Explainer: Why a Peruvian farmer's court loss may be a win for climate justice
May 28 (Reuters) - A decade-long court battle between a Peruvian farmer and German energy giant RWE (RWEG.DE), opens new tab over the company's global emissions and its impact on his hometown finally came to an end on Wednesday.
The court threw out the case without the possibility of appeal. Despite that, the farmer, his lawyers and environmentalists are hailing the ruling as an unprecedented victory for climate cases that could spur similar lawsuits.
The highland Peruvian city of Huaraz is at risk from a glacial lake outburst flood as glacial melt has caused the volume of Lake Palcacocha to increase by at least 34 times since 1970, requiring investment in dams and drainage structures.
Peruvian farmer Saul Luciano Lliuya sued German energy giant RWE, claiming it should pay for 0.5% of the flood defenses since the company emitted 0.5% of global emissions since the industrial revolution despite not having a physical presence in Peru.
The amount would have come out to about $17,500.
The court decision was based on calculating the risk Lliuya's home faced from flooding. An expert opinion found that the 30-year damage risk to the plaintiff's house was 1%. The court deemed this was not enough to take the case further.
While Lliuya's house's risk didn't pass the threshold, the court said that companies could be held liable for the impacts of their emissions.
"They really established a legal duty, a legal principle of corporate climate liability, which no court has ever done anywhere else in the world in a verdict like this," Noah Walker-Crawford, a researcher at London School of Economics, Grantham Research Institute, said in a press conference after the verdict. "So this is a really, really historic decision."
The court ruling stated that civil courts can rule on climate cases and that the German Civil Code overseeing property rights applies across borders and therefore, litigants around the world can file transnational cases against German companies.
The court noted that RWE's permits do not exempt it from liability when infringing on the rights of others and the size of its global emissions meant it had a special responsibility for consequences due to climate change.
It noted that being one of many emitters does not shield a company from liability.
The court said that the link between emissions and risks dates back to 1958, when U.S. scientist Charles Keeling published a graph of the annual variation and accumulation of carbon dioxide in the Earth's atmosphere.
It added that the 1965 Presidential SAC report that found burning fossil fuels increases atmospheric CO2 also gave companies enough information to foresee harmful consequences of emissions and bear legal responsibility for them.
It added that there is a linear causation between emissions and climate change and the complexity of climate change science does not prevent liability.
In a statement to Reuters, a spokesperson for RWE said the ruling did not set a precedent as it is understood in the UK legal system, and it added three other regional courts have taken a different legal view.
Since the case was thrown out, the court did not rule on whether and to what extent RWE could be held responsible, the statement said, adding that the company has operated in accordance with applicable laws and climate policy should be resolved at the political level.
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