What’s happening? In a pivotal legal victory, a Montana judge ruled that the state violated the constitutional rights of young citizens by failing to account for climate change impacts when approving fossil fuel projects. The case, named Held v. Montana, signifies a landmark moment in the battle against government support for fossil fuels. Amid intensifying wildfires and extreme heat, the court’s decision mandates that Montana must consider climate change implications when granting approval for fossil fuel ventures. The ruling reflects a growing global trend of litigation targeting both governments and corporations for their role in exacerbating climate change. Montana’s attorney general plans to appeal the decision. (New York Times)

Why does this matter? At the first constitutional climate trial in the US, the judge ruled in favour of climate activists, signifying a significant departure from government stances around the world which continue to heavily subsidise and incentivise fossil fuel investment. In 2020, for example, fossil fuel government subsidies reached $5.9 trillion or 6.8% of GDP, which is expected to climb to 7.4% of GDP in 2025. Future fossil fuel projects in Montana will now face heightened scrutiny when seeking approval, with the public’s right to a “healthy environment” a key consideration. This will not affect existing projects but may pose a significant risk to fossil fuel proposals and renewals.

Major opposition – Montana is a major exporter of coal and gas, and the ruling is expected to be met with fierce opposition. The state’s energy sector is reliant upon fossil fuel extraction with one-third of the energy mix powered by coal. Further, coal and gas extraction contribute significantly to the economy, sustaining over 26,000 jobs and providing $1.7bn of income to Montanans. The Montana attorney general’s office said the state would appeal, claiming the “ruling was absurd”. Following an appeal, the case would be sent to the state Supreme Court for a final decision.

The ruling is timely as the US recently suffered its worst wildfire event in over a century. On August 8, wildfires ravaged the island of Maui in Hawaii with the death toll standing at 106 and expected to continue rising. Climate change has been blamed for turning the island into a “tinderbox”.

Climate accountability – The Montana case is the most recent in a wave of climate litigation cases. In 2021, a Dutch court ordered Shell to cut emissions, making it the first time a company has been legally obliged to align its policies with the Paris climate accords, according to Friends of the Earth. More recently, a high court in London refused permission for a case brought forward by ClientEarth against Shell in July 2023. If approved, the case may have opened the door to companies being sued by investors for failing to manage climate-related risks.

In November 2022, 16 Puerto Rican municipalities jointly filed a class action lawsuit against major oil giants including BP, ConocoPhillips, Chevron, ExxonMobil, and Shell. Their allegation contends these corporations colluded to hide evidence of fossil fuels’ climate impact. These companies, responsible for over 40% of industrial greenhouse emissions from 1965 to 2017, allegedly invested billions in misleading marketing campaigns. The plaintiffs claim the firms were aware of the link between emissions and climate disasters like Hurricane Maria, referencing a 1988 Shell memo foreseeing “intense” Atlantic storms.