Introduction
On November 12, 2024, the Hague Court of Appeal overturned the judgment of the Hague District Court in Milieudefensie et al. v. Shell. While some elements of the legal reasoning remained aligned with the District Court’s decision there were notable shifts. For instance, the Court of Appeal reaffirmed that Shell has a responsibility to take measures to counter dangerous climate change. This obligation stems from both international human rights frameworks (para. 7.17) and the unwritten social standard of care (para. 7.24). The Court recognized this responsibility as both retrospective and prospective, acknowledging that companies like Shell have significantly contributed to climate change and possess the capacity to address it (para. 7.24). However, the Appeal Court diverged from the District Court by refraining from imposing a specific percentage reduction for Scope 1, 2, and 3 emissions (paras. 7.63-7.111).
In this analysis, I focus on the Market Substitution Argument, which suggests that the fossil fuel production needed to satisfy market demand will be provided by another company if the sued company does not supply it (Laniyan 2024: 47). This argument was accepted by the Court as the reason to negate the sufficient interest of the applicants to claim reduction for Scope 3 emissions— those associated with the end-use of Shell’s products, such as fuel combustion by consumers. I argue that this reasoning undermines the justiciability of Scope 3 emissions cases by imposing an unreasonably high causal standard, which overlooks the collective nature of climate change emissions and the unique features of this tort case.
A Brief of the Judgment on Scope 3 Emissions
Regarding scope 3 emissions, the Court’s reasoning had three key arguments which can be summarized as follows:
First, the Court noted that the general requirement of a 45% reduction in emissions by 2030 across all sectors does not automatically translate into an obligation for Shell to achieve a 45% reduction in its own emissions (paras. 7.68-7.81). This is because the reduction target applies not only to oil and gas but also to coal, which has a higher carbon intensity. As a result, if Shell supplies gas to companies transitioning from coal, it could lead to an increase in Shell’s Scope 3 emissions. However, such a shift might still contribute to an overall decrease in global CO₂ emissions.
Second, the Court decided that setting a reduction target for only oil and gas was not possible because the calculations were made based on Integrated Assessment Models, which are characterized by divergent figures among experts and a lack of stability (paras. 7.82- 7.96).
Third, the Court dealt with the effectiveness of the obligation to reduce Scope 3 emissions (paras. 7.97-7.110). On this point, the Court analyzed the influence of Shell’s actions in reducing emissions on both the demand side and the supply side. While the Court rejected Shell’s market substitution argument on the demand side (see here) it accepted this argument on the supply side. It is on this latter point that I want to focus. The Court determined that, to evaluate whether the claimants met the “sufficient interest” threshold under Article 3:303 DCC, it was necessary to compare the situations with and without granting the claim. If no meaningful difference exists between the two scenarios, granting the claim would provide no benefit to the applicants, thereby demonstrating a lack of the required interest. The Court agreed with Shell in that the obligation to reduce Scope 3 emissions can be met in two ways: either through producing oil and gas or by reselling already-produced fossil fuels. Consequently, removing Shell from the value chain would make no difference, as other companies would simply step in to resell the already-produced fossil fuels. On this basis, the Court concluded that Milieudefensie et al. had the burden to establish a causal relationship between limiting Shell’s sales and reducing emissions, which, the claimants had failed to do.
I believe that the Court’s acceptance of the Market Substitution Argument overlooks the importance of adopting a “tailored approach” to climate change cases, as seen in Verein Klimaseniorinnen and others v. Switzerland (para. 422). This case is not another tort-law-case. In climate change cases harms are more complex and that should suggest the possibility to relax the demands of a precise match between the individual act and the harm for finding liability (Hormio 2023: 3). I will explain why this case represents a unique tort law scenario, highlighting the risks associated with accepting the Market Substitution Argument.
Climate Change as a Collective Harm Problem
Climate change can be understood as a collective harm problem (Hormio 2023: 4), wherein multiple agents act in ways that collectively cause harm, yet no single agent appears to make a significant difference on its own (Nefsky 2019: 2). In climate ethics, this problem has been studied for the challenges it poses in identifying reasons to act or to refrain from acting in such a manner. Understanding the case at hand under these lens raises the question of whether it is reasonable to argue that a claimant lacks sufficient interest in bringing a case against a company for emission reductions simply because the harm would still occur even if the claim were granted. Put differently, the legal question is whether the collective harm problem inherent in climate change renders claims against corporations’ Scope 3 emissions non-justiciable.
Climate change is, however, not the only example of the collective harm problem. A useful analogy is provided by Farber (2008: 390): a group of polluters discharges a chemical into a lake. The pollution from any single polluter is sufficient to ruin the lake, killing all aquatic species. Each polluter argues they should escape liability because their individual contribution was marginal, as the lake would have been poisoned regardless of their actions. Should the polluters escape responsibility for that reason?
This type of question has been solved, for instance, in U.S. tort case law (see Boeing Company v. Cascade Corporation, para. 1184), which holds that in the special case of causal overdetermination—where either polluter’s actions alone would have resulted in the same response costs, and both are equally blameworthy—both polluters are deemed to have caused the response costs. In such cases, pollution is considered to have “caused” the response costs under the statute, even if it was not a sine qua non.
A Preemption Case
The case at hand differs slightly from overdetermination cases found in collective harm scenarios. Instead, it exemplifies preemption, where one cause is blocked or preempted by another that takes precedence (Dyrkolbotn 2017: 3). Here, Shell’s reselling of fossil fuels, leading to increased emissions, preempts the hypothetical company “X” from reselling the same fuels and producing emissions. In such cases, the key question is which cause takes effect while excluding the other. To establish this, evidence excluding hypothetical company “X” as the cause of the emissions must be provided (Dyrkolbotn 2017: 10). The proof is straightforward: Shell’s reselling of fossil fuels directly generates Scope 3 emissions, and this action occurs temporarily before hypothetical company “X” could act. In a counterfactual scenario where Shell is not part of the value chain, as the Court is considering, hypothetical company “X” would indeed cause the emissions. However, this counterfactual reasoning is irrelevant because, in the actual world, Shell’s actions are sufficient to cause the emissions.
Furthermore, Shell’s role as the preempting cause highlights an important issue. If Shell’s argument—that emissions would continue because other actors would replace them in the value chain (the Market Substitution Argument)—is accepted, then the same reasoning must apply equally to other companies. Any company, like Shell, could assert that emissions will persist due to substitution by others. This would lead to an endless cycle where every polluter can deny the effectiveness of the obligation to reduce Scope 3 emissions, rendering accountability impossible.
The Court’s demand for claimants to prove a causal relationship between sales limitations and emissions reductions (as outlined in para. 7.106) through a but-for argument sets an unreasonably high bar. Demonstrating that another company would not generate the same emissions as Shell would require complex economic modeling—or speculative predictions about the future. Such a standard not only exceeds practical evidentiary requirements but also misunderstands preemption cases. Preemption does not require proving a sine qua non (but-for) relationship. Requiring this standard in preemption cases makes it nearly impossible to establish causation.
Conclusion
Proving the causal link via the but-for argument simply does not fit well in this type of cases. Human rights courts like the ECtHR have solved this problem by rejecting the possibility form states to bring the but-for test which means that if the state would have not committed an act (or omission) then the harm would not have happened (see here and here, para. 99). The ECtHR has stated that requiring to prove this from victims of human rights violations would not only be too demanding but impossible to prove.
The Hague Court of Appeal is a civil court and not a human rights court. However, this does not excuse the court to understand which accounts of causation fit tort cases that present preemption situations. Cases like this are hard for the judges, but the truly lawyer must “adventure himself with philosophers in the logical and metaphysical controversies that beset the idea of cause” (Pollack 1901: 36).
