Netherlands court orders oil giant Shell to cut emissions | Hacker News Reader

Netherlands court orders oil giant Shell to cut emissions

bbc.com

71 pointsgingersnap24 comments

Previous discussion: https://news.ycombinator.com/item?id=27290508

> The company's defence is that if people feel progress towards cutting emissions is too slow, they should lobby governments - not Shell - to change policies and introduce financial incentives.

Do you agree with Shell's defence? If you do not, what's the role of government for the society?

sounds so logical. but i dont think it works that way, in NL at least. international agreements are considered legally binding, just like laws are or perhaps they even supersede them. the court might therefore hold a company or individual to comply with a treaty. shell's defense may not be valid, i think. still it's a black day for NL. we're still very much a petroleum economy.

What "international agreements" are we talking about? The ones for meeting climate targets, or the ones for ISDS (https://en.wikipedia.org/wiki/Investor-state_dispute_settlem...)?

Not (just) those. The Constitution has two articles (93, 94) that say treaties from 'people rights' institutions (like the UN, I guess) are legally binding and supersede national law of there is a conflict.

The argument made is that governments already changed policies.

For example, the 1992 UN Climate Convention said:

The ultimate objective of this Convention and any related legal instruments that the Conference of the Parties may adopt is to achieve, in accordance with the relevant provisions of the Convention, stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner

The European part of the Netherlands ratified that. It also ratified the 2015 Paris agreement.

Argument seems to be that is enough to require Shell to react soon and strongly.

I think I agree. I don’t see a need to introduce financial incentives. The government doesn’t pay companies who don’t dump chemical waste, persons who don’t steal, etc. either. It’s enough that it says those things shouldn’t happen. IMO, this case is similar (but more abstract). The government clearly said we must act soon; Shell knew that, and didn’t do enough.

You seem to be assuming that ‘financial incentives’ means subsidies or tax credits, but the financial incentives could be carbon taxes or other penalties instead.

it is too late for carbon taxes. Those might have worked 10 to 20 years ago. Carbon taxes could have allowed for a gradual shift away from fossil fuels, but we have about 10 years to cut our emissions by half. Considering most capital equipment (vehicles, power plants, etc...) have a 20-30 operating life a gradual transition is no longer feasible. Measures like banning sales of new gas powered vehicles, and mandating that all new power production equipment be carbon neutral are now table stakes for anyone that is serious about meeting targets.

AFAIK UN statements even ratified ones aren't laws, they're agreements that those countries will create laws to those effects.

Not sure what Shell is talking about, they recently won a Dutch offshore wind tender with zero subsidy, assuming they expect it to be profitable why shouldn’t they be able to expand on this?

The Dutch law allows for class action lawsuits where interests of the claimants are bundled. For example if a company would be poisoning local ground waters the citizens should be able to enforce their rights in the court. In this case the company is changing atmosphere in a way that endangers Dutch residents due to the fact that portion of the population lives below the sea level and climate change is likely to cause rise in the sea level.

> The court does not follow RDS’ argument that the claims of Milieudefensie et al. require decisions which go beyond the lawmaking function of the court. The court must decide on the claims of Milieudefensie et al.30 Assessing whether or not RDS has the alleged legal obligation and deciding on the claims based thereon is pre-eminently a task of the court. In the following assessment, the court interprets the unwritten standard of care from the applicable Book 6 Section 162 Dutch Civil Code on the basis of the relevant facts and circumstances, the best available science on dangerous climate change and how to manage it, and the widespread international consensus that human rights offer protection against the impacts of dangerous climate change and that companies must respect human rights.

BTW - In the Groningen, in the north of the Netherlands exploitation of natural gas reserves started causing earthquakes. Even the house I was renting in a town next to Groningen had to be inspected due to the earthquakes. The exploitation will be stopped in 2022 due to the harm. The Groningen gas field is operated by the Nederlandse Aardolie Maatschappij BV (NAM), a joint venture between Royal Dutch Shell and ExxonMobil with each company owning a 50% share.

Source: https://en.wikipedia.org/wiki/Groningen_gas_field

> After protests in Groningen because of the increase in induced earthquakes, whose event count shows an exponential growth in time, [5] the Dutch government decided on 17 January 2014 to cut output from the gas field and pay those affected by the earthquake a compensation worth 1.2 billion Euro, spread over a period of 5 years. The ministry said production would be cut in 2014 and 2015 to 42.5 bcm (billion cubic metres) and in 2016 to 40 bcm.[6]

> The State Supervision of Mines has brought forward that the production level should be cut back to 30 bcm to avoid the more severe quakes. Although it is technically possible to reduce Groningen's output to this level and still meet domestic demand, the ministry keeps production high (currently[when?] 39.4 bcm per year). Groningen officials are not satisfied with the measures. As of January 2015, no houses have been reinforced, nothing has been done about many seriously damaged buildings, and the risk of severe quakes, possibly resulting in collapsed buildings, injuries and death, is still too high.[7][8] In June 2016, the Netherlands' National Mines Inspectorate advised the Dutch Government to reduce production even further to 24 bcm per year.[9] On 23 September 2016 Dutch Prime Minister Mark Rutte confirmed that gas extraction from the northern Groningen gas field will be held at 24 bcm per year for the coming five years.[10]

> On March 29, 2018 the government announced it would shut down the gas extraction entirely by 2030 for safety reasons.[11][12]

> In September 2019, the Dutch government announced a further acceleration of the decommissioning of the field, stopping all regular production in 2022.

I do. This is a political, not legislative issue. This is actually another in a series of court cases where judges decide on broad political issues in the Netherlands. The big difference is that previous cases were against government, whereas this was against a company.

I mostly agree with the ideas behind most of these rulings. But it feels like broad interpretations of vague laws are being used to regulate outside of the democratic process. Regulation is the purview of the legislative or executive branch, not the judicial. Especially because the first 2 branches are (here in the Netherlands) democratically elected.

Consider (hypothetically) what would happen here if 90% of citizens were against this ruling. How would they revert it. Or should it not be revertable? I don't think it is revertable, and I think that is a massive end-run around democracy.

>Or should it not be revertable? I don't think it is revertable, and I think that is a massive end-run around democracy.

I didn't think about this but now that you mention it, it does seem like a judge regulating from the bench instead of lawmakers making laws or executives making policy.

Assuming the oil mostly comes from abroad, what's to stop shell from "achieving" the 45% cut by simply selling the production capacity, contracts, wells etc to someone else?

This is why we have judges. They can look at the totality of the evidence to determine if Shell has actually complied.

Unfortunately I don't think that will work. Assume shell stops producing in wells in Nigeria for example. Do you think that Nigeria will simply allow the well to sit unused? I really doubt that. At some point they would simply take it back and give it to some other oil concern to operate.

Given the precedent the same laws will apply to the new oil concern.

Of course Netherlands will not have power to enforce rules on fully foreign oil concerns not operating in the Netherlands.

But at least the demand from the Nederlands is appropriately reduced.

There is no single magical solution to this problem. Everyone needs to do their part.

> demand from the Nederlands is appropriately reduced.

You mean supply is reduced?

> There is no single magical solution to this problem. Everyone needs to do their part.

To reduce demand in your country:

1) Immediately apply significant increase of tax on all products that emit CO2 produced in your country. 2) Place tariffs on all imports from countries who do not apply similar taxes.

... What am I missing?

I'm referring to your example where the oil is still extracted. The Netherlands can reduce it's own fossil fuel extraction and reduce the demand for external fossil fuel extraction.

The tax scheme already exists and is implemented:

https://en.wikipedia.org/wiki/European_Union_Emission_Tradin...

The Netherlands is reducing and eliminating the internal fossil fuel extraction. Groningen gas field it is the largest natural gas field in Europe and the tenth-largest in the world and the extraction will be stopped in 2022.

https://en.wikipedia.org/wiki/Groningen_gas_field

But this one is actually more due to the earthquakes than just climate change.

Forgive me, but if the tax scheme already exists an appropriately taxes CO2 emissions, then what is the point of this lawsuit?

*Or rather, what is the point of the mandatory 45% cut? Shouldn't the taxes accomplish that already?

The point is that Shell is ignoring its obligations.

Apparently future taxes were not sufficient to change their practices right now. It is a fact stated by the company itself and the court opinion.

From the court ruling:

> The RI Annual Briefing 2020 contains the following warning (‘Definitions and cautionary note’), inter alia:

> Additionally, it is important to note that as of April 16, 2020, Shell’s operating plans and budgets do not reflect Shell’s net-zero emissions ambition. (...)

> Since 2016, the Dutch NGO Follow This, shareholder in RDS, has submitted various resolutions with the request to exchange the investments of the Shell group in oil and gas for sustainable energy. The RDS Board has consistently recommended its shareholders to vote against these resolutions for being contrary to the company’s interests. The RDS Board stated the following, among other things:

> “tying the Company’s hands to a renewables only mandate would be strategically and commercially unwise.”

> The majority of shareholders has voted against these resolutions. (...)

> It is also an established fact that RDS has set more stringent climate ambitions for the Shell group in 2019 and 2020 (see under 2.5.18). However, business plans in the Shell group still have to be updated in accordance with these climate ambitions, and a further explanation of its future portfolio and plans is forthcoming. In the court’s view, RDS’ policy, policy intentions and ambitions for the Shell group largely amount to rather intangible, undefined and non-binding plans for the long-term (2050). These plans (‘ambitions’ and ‘intentions’) are furthermore not unconditional but – as can be read in the disclaimer and cautionary notes to the Shell documents – dependent on the pace at which global society moves towards the climate goals of the Paris Agreement (‘in step with society and its customers’). Emissions reduction targets for 2030 are lacking completely; the NCF identifies the year 2035 as an intermediate step (see under 2.5.19). From this the court deduces that RDS retains the right to let the Shell group undergo a less rapid energy transition if society were to move slower. Moreover, RDS has insufficiently contested the standpoint of Milieudefensie et al. that RDS’ planned investments in new explorations are not compatible with the reduction target to be met. The Shell group’s policy, as determined by RDS, mainly shows that the Shell group monitors developments in society and lets states and other parties play a pioneering role. In doing so, RDS disregards its individual responsibility, which requires RDS to actively effectuate its reduction obligation through the Shell group’s corporate policy.

Okay, it seems obvious then that the taxes are not high enough given the outlined goal then.

Emissions Trading Scheme is actually a very clever tax that self adjusts. EU is putting a cap on the emissions and the allowed emissions are auctioned, so that companies must compete for smaller and smaller pool of allowances. If companies do not reduce emissions there is no limit to how high taxation can go, as the tax rate is market driven with limited supply of allowances.

I think Shell may be simply in denial of the reality and/or may be hoping that political back channels will preserve status quo.

The judgment is here: https://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:... (English version)

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