The ECtHR’s Landmark Climate Ruling of 2024
In April 2024, The European Court of Human Rights (ECtHR) ruled that Switzerland had failed to comply with its duties to fight climate change. This ruling was brought on by 2,000 Swiss members of Senior Women for Climate Protection advocating for climate rights, citing that under Article 8 of the Convention of Human Rights, Switzerland failed to address the effects of climate change that infringe on their lives, health, well-being, and quality of life. This decision set a legal precedent for future climate-related lawsuits across the 46 member states of the Council of Europe and marked the first time an international court had ruled on climate change. Therefore, the decision was largely considered a win amongst climate activists.
Following the ruling, Switzerland’s government and parliament began deliberating their response. In June 2024, Switzerland’s upper house of parliament (Council of States) criticized the ECtHR's decision as "judicial activism," arguing that the country's existing climate policies were sufficient to meet human rights requirements. Shortly afterward, the lower house (National Council) voted to reject the ruling altogether on 12 June 2024, raising questions about Switzerland's commitment to international human rights obligations.
A Ripple Effect: Legal Challenges Across Europe
Meanwhile, the ECtHR's decision inspired similar legal challenges across Europe. In 2024, activists in Germany filed a lawsuit targeting the government's insufficient measures to curb carbon emissions, citing the precedent set by the Swiss case. Later, in September 2024, an Austrian individual with multiple sclerosis filed a case before the ECtHR, arguing that the government’s failure to address climate change exacerbates his health condition, thereby violating his human rights.
In Switzerland, the ruling continues to provoke political and public debate. While the Swiss parliament has rejected the ECtHR’s demands, Swiss environmental agencies have begun consultations with international climate scientists to craft a revised roadmap to carbon neutrality. This move signals potential shifts in Swiss climate policies despite the political resistance.
Implications for Businesses: A Call to Action
The ruling has significant implications for businesses, especially firms that have a significant influence on and are exposed to climate risks. The claimants had contended for nearly a decade that they were disproportionately affected by global warming and that the Swiss government was obligated to safeguard their right to a healthy life. Although Swiss courts had previously dismissed their claims, the ECtHR ruled in favor of the women by a majority vote.
The group's lawyer, Cordelia Baer, emphasized that Switzerland must address the violation by developing a CO2 budget based on scientific evidence. The court identified "critical gaps" in Switzerland's current framework, potentially necessitating a faster transition to carbon neutrality, possibly within the next decade or two, rather than the previously set target of 2050, which Switzerland is not on track to meet.
This decision implies that Swiss-based Fortune Global 500 companies, such as Glencore, Swiss Re, and Zurich Insurance, will operate under tighter carbon constraints as they pursue net-zero emissions. The ruling also has implications for other Global Fortune 500 companies, particularly those with significant European operations or headquarters. By ruling in favour of the women, the court has now signalled to both individual countries and companies alike that climate change is no longer a problem to be ignored. In North America, there is also a trend of similar landmark rulings creating judicial pressure for climate action.
Carbon Markets Under Scrutiny: The State of the VCM in 2024
Outcomes from youth climate cases in Canadian and US Courts this week reinforce that governments need to do more to curb climate change, which could signal regulatory changes soon. However, recent Voluntary Carbon Market (VCM) trends indicate a reassessment period. While the ECtHR ruling has heightened awareness and urgency around corporate climate action, the credibility and effectiveness of carbon credits have come under scrutiny. The value of credits sold in the VCM dropped from 2.1 billion in 2021 to $723 million in 2023, reflecting concerns about market integrity. Some major companies have shifted focus from purchasing offsets to directly reducing emissions. Analysts note that this evolving market landscape underscores the need for reforms to ensure the market can support meaningful climate action. Despite these challenges, the value of credits retired in the VCM increased to around USD 900 million in the first 11 months of 2024, signalling ongoing interest as companies seek to align with stricter climate policies.
References:
- Amnesty International. "European Court of Human Rights sets vital precedent with ruling in landmark climate case." April 2024.
- Reuters. "Swiss upper house of parliament slams European climate ruling." June 2024.
- Reuters. "Swiss parliament considers snubbing European court climate ruling." June 2024.
- The Atlantic. "The most personal climate case in the world." September 2024.
- Carbon Pulse. "VCM landscape shows increased credit retirements amid scrutiny." November 2024.