Climate Change: What Does It Mean for Lawyers?

Look around the world today, and the evidence of climate change is everywhere. Growing awareness of the crisis has placed climate change firmly on the agenda of individuals, states, intergovernmental institutions and private organisations.

The transition towards zero carbon emissions by 2050 requires a fundamental reorganisation of the global economy. As 2020 progresses, environmental activity is likely to increase as both public and private actors respond to this changing landscape.

The Student Lawyer has previously examined the growing trend of climate-based litigation. This article considers some of the wider implications of the climate crisis and what they could mean for lawyers and their clients.

Environmental regulation

Let us start with the obvious. Environmental legislation already exists in abundance. There are regulations concerning air and water quality, waste disposal, energy efficiency and environmentally responsible planning.

Many law firms already provide advisory services to clients seeking to navigate this complex regulatory landscape. Lawyers also monitor compliance and are prepared to litigate against, or defend, parties alleged to have breached environmental standards.

As the response to climate change develops, the body of climate-related legislation is likely to increase.

The Climate Change Act 2008 (2050 Target Amendment) Order 2019 amended the target contained in the Climate Change Act 2008 (CCA 2008), increasing the statutory 2050 greenhouse gas emissions reduction target from 80% to at least 100% below the 1990 baseline. This has placed additional pressure on central and local government to introduce laws and policies capable of encouraging or enforcing behavioural change towards that target.

Urban centres are increasingly considering clean air zones and restrictions on certain forms of transport. Sectors with significant carbon footprints, particularly transportation and retail, could face increased regulation if they fail to adapt rapidly enough to meet changing public expectations.

Clients operating in these sectors will therefore require expert legal advice to understand and comply with evolving regulatory requirements, while reducing the risk of enforcement action and liability.

The private sector could also play a leading role in driving change. The appetite for sustainable innovation is growing and, for many companies, corporate social responsibility is becoming more than a public relations exercise.

Rather than waiting for regulation, businesses are increasingly developing their own sustainability policies. The RE100 initiative, which includes many prominent businesses around the world, involves a commitment to 100% renewable electricity.

Strategies designed to reduce the carbon footprint of corporate offices are becoming increasingly common, while initiatives encouraging consumers to adopt more environmentally responsible practices are also growing.

Developing and implementing these policies can be complex. Because they frequently involve contractual, regulatory and governance considerations, there are clear opportunities for lawyers to become involved as trusted advisers.

Energy

The climate crisis presents both risks and opportunities for the energy sector.

Decarbonising the economy requires a move away from traditional forms of energy production. As demand for sustainable energy increases, traditional energy suppliers will be forced to adapt.

Exactly how these businesses will change remains open to debate, but there will undoubtedly be legal work involved.

New competitive pressures could result in mergers, acquisitions, financial successes and potential failures. Corporate and commercial lawyers will therefore have an important role to play.

Changes in consumer demand are also likely to encourage investment in new projects, creating a need for sound financial and legal advice. Meanwhile, the growth of clean technology will naturally create demand for intellectual property and technology, media and telecommunications lawyers.

The legal opportunities arising from these challenges are considerable.

Risk can also drive innovation. While traditional energy businesses adapt, new companies will emerge. The UK domestic energy market is already seeing the growth of alternative suppliers challenging the established major suppliers.

The search for solutions to the climate crisis will naturally encourage new and disruptive initiatives, some of which could experience rapid growth.

For lawyers, this creates opportunities not only in advising established businesses but also in supporting emerging companies as they develop, secure investment and navigate regulatory requirements.

Insurance

One of the largest sectors affected by climate change is insurance.

The figures illustrate the scale of the problem. Experts estimated that insured losses resulting from natural catastrophes in 2017 were approximately $140 billion. The Intergovernmental Panel on Climate Change has also warned of the potentially enormous economic consequences of continued global warming.

Insurers therefore have significant reasons to be concerned.

As extreme weather events cause flooding, fires and other forms of damage around the world, those affected will naturally seek to recover their losses. Insurance companies are also increasingly likely to become involved in climate-related litigation.

As more people and businesses suffer losses associated with extreme weather, the number of claims may increase, placing additional pressure on the insurance sector.

The consequences could ultimately be passed on to consumers. Those living or operating businesses in areas considered particularly vulnerable to climate-related risks could find that insurance becomes increasingly expensive or, in some circumstances, difficult to obtain.

The industry is already taking steps to mitigate these risks.

A report by the Unfriend Coal Campaign identified at least 35 large insurance companies that had begun divesting from coal projects. These companies represented approximately 37% of the industry's total assets. European insurers were identified as leading this movement, while US insurers were reported to be lagging.

The implications of this shift could be significant.

If coal projects become increasingly difficult to insure, the risks faced by investors will increase. This could encourage investment in newer and more sustainable forms of energy production.

Increased investment in sustainable energy would, in turn, result in new projects and increased commercial activity. That commercial activity would inevitably create the potential for further disputes, contractual issues and regulatory challenges.

The climate crisis is therefore forcing businesses to reconsider how they operate. Because of the interconnected nature of the global economy, these changes have far-reaching implications, many of which will require advisory, transactional or contentious legal practice.

Civil liberties

At the centre of all of this are people.

It is increasingly clear that extreme weather can have a direct impact on people's security, homes and livelihoods. The social implications of climate change are extensive.

As areas become unsafe or uninhabitable, the people living there may be forced to leave. Those displaced by environmental pressures may arrive in new communities with little or nothing and could require support from social welfare systems.

Law centres and legal aid lawyers may therefore have an important role in facilitating access to legal protection and support for people affected by displacement.

The response to climate change also raises questions about civil liberties.

The past few years have seen a marked increase in social action in response to the crisis. Protesters are increasingly willing to engage in civil disobedience to communicate the urgency of the situation.

This trend is likely to continue.

The legal response to such activity, together with the legal defences available to those involved, remains an evolving area. As society moves towards 2050, these issues are likely to become increasingly significant.

What does this mean for lawyers?

This article provides only a snapshot of some of the broader implications of the climate crisis. It is certainly not exhaustive.

Where there is action and change, there is a need for lawyers.

Whatever sector or area of practice you want to work in, whether private, public or third sector, commercial or social, contentious or non-contentious, climate change is likely to have an impact.

Being aware of that impact is essential.

The climate crisis is one of the defining issues of this generation, and its effects will be felt for years to come. For aspiring lawyers, understanding those effects is therefore about more than becoming an environmental lawyer.

Climate change has the potential to influence corporate transactions, energy projects, insurance claims, regulatory compliance, intellectual property, civil liberties and access to justice.

The lawyers best prepared for this changing landscape will not necessarily be those who specialise exclusively in environmental law. They will be those who understand how climate change intersects with the areas of law in which they choose to practise.

As the original article put it, “Where there are action and change, there is a need for lawyers.”

That remains the central lesson. The climate crisis is not simply creating a new area of legal practice. It is changing the legal questions that lawyers across the profession will be asked to answer.