National Fossil Fuel Companies and Climate Change Mitigation under International Law
44 Syracuse Journal of International Law and Commerce 1, 55 (2016)
52 Pages Posted: 9 Feb 2017 Last revised: 21 Jun 2017
Date Written: November 1, 2016
Politics and research on climate change mitigation have often focused on the regulatory function of the state. This article explores the function of the state as an investor and shareholder, taking the particular example of the fossil fuel sector. National Fossil Fuel Companies (NFFCs) are state-owned enterprises that control most of the production of petroleum, gas and coal, possess most of the reserves, and leverage most of the investments, thus forming an integral part of the superstructure of the global carbon economy. Occasionally these companies are so deeply enmeshed with their owner governments that their conduct can be directly attributed to the state, possibly entailing state responsibility under international law when they cause excessive greenhouse gas emissions. But even when the corporate veil precludes attribution of NFFC’s actions to the state, this article suggests that certain obligations arise from general international law and from the specific regime created by the UN Framework Convention on Climate Change in relation to state ownership policies in the fossil fuel sector. Thus, although not advocating for general divestment, we suggest that states should – and are increasingly required to – use their leverage as investors and shareholders to facilitate a transition to a greener economy.
Keywords: international law, climate policy, state ownership, climate change, mitigation, national oil company
JEL Classification: F18, K22, L32, K33
Suggested Citation: Suggested Citation