German court case ruling sets historic precedent for new approach to climate justice

A landmark court case between a Peruvian farmer and German energy giant RWE (RWEG.DE) concluded this week after nearly a decade, with the German court dismissing the claim without the possibility of appeal. Despite the outcome, the ruling is being hailed as a groundbreaking moment for global climate litigation as experts point out that the court’s reasoning lays crucial legal groundwork that could inspire a wave of lawsuits worldwide, holding corporations accountable for their share in global emissions and the environmental damage they cause—even across borders.

The case centered on Saul Luciano Lliuya, a farmer from the Andean city of Huaraz, Peru, which faces the growing threat of a glacial lake outburst flood. Lake Palcacocha, located above the city, has swelled to more than 34 times its 1970 volume due to melting glaciers linked to climate change, as reported on by Reuters. Lliuya demanded that RWE pay for 0.5% of the cost to build flood defences, reflecting its estimated 0.5% contribution to global carbon emissions since the industrial revolution, though the company has no operations in Peru. The amount sought was roughly $17,500.

The court rejected the claim, stating that the risk to Lliuya’s property—assessed at a 1% chance of damage over 30 years—did not meet the threshold for further legal action. However, in what climate advocates are calling a legal breakthrough, the court affirmed the general principle that companies can indeed be held liable for their role in climate change.

“This is a historic ruling,” said Noah Walker-Crawford of the London School of Economics’ Grantham Research Institute. “The court explicitly recognized a legal duty and corporate liability for emissions. No court in the world has done this in such clear terms before.”

“A new era of accountability”

Significantly, the court stated that civil courts in Germany can adjudicate climate cases and that German property law protections can extend internationally. This interpretation enables plaintiffs in other countries to bring climate-related claims against German corporations. The ruling also found that companies like RWE cannot rely on operating permits as shields from responsibility, especially when their emissions have measurable, harmful impacts.

The court traced corporate knowledge of emissions damage back to 1958, referencing US scientist Charles Keeling’s CO₂ monitoring and the 1965 US Presidential SAC report, which acknowledged the link between fossil fuel burning and atmospheric carbon accumulation. The German judges asserted that these early warnings provided sufficient foresight for companies to understand the dangers and assume responsibility for their emissions.

Crucially, the ruling dismissed the idea that the scientific complexity of climate change absolves companies from liability, stating that there is linear causation between emissions and environmental risk. According to the article, legal experts say this recognition could serve as a foundation for future transnational claims against high-emitting corporations globally.

In response, RWE stated that the decision does not establish a binding legal precedent under UK-style systems and noted that other German courts have reached different conclusions. The company emphasized that it has complied with all applicable laws and believes climate policy decisions should be handled politically, not in the courts.

Nevertheless, environmental advocates and legal scholars are calling the case a watershed moment. Though the specific claim failed, the article highlights that the broader implications of the ruling—affirming cross-border liability, corporate responsibility, and civil court jurisdiction—could reshape the legal landscape for climate accountability and usher in a new era of global climate litigation.

By Nazrin Sadigova