What Does the International Court of Justice Advisory Opinion on Climate Change Mean for Environmentally Harmful Subsidies?
States now have a legal obligation to phase out subsidies that harm the environment. What steps can they take to reduce their legal risk?
Recommendations
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States should track and document all financial support that negatively impacts the environment. Transparency is key to planning effective subsidy reform and getting public buy-in.
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States should phase out subsidies gradually to minimize economic and social disruptions and take advantage of optimal timing—like advancing fossil fuel subsidy reform during periods of low oil prices.
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States should shift support to green solutions—for example, by reallocating savings from fossil fuel subsidy reform to alternative sources of energy and energy efficiency—and keep the focus on supporting people.
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States should coordinate efforts internationally to minimize political risks. COFFIS, for example, provides a supportive environment for countries to phase out their fossil fuel subsidies.
Governments spend over USD 2 trillion annually on subsidies that have negative impacts on climate and nature. Countries have made several commitments to phasing out environmentally harmful subsidies but so far have not lived up to those pledges.
The International Court of Justice (ICJ) Advisory Opinion on the Obligations of States in Respect of Climate Change made it clear that ending fossil fuel subsidies is not just a matter of political commitment, but a legal imperative. While states’ capabilities and available resources are considered when defining their responsibilities, they must do everything in their power to protect the climate.
Although the court’s ruling mentioned only fossil fuel subsidies explicitly, its reasoning can also extend to other types of climate-harmful subsidies, such as agricultural subsidies. To reduce their legal risk, states must act now to phase out all types of domestic financial support that threaten the environment.
This brief is part of a five-part series that seeks to help states understand their legal obligations under the ICJ Advisory Opinion and what actions they can take to ensure compliance. Other areas covered include climate adaptation, environmental impact assessments, international investment law, and multilateral environmental agreements.
Participating experts
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