The Chamber has long maintained that advancing effective climate change solutions require citizens, governments, and businesses to work together. What it doesn’t require is long-running court battles that create uncertainty. Unfortunately, uncertainty is exactly the result of a recent decision by a German court in a climate lawsuit brought by Peruvian farmer Saúl Luciano Lliuya against German power company RWE. To make a long story short, the case ended in a dismissal of the plaintiffs’ claims, but it may have provided a template for an unpredictable number of similar claims to be brought in German, and indeed other international, courts.
In the case, the plaintiff alleged that RWE’s historical activities contributed to the melting of a glacier near Lliuya’s home, and claimed the company was responsible for a percentage of the costs to build a drainage system to protect his property. RWE has operations in Asia, Europe, and the U.S., but has never operated in Peru. The Higher Regional Court of Hamm stated that there was no “concrete” risk of damage to the plaintiff’s property and dismissed the case.
Though the German court dismissed Lliuya’s case, it nevertheless affirmed that the plaintiff had the right in principle to sue the power company over its emissions, that emissions “attribution studies” can be used as evidence in such cases, and that the distance between RWE’s operations and the plaintiff’s home did not invalidate the case.
The dynamic of this case—in which the court dismissed the plaintiffs’ claims but potentially created broader liability with its reasoning—recalls a Dutch appeals court decision from last year. In 2024, judges in the Hague overturned a lower court decision obliging international oil major Shell to decrease carbon emissions by 45%. In its November decision, the court stated it was “unable to establish that the social standard of care entails an obligation for Shell to reduce its CO2 emissions by 45%, or some other percentage.” But as supporters of the plaintiffs were quick to highlight, the court did not overturn a nebulous, lower court-imposed duty to take action limiting CO2 emissions.
Germanwatch, one of the non-governmental organizations supporting Lliuya’s case, argued after the decision that the judge’s reasoning in Lliuya v. RWE AG sets a precedent with far-reaching consequences for Germany’s business environment—potentially opening the door for climate-related claims against German industry from around the world. Despite the judge’s dismissal, which was based on the lack of any immediate threat of damage to Lliuya’s home, the judge’s determination that a plaintiff anywhere in the world can sue a distant company over its emissions and alleged contributions to a threat of potential future harm risks emboldening future plaintiffs to bring similarly tenuous claims in this court, in other German courts, or indeed in non-German courts that may use the Hamm court’s reasoning as a template. A flurry of such litigation would create uncertainty and raise costs for public and private energy producers and, as always, for citizens. What it would not do is meaningfully remedy the challenges associated with climate change.
