Standing in front of the High Court on Wednesday June 21, Sarah Finch discussed the start of a hearing that could have profound consequences for the extraction of fossil fuels in the UK. Leading the Weald Action Group, Finch has challenged Surrey County Council’s decision to grant planning permission on an oil drilling project that could extract up to 3 million tonnes of crude oil following expansions of the Horse Hill oil field. .
The judicial challenge refers to an interpretation of the urban regulations. If a project is likely to have a significant impact on the environment, an environmental impact assessment is required as part of the planning permission application. The environmental impact assessment for the Horse Hill oil field expansion considered the immediate environmental impact of drilling activities.
However, Finch has argued that this assessment should also have taken into account future emissions from burning the extracted oil, known as downstream impact. For 3 million tons of crude oil, it has been estimated that this downstream impact would be in the order of 10 million tons of CO2. For comparison, that equates to the average annual carbon footprint of almost 2 million UK residents.
By addressing environmental issues through strategic litigation, this case reflects a global movement that has grown exponentially in recent years. The LSE Grantham Research Institute on Climate Change and the Environment reported in 2022 that climate litigation has doubled since 2015. The report also found that more than 50% of climate litigation cases filed outside the US resulted in an outcome that was considered favorable for climate action.
The increasing volume and effectiveness of these cases make climate litigation impossible for businesses to ignore. Climate litigation risk is now a very real factor for businesses in a wide range of sectors. With uncertainty about the direction the courts will take in many climate cases, energy companies must weigh the risk of continued reliance on fossil fuels.
Litigation funders are also taking note of the growth in this area. Funders are third-party organizations that provide legal funding for claims in exchange for a percentage of the financial award if they are successful. A new funder, Aristata Capital, recently raised £30m to fund human rights cases and environmental litigation. An example of the impact of funding on climate action was seen in the 2022 settlement of a lawsuit funded by Harbor Litigation. Power company PTTEP Australasia paid more than £100 million to some 15,000 Indonesian farmers after an oil leak caused irreparable damage to their crops.
On the other hand, an increasing number of cases brought by non-profit organizations also directly challenge government policy. In 2019, the nonprofit group Urgenda won a ruling in the Dutch Supreme Court that the country’s plans to combat emissions were not enough. In 2020, environmentalists won similar enhanced compromises in Germany’s constitutional court and last year, the high court ruled in favor of Client Earth that the UK government’s net zero emissions strategy was inadequate.
Experts have drawn parallels to the approach taken to combat the tobacco industry in the mid-20th century: a damning scientific consensus, powerful corporate lobbyists and a legal landscape that is changing to favor activists. Along with scientific research and political campaigns, litigation played a central role in the increasingly restrictive legal framework surrounding the tobacco industry. In the United States, the Tobacco Master Settlement Agreement resulted in the dissolution of several powerful tobacco industry groups along with financial damage.
It is clear that the courts could play a similar central role in the fight against climate change. Activists have already achieved successful results by securing better commitments from both public bodies and private organisations. Perhaps the most significant result was achieved in The Hague in 2021. The court ordered Shell, the world’s fourth-largest energy company, to reduce its global emissions by 45% by 2030. This included not only emissions from drilling , but also the downstream impact of their products.
Despite the smaller scale, many of the same arguments underpin the Surrey oil case heard in the Supreme Court last week. The case reflects a growing number of climate activists directly challenging decisions they find unacceptable. Like many other climate cases underway in courts internationally, campaigners and companies alike will be closely watching a decision that could be pivotal in UK environmental law.