Reparation for Climate Change: The Successes and Limits of Litigation

Sara

L.Seck

Chapter 13: Can Monetization of Loss and Damage Contribute to Climate Justice? A Relational Approach

1.Introduction

In this contribution, I reflect on the possibilities and limitations of reparations for climate change through what I describe as a “relational” approach to climate justice. I will draw upon three key bodies of previous work to inform this reflection. First, in introducing “critical” perspectives and climate justice, I will consider previous work¹ that draws upon intersectional feminist and vulnerability theories, as well as decolonial approaches and Indigenous environmental justice, to propose that at the center of the climate injustice challenge is the bounded autonomous individual of liberal thought that serves as both a framework for dominant approaches to legal analysis, and a construct used within such analysis. Second, I will define the scope of climate loss and damage informed by this relational approach and contributions to the 2021 Research Handbook on Climate Change Law and Loss & Damage² that I had the privilege of co-editing with my late colleague Meinhard Doelle. I will then turn to the key question, whether monetization of climate loss and damage can contribute to climate justice. Here, I will combine insights from relational approaches and the Handbook with insights that emerged from a co-authored article³ that considers the relationship between the social cost of carbon as — S. 272 —used in regulatory rule-making and the monetization of reparations for climate loss and damage. Throughout, I will illustrate the possibilities and limitations of reparations for climate change with reference to the model scenarios prepared to guide our contributions.⁴ In this way, the chapter will reveal how the bounded autonomous individual infuses many of the real case studies discussed throughout this volume, and may be read as a reflection on dominant narratives of climate litigation and reparation.

2.‘Critical’ Perspectives and Climate Justice

a.Intersectional Feminist and Vulnerability Theories

The writings of intersectional feminist and vulnerability theorists⁵ shed light on the unacknowledged dominance of the bounded autonomous individual of liberal thought in domestic and international legal analysis, including as a construct that informs dominant understandings of the state, the corporation, the worker, and the individual holder of human rights. Yet, the presence and influence of the bounded autonomous individual is generally unacknowledged. As a result, legal analysis assumes as neutral an image of individuals, workers, corporate actors and the state that celebrates their independence and self-reliance, safe behind impermeable boundaries that separate them from other humans and the “natural world.” Yet, the truth is that all are socially and ecologically embedded: all individuals are dependent upon nurturing social relations and earth systems that enable them to be autonomous, with boundaries better understood as porous than impermeable. The same can be said for workers, corporate actors and the state. However, as will be examined next, even as all are socially and ecologically embedded, not all individuals, workers, corporate actors or states are the same — account must also be taken of — S. 273 —differences in power and histories that have rendered some more at risk than others, and provided others with greater power and so greater responsibility to act.

b.De-colonial Approaches and Theories of Indigenous Environmental Justice

As a legal scholar at Dalhousie University in Canada, my obligations according to the Calls to Action of the Truth and Reconciliation Commission include working towards the implementation of the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP)⁶ and supporting the resurgence of Indigenous laws.⁷ The land acknowledgement of my university states that “Dalhousie University is located in Mi’kma’ki, the ancestral and unceded territory of the Mi’kmaq people. We are all treaty people.” This message is a daily reminder that the ‘civilizing mission’ of international law must be overcome: while dominant approaches to international legal analysis treat states as the primary if not only actor of importance, the failure to treat Indigenous nations as equal to nation states in international law has justified a legacy of injustice against Indigenous peoples in Canada over many years, including attempts to erase knowledge of Indigenous languages, traditions and laws. The legacy of this injustice endures and overcoming it and other colonial and patriarchal histories with which Canada is intertwined necessitates an awareness of difference together with a commitment to the revitalization and resurgence of Indigenous laws, including ecological laws.

The writings of many Indigenous scholars, including Indigenous feminists,⁸ reveal that each Indigenous nation has a distinct framework of Indigenous laws. From these Indigenous legal orders a wealth of worldviews and theories emerge that collectively reflect reciprocal kinship relationships with the natural world, future generations and ancestors. Respect for Indigenous — S. 274 —laws through implementation of UNDRIP is therefore an essential piece of the climate justice puzzle, so as to ensure that Indigenous peoples can fulfill their reciprocal responsibilities to mother earth as called for by their own laws, with the support and in harmony with settlers who are equally part of treaty relationships.

c.Revealing DSEERI

I have identified the heart of the climate injustice challenge as the prevalence of the bounded autonomous individual of liberal thought which serves as both a framework for dominant approaches to legal analysis, and a construct used within such analysis. I have most recently concluded that the path forward requires deliberate and conscious re-imagining of legal doctrines and constructs to reflect an alternate image: that of the Differentially Situated Ecologically Embedded Relational Individual (DSEERI).

DSEERI makes explicit the embeddedness of social and ecological relationships, while also acknowledging the importance of accounting for difference. Beyond respect for reciprocal responsibilities and Indigenous laws, DSEERI must account for all intersectional differences⁹ that increase risk in the face of climate harms, as well as those that point to a heightened responsibility to act due to differential power. Increased risks may arise due to what are often socially constructed as innate vulnerabilities (such as those faced by children or persons with disabilities) while for others increased risk may be the consequence of historic and ongoing discrimination that renders certain marginalized individuals and groups more vulnerable (such as Indigenous communities, those living in poverty, and those experiencing racial or gender discrimination or both).¹⁰

3.Climate Justice and the Scope of Loss and Damage

Attention to DSEERI has implications for understanding the scope and definition of climate loss and damage for which reparations are due. In the Handbook, we define loss and damage broadly as any impact that arises from human - — S. 275 —induced climate change and that has not been avoided due to mitigation and adaptation efforts combined.¹¹ We further define “loss” as “permanent or irrevocable” while “damage” is “reparable or recoverable.” Further distinctions must be made between economic and non-economic forms of loss and damage with implications for monetization as will be discussed below.

There are important temporal and spatial dimensions to the scope of climate loss and damage. For example, one key question in assessing loss and damage is when to start the clock — from what temporal baseline should loss and damage be measured? If loss and damage is understood primarily in relation to human-induced increases in GHG emissions and decreases in carbon sinks, then the starting point may be the industrial revolution, although some might argue that alternately it should be measured from the time at which global efforts began to reduce emissions.¹² But this may also depend on whether the question is being asked in the abstract, or whether it is being asked in the context of climate litigation brought by a particular plaintiff (whose harm may be measured from a later starting point) against a particular defendant (whose contribution to climate change may also have begun at a later date) and the possibilities and limitations of the chosen forum.¹³ For example, Scenario 10 envisions a class action suit filed in US courts by members of the Samí community against US-based multinationals ExxonMobil and Chevron for contributing to GHG emissions with knowledge of the links to climate change. Yet if attention is paid to the most recent emissions tracing data about Carbon Majors Entities, two nation states (China and the former Soviet Union) and a stateowned entity (Saudi Aramco) take the first three spots in terms of total emissions, with Chevron and ExxonMobil in fourth and fifth place, and another state-owned entity (Gazprom) placing sixth.¹⁴ Arguably the measure of loss and damage and the starting of the temporal clock would differ depending on which of these defendants were being brought to justice in light of their differing histories and power, and which defendants to target will depend at least in part on the forum in which the litigation is brought. Yet the loss and damage experienced by the plaintiffs would be the same.

A different temporal dimension might be to ask how far into the future climate loss and damage should be measured, particularly as the extent of these harms may be dependent upon mitigation and adaptation efforts still to come. In Scenario 1, a group of elderly people seek a just satisfaction award as reparation for damage they will experience against a state that has failed to adopt adequate mitigation measures. Yet a very different measure of mitigation and adaptation efforts would be required if the plaintiffs were children and youth, and the litigation were also brought on behalf of future generations as is frequently the case.¹⁵

The importance of viewing loss and damage through an equity lens that accounts for responsibilities to children and future generations, as well as elders and ancestors is consistent with notions of intergenerational equity and is embedded in many Indigenous cultural understandings of generational responsibilities.¹⁶ Scenario 5 reflects this vision in a hypothetical case brought against Mexico before the IACtHR by Indigenous peoples, peasants and rural dwellers, on their own behalf and that of future generations.

An equity lens also highlights intragenerational equity responsibilities for loss and damage existing today, embedded in the climate regime through the principle of common but differentiated responsibilities and respective capabilities, and pointing to the importance of accounting for the spatial dimensions of climate harm sources and impacts.¹⁷ Scenario 7 both raises and misses spatial equity dimensions. In this hypothetical case brought by Peru against Brazil before the ICJ, it is alleged that Brazil has failed to prevent forest fires and illegal deforestation despite being aware of their devastating climate effects, and that Peru must be compensated for harm to its environment due to Peru’s high susceptibility to natural disasters arising from climate change. Yet Brazil and Peru are arguably economically similar states, and one wonders why Peru has chosen to seek remedy from Brazil for its failure to preserve a carbon sink, rather than against a more economically powerful state with high per capita GHG emissions. There is also the spatial dimension of production to consider. What responsibility should be borne by states that purchase products containing minerals mined in Brazilian rainforests (whether or not for green energy solutions), or agricultural products (whether soy or beef) that are the real cause of the destruction of the Brazilian Amazon? What responsibility — S. 277 —must be borne by multinational enterprises and state-owned enterprises that perpetuate irresponsible production and consumption patterns with implications for vital carbon sinks like the Brazilian Amazon? Beyond this, the scenario raises the question of who should be understood to be legal guardians of the Amazon, and to what extent any remedy that fails to account for Indigenous self-determination and stewardship perpetuates climate injustice.

Scenario 4 also raises spatial equity concerns that raise the problematic image of the bounded autonomous state that DSEERI aims to challenge. In this scenario, a communication has been brought against a State party under the Optional Protocol to the ICESCR alleging a violation of the right to “continuous improvement of living conditions” due (presumably) to the climate effects of the State’s GHG emissions. Yet the claim has been brought on behalf of both those within the territory of the respondent State, and affected individuals outside the State’s territory, all of whom are to have access to a loss and damage fund. The question of how to assess state human rights duties beyond borders for climate harms will be increasingly before courts,¹⁸ yet too frequently courts exclude claimants from outside State territory. The Dutch court in the Milieudefensie case provides a notorious example with its failure to include a Dutch-based NGO as a member of the class action because its mandate was to care about climate impacts in Africa, which were not seen as suitable for “bundling” with the similar interests of present and future generations of the Netherlands.¹⁹

Different spatial insights emerge from a racial capitalism lens which suggests that loss and damage should be viewed through a life cycle approach that would also account for the social and environmental harms experienced by those living in “sacrifice zones” of the global fossil fuel-dependent economy, including the poisoning of their land, water and air, dispossession and displacement.²⁰ Indigenous peoples have also expressed different understandings of — S. 278 —the nature of loss and damage and its causes, with reconciliation and new political and cultural relations that support self-determination seen as an essential component of settler state responsibility so as to move away from and remedy the consequences of colonial and capitalist industrial structures imposed on Indigenous communities, lands and waters without consent.²¹ Scenario 2 both touches on and misses some of these racial capitalism and Indigenous self-determination concerns. It contemplates a case brought before the ECHR against Norway by Sámi community members who allege that Norway’s granting of new fossil fuel licenses contributes to climate change and so violates their cultural rights. They seek reparations from Norway for adverse impacts on their culture following the HRC’s Billy et al v Australia.²² Scenario 2’s focus on climate change reparations thus presents what might be described as a typical climate loss and damage case, yet leaves aside questions as to whether Norway’s historic granting of fossil fuel licenses and exploitation of fossil fuels has created local sacrifice zones of environmental degradation that have poisoned land, air and waters of Sámi communities or others, leading to dispossession and displacement, and infringing Indigenous rights of self-determination due to a lack of free, prior and informed consent. What historic responsibilities does Norway have towards communities whose ways of life have been poisoned by fossil fuel extraction in the past? A racial capitalism lens on climate loss and damage would view this responsibility as equally important to the climate responsibility arising from the granting of contemporary licenses. Similarly, attention must be paid to contemporary practices of siting green energy projects on Indigenous lands without consent and in violation of cultural rights.

An eco-centric equity dimension must also be accounted for in climate loss and damage.²³ The concept of DSEERI recognizes that all humans are embedded in ecological systems and so a fulsome attention to what it means to be human and to hold human rights must necessarily account for harms to earth systems, while creating challenges in terms of who has standing to bring legal claims. Recognition and respect for “rights of nature,” often but not always linked to the revitalization of Indigenous ecological laws and reciprocal responsibilities, must also be accounted for in defining the scope of loss and damage through a climate justice and DSEERI lens, and may provide a response — S. 279 —to the legal standing challenge. Scenario 3 contemplates a group of farmers in Sicily whose agricultural lands are impacted by climate-related water crisis and who argue Italy has violated their right to property. They seek remedy in the form of mitigation and adaptation measures as well as compensation for loss in the value of their lands and lost profits. This scenario well illustrates the ease with which standing is often granted to those with property rights, yet remedy is then often limited to the values associated with the human use of the land, rather than the cost that would be incurred for a fulsome restoration of the damaged ecological systems.

4.Monetization and Climate Justice

This final part will consider the core question of whether, and if so how, different kinds of climate loss and damage could be monetized. Discussions of climate loss and damage often distinguish economic from non-economic loss and damage.²⁴ Also considered is the further question of whether this could be achieved in a way that is consistent with climate justice through a DSEERI lens.

a.Monetization as Alternative to or Proxy for Climate Justice

Monetization can never be a truly meaningful alternative to permanent or irrevocable loss, and so cannot fulsomely serve as a proxy for climate justice. An example of this may be found in situations of cultural loss such as the harm experienced by Inuit as a result of the loss of sea ice and the cultural practices dependent upon it that are integral to what it means to be Inuit.²⁵ Nevertheless, in a position paper drafted for COP28, the Inuit Circumpolar Council (ICC) called upon all international actors to advance recommendations that all climate change work be based on a human rights foundation, and that direct pathways be created to enable access for Indigenous Peoples to equitable — S. 280 —climate finance including the Loss and Damage Fund.²⁶ The need for financial support to enable “Inuit-defined and -led climate change adaptation and mitigation strategies” so as to ensure capacity to “address present and future challenges” is highlighted by the ICC, along with concerns over the “false dichotomy between the developing and developed world of global politics that excludes Indigenous Peoples from many funding sources.”²⁷ Hearing these concerns and effectively responding to them requires a critical engagement with the idea of DSEERI so as to overcome prevalent assumptions about the nature of the state in international relations and international law.²⁸

Ultimately, while monetization cannot fulsomely serve as a proxy for climate justice in cases of cultural loss, this does not mean that those who have experienced cultural loss should not nevertheless be supported financially to build capacity to prevent further cultural loss, or to revitalize alternate cultural practices, or simply as a means of compensation. It is common for legal systems to provide monetary remedies for permanent or irrevocable loss (eg loss of a limb, or loss of life), even if this can never truly be adequate. Scenario 5, the case against Mexico brought by Indigenous peoples, peasants and rural dwellers, well illustrates this conundrum as the plaintiffs seek both economic reparations for individual harms, and collective, community-wide reparations, although there is no mention of how the communities would anticipate using such reparations.

Monetization for ecological loss similarly cannot fulsomely provide an alternative to climate justice.²⁹ Nevertheless, to the extent that those with standing to bring claims of ecological loss believe that monetization can serve a useful purpose — perhaps contributing to climate mitigation and adaptation efforts that would better prevent avoidable future loss of the same ecological system, or contributing to ecological restoration efforts —, monetization must certainly play a role in remedy. Several scenarios hint at the potential for monetization of ecological loss, perhaps especially scenario 6 involving a hypothetical case before the ITLOS in which a small island state seeks full reparation with interest against the flag state for damage to the marine environment caused by an oil tanker spill. Here, an “ecosystem goods and services approach” to compensation is called for on the basis that restitutio in integrum may not be possible; yet ultimately clean-up and restoration of the marine — S. 281 —environment must be the final goal. Presumably the aim of valuation of the ecological system for compensation purposes here is to seek sufficient funds to cover the cost of ecological restoration as well as compensation for what cannot be restored. The Peru–Brazil scenario 7 before the ICJ also offers food for thought as Peru seeks compensation for harm to its environment, yet the harm to Peru arises from the destruction of key ecological systems in Brazil. Aside from a declaration that Brazil has violated international law, the case does not account for the need for ecological restoration of the Brazilian Amazon, illustrating the complexity and ultimately unsatisfactory promise of such a case.

Where the situation is one of recoverable or reparable damage (as distinct from permanent or irrevocable loss), monetization may play a more central role and one that could be consistent with climate justice. This is despite the fact that monetization of what has been (lost or) damaged is impossible due to subjective values with regard to loss of cultural identity, life or ecosystem functions.³⁰ Nevertheless, monetization may from a pragmatic perspective assist in meeting international law obligations of restitution, compensation and satisfaction, including funding of restoration of a damaged environment and compensation for costs incurred by communities or the state as a result of such damage.³¹ However, monetization may differ depending on whether the valuation technique is designed for the purpose of financial compensation as distinct from “in-kind activities to remediate and restore” harm.³²

b.Monetization as Perpetuation of Climate Injustice

There is no question that legitimate concerns arise that monetization of noneconomic loss and damage perpetuate the problematic practice of alienation that is the basis of the capitalist system (and invokes the bounded autonomous individual), and so inevitably undervalues that which has non-monetizable value, whether for cultural, moral, ecological, or other reasons.

To overcome this concern, Cymie Payne argues that monetization (valuation and compensation) are “best used as tools to optimize future ecological — S. 282 —and social conditions, not to recover the past. Valuation’s chief contribution, from this perspective, may be to scope and scale transformative and curative interventions.”³³ One way in which monetization is already being used in a preventative manner in the US and Canada is through the use of the social cost of carbon in regulation-making and decision-making processes.³⁴ The social cost of carbon is an estimated dollar value that is designed to represent the net effects associated with incremental changes in carbon emissions, with similar metrics developed for other GHGs. Expressed as a dollar value per metric ton of carbon dioxide, the social cost of carbon is generally used to calculate the benefits of a proposed government action that is designed to reduce emissions and is increasingly used in regulatory rule-making.³⁵

Pragmatically, if monetization is being used to inform decision-making, then monetizing all loss and damage, even if inevitably inaccurate, is important for better decision-making. However, to the extent that decisions are made based on grossly inadequate monetization, climate injustice will be perpetuated. Challenges in determining a “true” social cost of carbon include questions relating to how to account for tipping points, non-monetary damages and irrecoverable loss, among many others.

Scenario 9 provides an example of litigation in which a hypothetical shareholder brings an action before Swiss civil courts alleging that a major financial institution has failed to disclose and account for risks arising from its financing of GHG-intensive investments. While it is unclear what remedy the hypothetical shareholder is seeking, this case illustrates the importance of distinguishing financial risks (that might fall upon the shareholder) from monetized climate risks that a “true” social cost of carbon would ideally capture (risks that would be borne by the most vulnerable people and ecosystems around the world).

c.Monetization and the Promise and Limits of Climate Litigation for Global Climate Justice

The social cost of carbon emerged following a 2008 decision of the United States Court of Appeal that held the “cost-benefit analysis underpinning new fueleconomy standards ought to have incorporated a monetary value for carbon emissions” as the value of emissions reduction “is certainly not zero.”³⁶ This suggests that climate litigation may be used to promote monetization as a — S. 283 —means to prevent future harm, as well as to remedy past harms through monetary compensation or remediation funds.

As noted above, financial compensation can play an important role in situations of irrecoverable loss and reparable damage, even when it cannot return those harmed to the situation they were in before the loss or damage occurred. However, important distributional concerns arise in climate litigation, with the ability to go to court and seek monetary compensation being unequally spread across the globe and in no way linked to moral or even legal entitlement.³⁷ Scenario 8 illustrates this challenge, as four residents of an Indonesian island have brought a civil claim against Holcim, a Swiss-based manufacturing company, seeking climate adaptation costs and compensation for climate loss and damage suffered.³⁸ Yet it is unrealistic to imagine that every individual in the world who needs access to climate adaptation funds and compensation for loss and damage would be able to go to court against Holcim or other carbon major companies, or that sufficient funds would be available if they did before these corporate enterprises — and stateowned enterprises — went bankrupt. Related concerns arise in relation to the newly established yet underfunded Loss and Damage Fund. This disconnect between the funds in fact needed to equitably address loss and damage and the funds that deserving plaintiffs might in reality be able to access is a major limitation of climate litigation for climate justice.

However, an innovative approach to global remedy in climate loss and damage litigation has been proposed by Mary Christina Wood who envisions atmospheric recovery litigation against carbon majors in domestic courts.³⁹ She argues for remedy in the form of funding for a global sky cleanup that would support natural climate solutions led by Indigenous communities, farmers and foresters engaged in restoration projects that also stimulate local economies while enhancing climate adaptation and biodiversity recovery.⁴⁰ Wood situates her exploration of this idea within the legal context of the US, and envisions atmospheric recovery litigation as a complementary strategy to atmospheric trust litigation which aims to achieve decarbonization.⁴¹ She draws upon the ancient public trust principle recognized by courts in many — S. 284 —countries around the world to argue that governments, as trustees, must protect public trust resources including the atmosphere.⁴² Wood envisions sovereign co-trustees, whether national, sub-national, or Indigenous, sharing a responsibility to protect the atmosphere, and so being granted standing to sue fossil fuel companies for atmospheric damage.⁴³ An essential aspect of the remedy sought would be a regional plan providing a framework to organize and select drawdown projects, with damages deposited in a “Sky Trust” set up by the co-sovereigns, or a trust set up by the judiciary.⁴⁴ While the local benefits of such a remedy would not be equally spread, the global benefits of sky cleanup would be one way to overcome some of the climate injustice that is an inevitable part of (domestic) climate litigation efforts, a point that Wood highlights.⁴⁵ While Wood contemplates recovery efforts involving terrestrial ecosystems, there are good reasons to extend this thinking to marine ecosystems, especially given that the climate Advisory Opinion of the ITLOS specifically identifies state obligations for restoration of marine ecosystems and habitats under Article 192 of the United Nations Convention on the Law of the Sea.⁴⁶

5.Conclusions

As climate litigation emerges across the globe as a tool to seek remedy for climate loss and damage, it is essential to cast a critical eye on the details of claims to avoid perpetuating climate injustice. In this chapter I have argued that a relational lens that is informed by intersectional feminist and vulnerability theories as well as de-colonial approaches and consciously made explicit through the image of DSEERI can assist in challenging dominant legal doctrines and constructs that inform current approaches to climate litigation. Bolstered by the work of contributors to the 2021 Research Handbook on Climate Change Law and Loss & Damage, I have critically engaged with the scenarios, and contemplated alternatives that I argue are more in keeping with — S. 285 —climate justice. My reflections have included consideration of both the possibilities and limitations of monetization for climate reparations. Ultimately, my hope is that such critical engagement and foregrounding of DSEERI may contribute to a better alignment of climate litigation and climate justice. Yet real challenges will continue to face litigants who adopt a DSEERI lens in forums that were designed to serve bounded autonomous individuals, whether individuals, or states.