Explainer-Why are BMW and Daimler being sued over climate change? By Reuters
By Victoria Waldersee
BERLIN (Reuters) – German activists have filed a lawsuit against automakers BMW and Daimler (OTC:) for refusing to tighten carbon emissions goals, the first time German citizens have sued private companies for exacerbating climate change.
The Deutsche Umwelthilfe (DUH) heads, a non-governmental organization (NGO), filed a lawsuit against Volkswagen (DE). This suit is identical to one filed for Volkswagen by Greenpeace’s Germany Division in partnership with Clara Mayer (Fridays for Future activist), and another unidentified landowner. This group gave Volkswagen until October 29th to reply.
DUH challenged Wintershall, an energy company to reduce its emission targets. However, no lawsuit has yet been filed against it.
Let’s find out what these cases are and how they impact our lives.
WHERE HAS IT COME FROM?
Germany’s supreme court decided in May that Germany’s climate legislation was inadequate to ensure the safety of future generations. The court set budgets for carbon emissions in major sectors and increased the amount of emissions that must be cut from 1990 levels by 2030 from 55% to 65%. It also stated that Germany must become carbon neutral by 2045.
Although these standards may restrict the lives of the current generation, it would make future generations more difficult to live in a warming world and avoid the issue from worsening, court said at that time.
In the same month, environmental groups in the Netherlands won a case against oil company Shell (LON:) for not doing enough to mitigate its impact on the climate – the first private firm to be ordered by a court to reduce its emissions.
German activists now have a case to make on the heels of the two rulings.
WHY IS IT SO IMPORTANT?
Two reasons are important in this case.
The first is the fact that it sets a precedent for companies being held responsible for the impact their products’ emissions have on human lives.
If the defendants win, citizens could be emboldened to sue other companies – from airlines to retailers to energy firms – for not doing enough to mitigate their impact on the planet.
Secondly, because companies will be forced to prove in court that their emissions targets are as watertight as they say they are – stress-testing their claims that they are taking climate change seriously.
WHY DO THESE COMPANIES CARE?
Daimler and BMW set climate targets.
Daimler plans to make purely electric cars (EVs), by 2030 and offer an alternative electric vehicle for every model by 2025. BMW intends to have at least 50% of its global sales be electric vehicles (EVs) by 2030 and also reduce the CO2 emissions by up to 40% per vehicle during that timeframe. Volkswagen announced that by 2035, it will cease making fossil fuel-emitting automobiles.
They all stated their goals are compatible with the Paris Agreement to combat global warming.
However, the defendants contend that their goals don’t meet the requirements of the German climate ruling (IPCC) and the carbon emissions budgets.
The case claims that the defendants have made the carbon-emitting companies directly responsible for future restrictions on individuals’ rights if budgets are not adhered to.
They are not the only ones that could be affected by such arguments – and if DUH prevails, there could be more.
WHAT DO THEY WANT?
DUH would like both the autos companies to legally agree to stop producing fossil fuel-emitting vehicles by 2030 and ensure that their CO2 emissions do not exceed their fair share.
Their fair share is what they refer to. It’s a complex calculation – but put simply, the NGO has calculated a personal ‘carbon budget’ for each company, based on a figure put together by the IPCC of how much carbon we can still emit globally without warming the Earth beyond 1.7 degrees Celsius, and how much carbon the companies emitted in 2019.
According to its calculations, the companies’ current climate goals aren’t enough to keep them within their allocated budget – meaning that even if everyone else sticks to their budgets, these companies’ activities would push emissions over the limit.
WHAT HAS DAILY DIMLER TOLD THE COMPANIES?
Daimler stated Monday that it didn’t see any basis for this case. Daimler stated that they have made a clear declaration for climate neutrality. It said it was its goal to become fully electric in the next decade, if market conditions allow.
BMW claimed that it had already placed its climate targets at the top of the market and that their goals aligned with the goal of keeping global warming to 1.5 degrees below.
Volkswagen stated that they would review the matter, but it does not consider suing individuals firms a good way to address societal problems.
WHAT COMES NEXT
Germany’s district court now has to decide whether or not the case should go forward. The court will decide if the case should be continued. If so, it will ask the defendants to provide evidence and then there will be a written discussion between them.
The decision could come out in years. However, companies are at greater risk if the ruling takes longer than they expect. This is because they may not have enough time to respond to court requests by 2030.
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