Climate change is a global issue, and the most important challenge of our times. The damage wrought by rising levels of greenhouse gases in our atmosphere is well-reported at this point, as global temperatures continue to rise, and unstable weather patterns displace entire communities. Nation states around the world are united in the fight against the climate crisis, with annual COP summits guiding a global effort to slow the pace of climate change.
The Economic Toll
While the societal and environmental tolls are becoming increasingly evident to the average citizen, the economic toll of climate change is a little less obvious – but no less catastrophic to modern civilisation. According to a recent study examining the potential impacts of the mounting climate crisis on international economies, global GDP could fall by 4% by 2050 – with some countries risking their economy shrinking by a fifth.
This GDP shrinkage is attributed to the physical impacts of climate change on our world, with the loss of land and resources having a direct impact on the financial stability of economies around the world. This renders all the clearer the importance of global action on climate change, not just on the part of governments but also on the part of private enterprise.
Indeed, governments are likely to force the hand of the private sector, where industry is proportionally responsible for emissions figures. But new climate legislation will breed new challenges for businesses – challenges that will need to be met with legal counsel and direction.
Liability and Litigation
Firstly, and perhaps most obviously, are the challenges relating to compliance with new climate legislation. There are a number of ways in which proper failures to comply with climate law can harm a business; not only may sanctions result from discovery of illegal activity or emissions, but civil liability can also play a big part where local communities are affected.
Climate change lawyers will be required to advise businesses and corporations on the best routes to compliance, and the specific letter of the law surrounding new limits or benchmarks. Any emissions reduction strategies need to be backed up with robust and legally sound evidence, while subtle changes to existing legislation could quietly render a business non-compliant.
Transitional Change
For many businesses, particularly those in industries that face obsolescence in the face of climate change – petrochemicals and industrial livestock agriculture, to name two – transition to new products, processes or business models is necessary. This transition can cause new legal headaches, though, especially where new technological ground is being explored.
For example, the sustainability push will see businesses in the single-use plastics industry need to pivot to sustainable materials – requiring new research and development, and engagement with an entirely new industry to remain relevant. With this transition, legal responsibilities also shift; with new products and manufacturing processes come new requirements and restrictions.
