dismissed.
In a judgment based on procedural grounds, the court ruled that the plaintiffs had no interest in acting and dismissed the case without addressing the merits. This decision was upheld on appeal and the case was dismissed. Federal Public Ministry, SOS Mata Atlântica and ABRAMPA v. Federal Union (MMA Order 4.410/2020 and special legislation for the Atlantic Forest) (Federal Civil Court of the State of Paraná, Brazil)
Danish Court Allowed Hearing of Case on Whether “Climate-Friendly” Claims Made by Danish Crown Amount to Misleading Consumers Through Greenwashing
At the end of May 2021, three Danish NGOs filed a suit against Danish Crown, the EU’s largest pork producer, claiming that the company is misleading consumers through its campaign that claims its pork production is “climate controlled” and that the pork is “more climate friendly than you would think.” Danish Crown is a cooperative owned by over 6,000 Danish farmers. It has committed to reducing GHG emissions by 50% by 2030.
According to media reports, the claimants allege that Danish Crown is misrepresenting its climate footprint and is in violation of the Marketing Act, which Danish Crown refutes. It states that because the pigs have “grown up on farms with a clear strategy for reducing CO2 emissions,” Danish Crown is not misleading consumers. In its 2020-2021 Annual Report published in November 2021, Danish Crown mentions the lawsuit and that it is cooperating with authorities.
In January 2022, the court proceedings began in the Western High Court. The court has found that the case is “of a principle nature and has a general signification for the application of and development of the law.” The Danish Crown had argued to have the case heard in the Maritime and Commercial Court, which the court has denied. The case will proceed in the High Court. Vegetarian Society et al. of Denmark v Danish Crown (Western High Court, Denmark)
South African Court Dismissed Application for Review of Environmental Authorization
In June 2021, an environmental justice organization filed a lawsuit challenging the South African government’s approval of offshore oil and gas exploration by Eni South Africa and Sasol. The lawsuit challenges the authorization on several grounds, including the government’s failure to consider the climate impacts resulting from the exploration in its Environmental Impact Assessment (EIA). Plaintiffs allege that this is in violation of the country’s climate change commitments, including those under the Paris Agreement and its environmental assessment laws.
The Court ordered that the application for review of the granting of the environmental authorization and dismissal of the appeal in respect thereof be dismissed. The Respondents were directed to advertise the environmental authorizations and their attached conditions. South Durban Community Environmental Alliance v. Minister of Environment and Others (High Court, South Africa)
Australian Court Allowed Claims on Disclosure of Climate Risks Case to Proceed
On July 22, 2020, Equity Generation Lawyers filed a lawsuit in the Federal Court on behalf of Kathleen (Katta) O’Donnell against the Australian government. The lawsuit alleges that Australia’s economy and reputation in international financial markets will be significantly affected by the adequacy of the Australian government’s response to climate change, and that as a result, investors who trade in Australian government bonds face material risks from climate change that should be disclosed. The lawsuit further alleges that the government has misled or deceived investors and continues to mislead or deceive investors in failing to disclose such risks.
O’Donnell seeks to represent other holders of and investors in Exchange-traded Australian Government Bonds who have the same interest in the proceeding. She seeks declarations that the Commonwealth has breached the law and an injunction to prevent further promotion of bonds without informing investors about climate change risks.
The Australian Government sought to strike out the claim in its entirety at a one-day hearing on July 29, 2021. It argued that the applicant had failed to sufficiently articulate precisely what risks should be disclosed. In the strike-out judgment handed down on October 8, 2021, the Court rejected this argument and refused the Government’s application to disband the class action. The Court permitted the claim of misleading or deceptive conduct to proceed. However, the applicant’s claims with respect to duty of care and against the Commonwealth officials were struck out. O’Donnell v Commonwealth (Federal Court of Australia, Australia)
Australian Court to Hear on Bank’s Compliance with the Paris Agreement
On August 26, 2021, Guy and Kim Abrahams, as trustees for the Abrahams Family Trust, shareholders in the Commonwealth Bank of Australia (CBA), filed an application in the Federal Court of Australia, seeking access to internal documents under the Corporations Act 2001 (Cth). The documents relate to the bank’s reported involvement with several projects, including a gas pipeline in the U.S., a gas project in Queensland, a gas field, and an oil field, among other projects that potentially infringe the bank’s Environmental and Social Framework (E&S Framework) and Environmental and Social Policy (E&S Policy). In particular, the E&S Framework and the E&S Policy require that the bank carries out an assessment of the environmental, social, and economic impacts of the projects and whether the projects are in line with the goals of the Paris Agreement.
On November 4, 2021, the Federal Court of Australia held a hearing to consider proposed consent orders that had been agreed by the parties in previous correspondence. In essence, the proposed consent orders allow the Plaintiffs to inspect a limited scope of the documents sought at the beginning of the proceedings. The plaintiffs’ legal representative made short oral submissions on the evidence before the Court to establish that the plaintiffs were acting in good faith and that inspection was to be made for a proper purpose, as is required by law. CBA made a limited admission to the same effect. Based on the limited admission and the evidence before the Court, the Court was satisfied that the plaintiffs met the good faith and proper purpose requirements and made the consent orders. CBA must now produce the relevant documents to the plaintiffs for inspection in two tranches on December 9, 2021, and February 10, 2022. If the documents provided by CBA under these orders do not sufficiently alleviate the plaintiffs’ concerns as set out in their application, the plaintiffs have reserved their right to apply to the Court for production of the balance of documents sought in the original application. Abrahams v Commonwealth Bank of Australia (Federal Court of Australia, Australia)
Argentine Court Ruled in Favor of Protecting Parana River’s Aquatic Resources
In 2020, a group of individuals and NGOs filed two similar claims against the Province of Santa Fe, challenging its management of fishing activities in the face of a critical lowering of the Paraná River levels. Together with a precautionary measure, the plaintiffs asked the judge to order the Province to elaborate an integral and participative Plan to protect the river basin’s aquatic fauna and fish resources. Although the claim made only a passing reference to climate change to highlight the increasing pressure that the aquatic fauna is suffering and will suffer due to climatic changes, it was the Public Prosecutor who introduced a climate focus to the case.
On May 31, 2021, the Public Prosecution Office intervened in the case as a party, supporting the plaintiffs’ stance and asking for new remedies from the judge. Among other arguments, the Prosecutor observed that the second Argentinean NDC had identified the “extraordinarily low water levels in the rivers” causing problems to “subsistence fishermen” as a climate risk for the Santa Fe region and referred to the IPCC reports and the Paris Agreement to allege the need for public authorities to implement climate adaptation measures, including the need of livelihood diversification of vulnerable groups. According to the Prosecutor, in this case, this was connected to the effective functioning and implementation of two institutional mechanisms: the Provincial Reconversion Council and the Fishery Reconversion and Fishermen’s Assistance Fund. The Prosecutor observed that these two mechanisms, which were not currently functioning, had been created with aims that ‘certainly constitute climate adaptation measures’ to protect vulnerable groups of fishermen in the region. In this sense, the Prosecutor maintained that their “implementation is an urgent tool for a satisfactory solution to the socio-environmental conflict suffered by the fishermen of Santa Fe and the ecosystem of the Paraná River, not only in terms of the current low water levels, but also those that will continue to occur due to climate change.”
On June 22, 2023, the Court decided the case in favor of the plaintiffs and, among other measures, ordered the Province to elaborate an integral, informed, public, and participative “Strategic Plan for the sustainable use of the aquatic resources.” Even though the Court avoided mentioning climate change or climate adaptation in its judgment, it engaged with and sustained the Public Prosecutor’s arguments regarding the need to implement both the Provincial Reconversion Council and the Fishery Reconversion and Fishermen’s Assistance Fund to allow for the “reconversion, adaptation, and diversification of the fishing activity and its social actors, with the clear objective of cushioning the impact that possible situations of closure or restrictions to the activity resulting from environmental crises could have on their economies”.
The Province of Santa Fe has appealed the judgment. Bartoli, Jorge et al v. Santa Fe Province (Civil and Commercial District Court Nº 11 (Rosario), Argentina)
Brazilian Court Dismissed Claim that the Obligation to Acquire Decarbonization Credits Sets the Imposition of a New Tax
On October 26, 2020, Biostratum Distribuidora de Combustíveis S.A. filed a lawsuit with a request for an injunction against the Federal Government seeking the removal of the compulsory target of acquisition of Decarbonisation Credits (CBios) imposed on it, equivalent to 9,959 CBios up to the time the lawsuit was filed. The CBios were instituted by the National Biofuels Policy (Federal Law 13,576/2017)—known as RenovaBio—which, in turn, was enacted because Brazil is a signatory to the Paris Agreement. Renovabio, among other objectives, aims to contribute to the fulfillment of the country’s commitments under the Paris Agreement, promote the expansion of biofuels in the energy matrix, and the reduction of GHG emissions in the production, commercialization, and use of biofuels. To this end, it provides for establishing annual national decarbonization targets for the fuel sector, which are individualized each year for fuel distributors and met by the companies through the purchase of CBios, under penalty of the sanctions provided for in the Law. The annual targets are set by the National Energy Policy Council (CNPE) and individualized by the National Petroleum, Natural Gas, and Biofuels Agency (ANP). The plaintiff company claims that the obligation to purchase CBios constitutes the imposition of a new tax, the Decarbonisation Credit being a residual tax, as it is not foreseen in the Federal Constitution and does not meet the requirements of the National Tax Code (Federal Law 5.172/1966). It claims that, to establish such a tax, the Federal Constitution requires that a Complementary Law be issued and that the tax must be non-cumulative, which is not the case with CBios, implying a formal defect in its establishment. The plaintiff also argues that, as a fuel distributor, it is not responsible for the emission of polluting gases, but only for the commercialization of fossil fuels, and it would be logical for the fuel producer to be the recipient of the compulsory acquisition of CBios. It also claims that fuel distribution is a low-polluting activity. It requests an injunction to suspend its CBio acquisition target. On the merits, it demands the confirmation of the injunction and recognition of the unconstitutionality of the legislation that determines the institution of the compulsory target for the company to purchase CBios.
The request for an injunction was rejected on the main grounds that (i) the constitutional principles for environmental protection set out in the Federal Constitution make it mandatory to reduce the environmental impact of human activities, whether in the production or distribution of fossil fuels; (ii) setting targets for the purchase of CBio is not the creation of a tax rule, but rather an environmental administrative rule, based on constitutional and international legislation for reducing environmental pollution, the harmful effects of which are felt all over the world, such as increased heat and reduced rainfall; (iii) the argument that the distribution company does not pollute is not credible.
In its defense, the Federal Government argues, among other points: (i) that the creation of CBios is in line with environmental rules, acting as a form of incentive for social actors to preserve nature, with the creation of compensatory measures being indispensable for the reduction of GHG emissions and for the effectiveness of RenovaBio; (ii) that CBios are based on the idea of converting the environmental costs of using fossil fuels into revenue for biofuel producers, offering efficiency incentives for their sustainable growth; (iii) that Decarbonisation Credits provide a valuation of the externalities present in the fuel market, generating a competitive balance between fossil fuels and renewables; (iv) that CBios are a market solution without changing taxes; (v) that there is no delay in the disclosure of annual targets; (vi) that there has been sufficient time to acquire CBios and that they are fully available on the market; (vii) that there is no legal tax relationship, especially as this is an obligation to reduce GHG emissions through the acquisition of CBios offered by other private parties, and that there is no pecuniary relationship between the Public Administration and the distributor; and (viii) that it is impossible for distributors to depart from the compulsory annual decarbonisation and CBios acquisition target.
The ruling dismissed the claims on the same grounds as the decision rejecting the request for preliminary injunction requested in the initial petition, confirming it. The plaintiff filed an appeal, arguing, in addition to the arguments presented in the initial petition, that imposing the purchase of CBios on fuel distributors hinders the activity of the economic sector, violating the principle of Free Enterprise. Biostratum Distribuidora de Combustíveis SA v. Federal Union (Acquisition of CBios) (Paraná Federal Court, Brazil)
Brazilian Court Ruled that an Injunction over Operations in the Atlantic Forest Area Could be Damaging to the Public Economy
On May 11, 2020, the Federal Public Prosecutor’s Office (MPF) and the Public Prosecutor’s Office of the State of Paraná (MPPR) filed a public civil action (environmental class action) against the Federal Environment Agency (IBAMA) and the Environment Agency of the State of Paraná (IAT). The plaintiffs argue that Order 4.410/2020, issued by the Minister of the Environment, changed the previous understanding on the prevalence of the Atlantic Forest Law (Federal Law 11.428/2006) over the Forest Code (Federal Law 12.651/2012). The previous understanding considered the Atlantic Forest Law specialty in regulating this biome. The plaintiffs argue that the new understanding to apply the Forest Code, which is a less protective general rule, would allow the consolidation of occupation of protected areas (APP) illegally deforested (until July 22, 2008). They emphasize the need for the provisions of the Atlantic Forest Law to prevail due to the specialty and greater protection afforded to the biome. They highlight the importance of the biome and the contribution of its deforestation to greenhouse gas (GHG) emissions, arguing that the National Policy on Climate Change (PNMC—Federal Law 12.187/2009) provides for preservation of biomes considered to be National Heritage, such as the Atlantic Forest. As a preliminary injunction, the plaintiffs request a series of administrative measures to prevent the cancellation of environmental infraction notices issued by the state of Paraná in the event of unauthorized suppression, cutting and/or use of remaining Atlantic Forest vegetation and that the state environmental agency (IAT) refrain from approving documents that consolidate occupation in protected areas (APP) on properties in the Atlantic Forest with suppressed vegetation. In the final instance, they request that the injunctions be confirmed and that the IAT refrain from granting environmental licenses in favor of activities in APPs in the Atlantic Forest in disagreement with the special legislation.
In their defense, IBAMA and IAT argued that there is no antinomy between the Atlantic Forest Law and the Forest Code, claiming that the Forest Code created an exceptional regime to govern deforested areas consolidated over time in a less rigorous manner, which applies to any biome. Both requested that the initial claims be dismissed.
The lower court granted the preliminary injunction requested by the plaintiffs. It considered the special nature of the Atlantic Forest Law, which seeks stricter legal protection for the biome. Based on the principles of prevention and precaution, the judge held that the application of the Forest Code’s provisions in the Atlantic Forest biome could result in severe damage to the environment.
The decision was later overturned by the Chief Justice of the Superior Court of Justice (STJ), who ruled that this decision was damaging to the public economy and could cause irreversible damage to the public treasury. A definitive judgment on the merits is still pending. Federal Public Prosecutor’s Office and Public Prosecutor’s Office of the State of Paraná vs. Federal Environment Agency (IBAMA) and Environment Agency of the State of Paraná (IAT) (Federal Civil Court of the State of Paraná, Brazil)
Brazilian Court Held that a Citizen Suit Is Not the Appropriate Procedural Approach to Proceed Against Mining Projects
On February 7, 2022, Duda Salabert Rosa filed a preventive Citizen Suit with a request for a preliminary injunction against the state of Minas Gerais, Taquaril Mineração S/A and Vale S/A—later excluded from the parties—due to the omission to analyze the worsening of extreme weather events within the environmental licensing process of mining projects in the state of Minas Gerais. The plaintiff alleges that the exploitation of minerals in the state is being affected by extreme atmospheric phenomena, a situation neglected by the federative entity. It is pointed out that the negligence regarding the climate issue resulted in the flooding of the Downstream Containment Structure (ECJ) dam built by Vale S/A in the Municipality of São Sebastião das Águas Claras after heavy rains, flooding roads in the region, leaving the district without access to water, electricity, transportation, garbage removal, and other essential services. The author indicates that the project was not preceded by an Environmental Impact Study (EIS) or environmental licensing. The plaintiff emphasizes that the company is unable to measure the impacts of a possible dam failure if the ECJ reservoir is overflowing with water and tailings. It is affirmed that it is necessary to review the hydraulic modeling for this type of project through a corrective environmental licensing process. Still, regarding Vale S/A, it is required the stoppage of the Apolo Project, because the studies presented in the scope of its environmental licensing processes would not have analyzed the influence of the intensification of extreme climatic events on the operation of the activity. The environmental licensing process for the Serra do Taquaril Mining Complex, managed by Taquaril Mineração S/A, is also to be halted, considering that the effects of climate change on the project have not been assessed. According to the EIA, due to the Complex, sediment containment basins will be built, which, if they break, will directly impact a water intake pipeline, affecting the supply of 70% of the local population. The plaintiff argues that the National Policy on Climate Change and the State Policy for Preventing and Combating Disasters Resulting from Heavy Rainfall should guide environmental licensing in the State of Minas Gerais, to include the climate variable in the procedure, following a decision issued by the 9th Federal Court of Porto Alegre, which determined the inclusion of climate guidelines in the Terms of Thermoelectric Power Plants in Rio Grande do Sul State. It is required that the environmental licensing of the Serra do Taquaril Complex and the Apolo Project must be suspended, and the corrective licensing of the JTC must be immediately initiated.
In its reply, Vale S/A informed that the Apolo Project was at a preliminary stage, still under analysis by the competent environmental agency, so as not to pose a danger to the environment. It informed that ECJ would already be going through a corrective licensing phase before the competent environmental agency, which is why there was no interest in acting by the plaintiff. It defended the existence of an impossible passive joinder of defendants since there would be no relationship between the defendants or affinity between the requests made against each defendant. Subsequently, the plaintiff requested an amendment to the initial application to exclude Vale S/A from the defendant’s position. In August 2022, a partial judgment extinguished the claim against Vale S/A. Afterward, the court dismissed the action, without resolution of the merits, for the inadequacy of the chosen path. It was understood that the Citizen Suit is not an appropriate procedural means for the demand sought. Duda Salabert Rosa vs. Minas Gerais State and Taquaril Mineração S.A. (Minais Gerais, Brazil)
Mexican Court Denied Injunction over Challenge of Mexican Energy Regulation Commission’s Relaxed Criteria on Clean Energy
On July 2023, Greenpeace Mexico filed a lawsuit against the Energy Regulatory Commission (Comisión Reguladora de Energía or CRE), challenging the “Resolution No. A/018/2023 of the Energy Regulatory Commission, which updates the reference values of the methodologies for calculating the efficiency of electric energy cogeneration systems and the criteria for determining efficient cogeneration, as well as the efficiency criteria and calculation methodology for determining the percentage of fuel-free energy established in Resolutions RES/003/2011, RES/206/2014, RES/291/2012 and RES/1838/2016, respectively.”
Essentially, the challenged resolution allows to consider as clean energy a fraction of the electricity generated by fossil gas-fired combined cycle power plants, “relaxing” the criteria for efficient cogeneration and the definition of fuel-free electricity generation. The organizations argue that this agreement violated the right to a healthy environment because it promotes the use of fossil fuels to generate energy that can be classified as “clean.” The consequence of the agreement is that the percentage of clean energy generated in Mexico will falsely increase, but GHG emissions will not be reduced. In addition, it is argued that this measure is regressive since it eliminates the incentive to promote the generation of renewable energy and reduce GHG emissions. Furthermore, the resolution will not allow Mexico to comply with its international climate change obligations.
On July 21, 2023, the Third District Court in Administrative Matters Specialized in Antitrust, Broadcasting and Telecommunications denied the requested injunction to suspend the effects of the contested resolution. Greenpeace v. Energy Regulatory Commission (CRE) (District Court in Administrative Matters, Mexico)
Mexican Court Denied Injunction in Challenge to Mexican Energy Regulation Commission’s Relaxing Criteria on What Is Considered as Clean Energy
On July 2023, two NGOs (Nuestros Derechos al Futuro y Medio Ambiente Sano, A.C. and Centro Mexicano de Derecho Ambiental) filed a lawsuit against the Energy Regulatory Commission (Comisión Reguladora de Energía or CRE), challenging the “Resolution No. A/018/2023 of the Energy Regulatory Commission, which updates the reference values of the methodologies for calculating the efficiency of electric energy cogeneration systems and the criteria for determining efficient cogeneration, as well as the efficiency criteria and calculation methodology for determining the percentage of fuel-free energy established in Resolutions RES/003/2011, RES/206/2014, RES/291/2012 and RES/1838/2016, respectively.”
Essentially, the challenged resolution allows to consider as clean energy a fraction of the electricity generated by fossil gas-fired combined cycle power plants, “relaxing” the criteria for efficient cogeneration and the definition of fuel-free electricity generation. The organizations argue that this agreement violated the right to a healthy environment because it promotes the use of fossil fuels to generate energy that can be classified as “clean.” The consequence of the agreement is that the percentage of clean energy generated in Mexico will falsely increase, but greenhouse gas emissions will not be reduced. In addition, it is argued that this measure is regressive, since it eliminates the incentive to promote the generation of renewable energy and to reduce greenhouse gas emissions. These modifications encourage the oil industry to continue generating electricity, halting the energy transition in Mexico.
On July 21, 2023, the First District Court in Administrative Matters Specialized in Antitrust, Broadcasting and Telecommunications denied the requested injunction to suspend the effects of the contested resolution. On August 2023, the plaintiffs appealed the Court’s decision. The appeal is pending resolution by the appellate Collegiate Court. Nuestros Derechos al Futuro y Medio Ambiente Sano and CEMDA v. Energy Regulatory Commission (CRE) (District Court in Administrative Matters, Mexico)
Argentine Coalition Rejected from Blocking the Construction of Thermoelectric Plants for Failing to Perform Required Environmental Assessment
In November 2017, a coalition of individuals and nonprofits brought a preventive action against two thermoelectric power stations, Matheu II (APR Energy) and Matheu III (Araucaria), located in the Argentinian city of Pilar. The petition seeks to block the plants on different environmental grounds, including that their construction began without a required environmental assessment, and that the plants are inconsistent with international climate agreements such as the Kyoto Protocol and the Paris Agreement because they will use fossil fuels. The complaint also relies on Argentina’s civil code, Constitution, and General Law of the Environment, as well as several international human rights treaties.
On November 30 and December 21, 2017, the Federal Court of Campana granted precautionary measures halting the construction and operation of the plants. The Court based its decisions on the General Act of the Environment (Act 25.675), the protection of collective interests (Art. 14 of the Civil and Commercial Code) and the prevention of damages (Art. 1.711 of the Civil and Commercial Code). The Court did not expressly address climate impacts. The Federal Court of Appeals of San Martin upheld these decisions.
After a requirement by Araucaria, on December 22, 2022, the Federal Court of Campana partially modified the precautionary measure allowing the provisional (six months) and partial (two turbines) operation of the power plant Matheu III, under the monitoring of the Municipality of Pilar. The global energy crisis and the rising of energy prices due to the Russian invasion of Ukraine were some of the grounds alleged.
On June 29, 2023, the Court decided not to renew the partial allowance of operation of the plant Matheu III after receiving a negative report from the Municipality of Pilar due to noise pollution. It is worth mentioning that, according to this order, the company APR Energy has presented a Plan for the abandonment of the plant Matheu II. Hahn et al. v. APR Energy S.R.L (Juvevir Asociación Civil v. APR Energy and Araucaria Energy) (Federal Court of Campagna, Argentina)
Argentine Court Rejected Precautionary Halt of the Operation of Thermoelectric Power Plant
In July 2017, a coalition of individuals and nonprofits brought a preventive action against UGEN SA and General Electric Internationale against the thermoelectric power station in the city of Barker, province of Buenos Aires, Argentina. The petition seeks to block the plant on the grounds that the plant’s environmental assessment was flawed, and the plant is inconsistent with international climate agreements such as the Kyoto Protocol and the Paris Agreement because it will use fossil fuels. The complaint also relies on Argentina’s civil code, Constitution, and General Law of the Environment, as well as several international human rights treaties.
On October 24, 2022, the Federal Court of Azul (Nº 2) rejected a precautionary halt of the powerplant operation. However, on June 2, 2023, the Court of Appeals revised the decision and asked the Federal Court to study the matter again. Climate concerns are not expressly addressed in the orders. Carballo et al. v. MSU S.A., UGEN S.A. & General Electric (Federal Court of Azul, Argentina)
Argentine Court of Appeals Upheld Rejection of Plea for the Precautionary Halt of the Construction of Power Plant
In May 2017, the environmental group FOMEA brought a preventive action against the thermoelectric power station MSU S.A. - Rio Energy S.A. and General Electric International, Inc. for its plant located in the city of San Nicolás in Buenos Aires, Argentina. The petition seeks to block the plant on the ground that its construction began without a required environmental certificate, and the plant is inconsistent with international climate agreements such as the Kyoto Protocol and the Paris Agreement because it will use fossil fuels. The complaint also relies on Argentina’s civil code, Constitution, and General Law of the Environment, as well as several international human rights treaties.
On June 01, 2017, and December, 18, 2017 the Federal Court rejected the precautionary halt of the construction of the power plant. The Court of Appeals upheld this rejection. Climate concerns are not expressly addressed in the orders. FOMEA v. MSU S.A., Rio Energy S.A., & General Electric (Federal Court of San Nicolas, Argentina)
Argentine Supreme Court Upheld Rejection of Precautionary Halt of the Installation and Operation of Thermoelectric Plant
On October 20, 2017, a coalition of individuals filed an action against the Province of Buenos Aires and the Provincial Agency for Sustainable Development alleging irregularities in the environmental authorization for the UGEN SA thermoelectric plant, located in the city of Barker, province of Buenos Aires, Argentina. The complaint relies on the Paris Agreement as well as several international human rights treaties. The plaintiffs also requested a precautionary halt of the installation and operation of the thermoelectric plant which the Administrative Court of Azul rejected. This rejection was upheld by the Supreme Court of Buenos Aires and the National Supreme Court. Carballo, et al. v. State of the Province of Buenos Aires and the Provincial Agency for Sustainable Development (Administrative Court of Azul, Argentina)
NEW CASES, MOTIONS, AND OTHER FILINGS
Brazilian Political Parties Filed a Constitutional Challenge of Law that Amends the Environmental Protection Regime of Urban Protected Areas
On April 18, 2022, four political parties—Workers’ Party (PT), Brazilian Socialist Party (PSB), Socialism and Freedom Party (PSOL), and Rede Sustentabilidade (Rede)—filed a Direct Action of Unconstitutionality (ADI), with a request for a precautionary measure, seeking the declaration of unconstitutionality of Federal Law 14.285/2021, which amends the environmental protection regime of urban protected areas (APPs), conferring on the Municipalities and the Federal District the competence to define the limits of APPs around watercourses in urban areas, regardless of the limits established by Federal Law 12.651/2012 (Forest Code). The plaintiffs argue that the challenged law is materially unconstitutional, as it violates (i) the constitutional regime of distribution of competencies in environmental matters (articles 24, VI, VII and VIII c/c 30, II), (ii) the fundamental right to an ecologically balanced environment (article 225) and (iii) the duty of the public authorities to protect the environment (articles 225 and 23, VI and VII), provided for in the Federal Constitution, as well as the principles of prevention and precaution, the prohibition of regression in environmental matters and the prohibition of insufficient protection.
They argue that the law represents a relaxation of the protection of urban APPs, which, in turn, impacts the management of environmental risks and disasters (such as floods and landslides), increasingly frequent with the intensification of extreme events associated with climate change. They request, as a precautionary measure, the suspension of the effects of Federal Law 14.285/2021 until the end of the judgment of the action, maintaining the applicability of the previous law. On the merits, they request the declaration of unconstitutionality of the law. ADI 7146 (Regime of environmental protected areas in urban areas) (Federal Supreme Court, Brazil)
Brazilian NGO Filed Suit Against Corporations that Acquired Carbon Credits
On December 20, 2021, AMOREMA and AMORETGRAP filed a Public Civil Action (ACP) against Sustainable Carbon - Projetos Ambientais Ltda., Ecomapuá Conservação Ltda., Eccaplan Consultoria em Sustentabilidade, Bio Assets Ativos Ambientais Ltda, Deloitte Touche Tohmatsu Consultores Ltda., Barilla G. e R. F.lli S.P.A., Banco Santander S.A., ISA CTEEP - Companhia de Transmissão de Energia Elétrica Paulista, Deloitte Touche Tohmatsu Auditores Independentes, BB MAPFRE Participações S.A., IATA International Air Transport Association, Swire Pacific Offshore Operations (PTE.) Ltd, Inter-American Development Bank, Companhia de Locação das Américas, Groupe Air France, 17er Oberlandenergie GMBH, Wienerberger GMBH, Brockhaus Stahl GMBH and other companies which acquired carbon credits from the Ecomapuá Project that the plaintiffs could not identify. It is alleged that the defendant companies illicitly traded in the voluntary market carbon credits generated in or around the Mapuá Extractive Reserve (RESEX Mapuá) and Terra Grande-Pracuúba Extractive Reserve (RESEX Terra Grande-Pracuúba), located in the Amazon, in the state of Pará, which characterizes illegal takeover of these assets.
This is because the defendant companies obtain an economic advantage from the misappropriation of credits, due to the environmental preservation promoted by the traditional extractivist population, without receiving fair remuneration or compensation. The Extractive Reserves are, according to specific legislation, public lands of the Federal Union, whose real right of use is granted to the traditional populations that inhabit them. It is in discussion the generation and sale of carbon credits from the “Ecomapuá Project” from 2015 in the Amazon, prepared and/or marketed by the companies Ecomapuá, Sustainable Carbon, Bio Assets and Evento Neutro, which consists of the sale of assets from REDD+ projects (credits generated by avoided deforestation, sustainable management and increased forest carbon stocks), is discussed. The other defendant companies are sued for having acquired the assets without the necessary diligence, therefore entering into void contracts due to illicit objects or for supporting the project. It is claimed that areas of the Project, consisting of Fazendas Brasileiro, Lago do Jacaré, and São Domingos, overlap with the territory of RESEX Mapuá and Terra Grande-Pracuúba, where hundreds of families live and, therefore, the certified credits from these areas should belong to the extractivist communities that inhabit them.
It is argued that the preservation of forests in the project areas comes from the activities of the extractivist communities in the region and that the sale of the assets of the Ecomapuá Project had the certification of “social carbon,” stating that there would be counterparts for the communities, which did not occur. Thus, the plaintiffs claim that the companies misused the name, image, and cultural heritage of the communities and altered the truth of the facts by advertising the socio-environmental responsibility of the Project. The associations argue that the companies caused collective material and moral damages to the extractivist families and incurred in enrichment by intervention. They request: (i) that the defendants who sold carbon credits submit detailed reports on said assets; (ii) that the defendants submit contracts and other documents on the transactions carried out within the scope of the Ecomapuá Project; (iii) the joint and condemnations of the defendants to pay the plaintiffs compensation for material damages, restitution of the benefits earned by the defendants and compensation for collective moral damage; and (iv) an order, under penalty of a fine, that the defendants cease to buy or sell carbon credits from within or around the Mapuá and Terra Grande-Pracuúba Extractive Reserves and cease to use the name and image of the extractivist populations, their associations, and the respective Extractive Reserves. AMOREMA e AMORETGRAP vs. Sustainable Carbon and others (Carbon credits and Extractive Reserves) (Pará Federal Court, Brazil)
Australian NGO Seeks to Compel Agencies that Subsidize Fossil Fuels to Disclose the Environmental Effects of Those Activities
On July 18, 2023, Jubilee Australia, a human rights and environmental organization, filed a claim in the Federal Court of Australia seeking to compel Federal government agencies that subsidize fossil fuel projects to disclose the full environmental effects of those activities. The claim is against Export Finance Australia (EFA), which is Australia’s export credit agency, and the Northern Australia Infrastructure Facility (NAIF), a $7bn AUD fund for infrastructure in northern Australia.
Both EFA and NAIF provide taxpayer-subsidized financial support to fossil fuel projects that may not otherwise go ahead. The claim names the Chairs of EFA and NAIF as representatives of their respective Boards, which, in turn, must ensure the reporting requirements are met. The action alleges certain contraventions of s 516A(6) of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) that requires government agencies and departments to include the following information in their annual reports:
- How their activities accord with the principles of ecologically sustainable development—including the precautionary principle and the principle of intergenerational equity;
- The effect of their activities on the environment;
- The measures they are taking to minimize the impact of their activities on the environment;
- The mechanisms for reviewing and increasing the effectiveness of measures to minimize the impact of the activities on the environment.
The definition of activities includes developing and implementing policies, plans, programs, and legislation. Jubilee Australia alleges that EFA and NAIF failed to adequately disclose the information above in recent annual reports, including failing to disclose the true effect of their financing activities on the environment. On August 9, 2023, the Court made orders setting out a timetable for the respondents to request further and better particulars of the statement of claim. The matter has been listed for a case management hearing on November 3, 2023. Jubilee v EFA and NAIF (Federal Court of Australia, Australia)
Australian Climate Campaigners Submitted a Complaint About Representations Made by Petroleum Association
On July 17, 2023, Lock the Gate and Comms Declare jointly submitted a complaint to the Australian Competition and Consumer Commission (ACCC) about representations made by the Australian Petroleum Production and Exploration Association (APPEA) regarding its “future of gas” campaign, alleging that it is in breach of ss 18 and 29 of the Australian Consumer Law.
The “future of gas” campaign promotes fossil gas as essential to the transition to a net zero economy without providing information about the role of renewable energy in the transition. Lock the Gate and Comms Declare consider that the campaign is potentially a “false and misleading sustainability claim [that] undermine[s] consumer trust in all green claims and reduce[s] confidence in the market.” Complaint to ACCC regarding APPEA (Australian Competition and Consumer Commission, Australia)
Australian Securities and Investments Commission Commenced Proceedings Against Vanguard for ESG-Related Misconduct
On July 24, 2023, the Australian Securities and Investments Commission (ASIC) commenced proceedings against Vanguard Investments Australia Ltd (Vanguard) alleging misleading conduct in relation to the ESG criteria applied to its Vanguard Ethically Conscious Global Aggregate Bond Index (Hedged) Fund (the Fund). The Fund tracks an index called the Bloomberg Barclays MSCI Global Aggregate SRI Exclusions Float Adjusted Index (the Index), which purports to exclude securities based on research and screening against ESG criteria.
Between August 2018 and February 2021, Vanguard published twelve product disclosure statements (PDSs) for the Fund, each of which contained a statement that Vanguard does not take into account labour standards, environment, social or ethical considerations when selecting, retaining or realising investments in the Fund to track the performance of the benchmark index, but that Vanguard has “engaged Bloomberg Barclays to provide an index of securities for the Fund that excludes companies with significant business activities involving fossil fuels, alcohol, tobacco, gambling, military weapons and civilian firearms, nuclear power and adult entertainment.” A majority of the PDSs also directed readers to Bloomberg’s website which contained fact sheets about the index. A fact sheet issued in 2018 stated that the Index “removes issuers with evidence of owning fossil fuel reserves or are involved in certain controversial business lines.” A fact sheet issued in 2020 stated that the index “removes issuers with ties to thermal coal, oil and gas or are involved in certain controversial business lines. The index also excludes issuers with very severe ESG Controversies or Red Flags.” Vanguard also allegedly made similar statements about the ESG screening of the Fund in an interview during the relevant time period.
ASIC is ultimately alleging that Vanguard made representations that: (1) before being included in the Index, and the Fund, securities were screened to assess their applicability against certain ESG criteria; and (2) securities that did not meet the ESG criteria were excluded from their inclusion in the Index, and therefore the Fund. ASIC alleges that contrary to these representations, a significant proportion of the bonds in the Index and, therefore, the Fund were not screened against the applicable ESG criteria. ASIC seeks declarations that Vanguard has engaged in misleading conduct, an order that Vanguard pays pecuniary penalties in respect of that conduct and adverse publicity orders. The matter is listed for a first case management hearing on August 25, 2023. ASIC v Vanguard Investments Australia Ltd (Federal Court of Australia, Australia)
NGO Filed Claim Challenging Allegedly Misleading Statements Made by EnergyAustralia About Its “Carbon Neutral” Products
On August 9, 2023, Australian Parents for Climate Action (AP4CA) filed a claim in the Federal Court of Australia challenging allegedly misleading statements made by EnergyAustralia about its “carbon neutral” energy products. AP4CA is a climate advocacy organization that works for parents, carers, and families who want to create a safer future for their children. EnergyAustralia produces and sells electricity and is Australia’s third largest domestic greenhouse gas emitter, producing 16.2 million tonnes of CO2 equivalent in 2021/22. EnergyAustralia offers “Go Neutral Electricity” and “Go Neutral Gas” products. “Go Neutral” customers purchase energy which is mainly sourced from burning fossil fuels, and EnergyAustralia promises to purchase carbon credits to “offset” the associated emissions. The “Go Neutral” products require consumers to opt-in, but there is no additional cost to the consumer.
EnergyAustralia, on its website, claims that: (1) “Go Neutral” electricity and gas is “carbon neutral”; (2) emissions created by “Go Neutral” electricity and gas are “cancelled out” or “negated”; and that (3) by opting into “Go Neutral” products, consumers “have a positive impact on the environment.” AP4CA argues that EnergyAustralia’s marketing of its “Go Neutral” products amounts to misleading or deceptive conduct contrary to section 18 of the Australian Consumer Law. AP4CA argues that carbon offsets do not “cancel out” or “neutralize” the emissions generation by “Go Neutral” energy, and that using “Go Neutral” energy does not have a positive impact on the environment. This is because, in summary: (1) paying someone else to avoid generating emissions (known as an “avoidance” credit) is not equivalent to removing the emissions generated from “Go Neutral” energy (almost 99% of EnergyAustralia’s carbon credits are avoidance credits); (2) paying someone else to remove carbon emissions from the atmosphere (known as a “removal” credit) does not cancel out or negate the emissions generated from “Go Neutral” energy (the carbon removal projects EnergyAustralia buys are short-lived and not permanent); and (3) the emissions from “Go Neutral” ultimately result in a net increase in greenhouse gases in the atmosphere.
AP4CA also argues that EnergyAustralia’s renewable energy product “PureEnergy” was not given the same prominence on its website as “Go Neutral”, meaning customers could not compare both products. AP4CA seeks a declaration that EnergyAustralia has misled its customers since 2019 about the greenhouse gas emissions associated with their electricity and gas usage. AP4CA also seeks an order that EnergyAustralia be restrained from making “carbon neutral” or similar statements to describe the “Go Neutral” product and that it issue a corrective statement to its customers. The Court will list the matter for a first case management hearing. Australian Parents for Climate Action v EnergyAustralia (Federal Court of Australia, Australia)
Brazilian Development Bank Defended Its Investments and Alleged Failures to Accord to the Paris Agreement
On June 21, 2022, Conectas Direitos Humanos filed a claim against BNDES (Brazil’s Development Bank) and BNDESPar, the bank’s investment arm responsible for managing its shareholdings in various Brazilian companies held by the bank. According to Conectas, this is the world’s first civil climate action against a national development bank. Although BNDESPar, which is publicly owned, follows an Environmental and Social Policy for Operating in Capital Markets, which bans support for companies with a track record of environmental crimes and modern-day slavery, this policy does not include climate criteria. The company also does not report the carbon emissions associated with its investment portfolio and still maintains equity positions in sectors that are among the most carbon-intensive in the Brazilian economy. The lack of rules or protocols for assessing the impacts of its investments on the climate crisis is in violation of Brazil’s commitments under the Paris Agreement and the country’s own PNMC (National Policy on Climate Change), among other provisions.
On June 22, 2022, a subpoena was issued to the parties required to manifest on the requested urgency relief. BNDES and BNDESPAR presented their answer. They argued that the BNDES system has internal policies, structured procedures, and appropriate conduct to address environmental, social, and climate issues, including promoting the carbon market. They informed that they adopt international and national protocols of best ESG and climate practices, such as the NDC Panel—a platform that shows the performance of the BNDES system in relation to Brazilian climate goals, including monitoring emissions from the projects it supports. They asserted that the system has a pilot methodology for assessing the climate risks of supported projects. They highlighted that, in 2022, the measurement of greenhouse gas (GHG) emissions from its administrative activities, calculation of financed GHG emissions and the adoption of divestment processes in carbon-intensive companies and activities were carried out. They claimed their passive illegitimacy, since the Federal Supreme Court established, in the judgment of ADPF 708 (Climate Fund), that it is the competence of the Union to execute public policies related to the climate issue. They claimed that the time limit for filing claims related to the PNMC had already expired and that the claims in the initial petition disregard possible consequences on economic activities carried out by the defendants. They argued that the Paris Agreement proposes that the treatment of climate issues by countries is conditional, voluntary, and a long-term commitment and that Brazil already occupies a leading position in the fight against climate change. They pointed out that the case would violate the separation of powers, as it seeks to make the judicial branch an instance of political climate governance. Because they are state-owned companies, they argued that they do not have the autonomy to develop their own environmental policy, but must comply with the policies defined by the Federal Union, environmental legislation, and the Federal Constitution.
Conectas Direitos Humanos presented a reply, in which it rebutted arguments brought by the defense and emphasized the importance of the judicial branch in climate litigation to protect citizens’ rights. It pointed out that the climate measures sought by the claim are distinct from the environmental measures listed by the defendants. It clarifies that the core of the debate of the ACP is (i) that the Brazilian legal system implies the necessary collaboration of BNDESPAR to achieve the country’s climate goals and (ii) that the entity does not adopt measures in this regard, considering the most advanced technical criteria that exist. Conectas Direitos Humanos v. BNDES and BNDESPAR (Federal District, Brazil)
Brazil’s National Environment Agency Defended Construction of Thermoelectric Plants
On October 28, 2022, the NGO, Instituto Internacional Arayara filed a Public Civil Action (environmental class-action) against the National Environmental Agency (Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renováveis—IBAMA), the Federal Union, the Rio de Janeiro’s State Environmental Agency (Instituto Estadual do Meio Ambiente—INEA), the State of Rio de Janeiro, and the companies EDF Norte Fluminense S.A. - Usina Termelétrica Norte Fluminense S.A., Global Participações em Energia S.A., Usina Termelétrica Nossa Senhora de Fátima, and Litos Energia Ltda. The plaintiff seeks the annulment of the previous environmental licenses issued by IBAMA for thermoelectric projects located in the municipality of Macaé, in the state of Rio de Janeiro. It also seeks the annulment of the (i) water resources use right grants and (ii) Water Availability Reserve Certificates referring to the Macaé and Ostras River Hydrographic Basin, granted by INEA for the same projects. The plaintiff institution defends that the installation of a thermoelectric complex in the region, consisting of eighteen enterprises, is contrary to the need for investment in a clean energy matrix and the fight against climate change. It argues that there should be a determination that licensing agencies require, prior to issuing licenses: (i) a Strategic Environmental Assessment (AAE) for the analysis of synergistic and cumulative impacts of enterprises to be installed in the same hydrographic basin; (ii) the updating of the plan of the Hydrographic Basin of the Macaé and Ostras River and the study of water availability of the Basin; and (iii) the presentation of a Climate Diagnosis, with an inventory of Greenhouse Gas (GHG) emissions by the enterprises.
IBAMA, the Federal Government, Litos Energia Ltda, Usina Termelétrica Norte Fluminense S.A, the State of Rio de Janeiro, INEA and Global Participações filed answers. In relation to climate aspects, IBAMA argued that the terms of reference used for the licensing of the project included the need for a synergistic assessment of atmospheric gas emissions from existing plants and those to be implemented. Instituto Internacional Arayara v. IBAMA and others (Rio de Janeiro Federal Court, Brazil)
Claim Raised by Argentine NGO Against Fossil Fuel Expansions Conducted Without Proper Environmental Clearance
On August 1, 2023, Fundación Ambiente y Recursos Naturales (FARN) (an ENGO) filed a judicial claim asking for a precautionary order that prevents national authorities, including the Secretary of Climate Change, the Ministry of the Environment and Sustainable Development and the Secretary of Energy, to provide consent for offshore seismic exploration and/or offshore fossil fuel exploitation until a proper environmental impact assessment and a strategic environmental assessment have been carried out, as the already conducted environmental impact assessment was described as deficient. According to the claim, these environmental assessments should include an assessment of activities’ cumulative and climate impacts, a consideration of energy alternatives, and a cost-benefit analysis in the context of a just energy transition. Furthermore, FARN asked for the immediate halt of any already consented offshore exploration activity until the assessments were conducted. This precautionary claim is an accessory to a future civil claim that FARN intends to file next to prevent environmental damages in the marine ecosystem and challenge the technical reasonableness of developing projects that are contrary to Argentina’s climate commitments.
Among the deficiencies observed in already conducted environmental assessments, the claim mentions an underestimation of projects’ GEI emissions, including methane emissions due to leakages in the exploration and production stage and emissions due to the combustion of the extracted fossil fuels. Allegedly, this deficiency prevented authorities from properly considering the cumulative impacts of GEI emissions on the climate.
Different legal grounds are alleged by FARN in the claim, including Article 41 of the Argentinean Constitution (right to a healthy environment), the duty to prevent environmental damage (Art. 2.g., Act 25.675), access to environmental information (Art. 16, Act 25.675), the duty to conduct environmental assessment (Art. 11 and 13, Act 25.675), the environmental principles (precaution, prevention, sustainability, intergenerational equity, non-regression), the Climate Change Act 27.520, the Paris Agreement, the Convention on Biological Diversity, the Escazú Agreement and the American Convention on Human Rights (as interpreted by the Inter-American Court in its Advisory Opinion 23/17).
According to the claim, several transnational corporations are involved in the development of these activities together with YPF (the national energy corporation), including Equinor, Exxon Mobil, Qatar Petroleum Pluspetrol, Shell, Tullow, and Total Austral. This is not the first case challenging fossil fuel exploration and exploitation activities in the Argentinean Sea. FARN v. Ministry of the Environment and Sustainable Development (Federal Administrative Court No 8, Argentina)
Australian Court to Hear Claim Regarding State’s Constitutional Authority to Institute a Tax on Electric Vehicle Drivers
On September 16, 2021, two electric vehicle drivers, Mr. Christopher Vanderstock and Ms. Kathleen Davis, brought a claim in the High Court of Australia against the State of Victoria to challenge the Zero and Low Emission Vehicle Distance-based Charge Act 2021 (Vic) (ZLEV Act). The ZLEV Act, adopted in July 2021, introduces a new tax that charges electric vehicle drivers between 2 and 2.5 cents for every kilometer they drive. In addition, drivers of electric vehicles are required to submit annual odometer readings to state authorities from which an annual charge is calculated. The plaintiffs argue that the State of Victoria lacks the constitutional authority to impose such a charge based on Section 90 of the Commonwealth Constitution, which, they claim, reserves the exclusive power to levy such charges for the Commonwealth.
While the plaintiffs do not question the act based on a material issue of law that involves climate change, this case is on the leading edge of an issue and is therefore included on an exceptional basis in the database. On October 19, 2021, the court set out the timetable for the proceedings. On March 3, 2022, the court made further orders amending the original timetable. Vanderstock and Anor vs the State of Victoria (High Court of Australia, Australia)
Argentine NGO Challenges Provincial Constitution as Unconstitutional Due to Climate, Indigenous, and Environmental Concerns
On July 12, 2023, several Indigenous Communities and an ENGO (Fundación Ambiente y Recursos Naturales—FARN) filed a claim before the Superior Tribunal of Justice of the Jujuy Province challenging the constitutionality of the new provincial constitution. The claim involved several arguments, some of them are environmental, and one relates to climate. Among others, the plaintiffs alleged the breach of the right of the Indigenous Communities to free, prior and informed consent, the right to access information, the right of human rights defenders in environmental matters, the non-regression principle as contained in the Escazú Agreement and the infringement of international and national environmental provisions.
Regarding this last argument and particularly climate concerns, the plaintiffs observed that Jujuy is home to (high-Andean) wetlands (salt pans, salt flats, lagoons, meadows) that provide a range of key environmental benefits, such as climate mitigation and adaptation, and that those ecosystems are threatened by the impacts of climate change and human activities with high impact, including the increasing lithium mining. In this context, the plaintiffs argued, there is a need to develop a sound protection of these ecosystems that includes an intergenerational approach and the rights of the future generation. This protection is, however, according to the plaintiffs, disregarded by the new constitutional text that regulates these ecosystems mainly as objects of exploitation and production. In this sense, the new constitutional text would not engage with the National Climate Change Act, nor with the NDC or the National Long-Term Strategy. Particularly, the provincial constitutional text would breach the principle of priority introduced by the National Climate Change Act and that establishes that adaptation and mitigation policies must prioritize the needs of vulnerable groups in the context of climate change (Art. 4.c Act 27.520). Comunidad aborigen de Santuario de Tres Pozos et al v. Jujuy Province (Argentina)