Shell and the Climate Case – Is the Shell Group the ‘Cheapest Cost Avoider’?

European Journal of Risk Regulation, Volume 15, Issue 1, March 2024, pp. 201-207

12 Pages Posted: 12 Aug 2022 Last revised: 27 Mar 2024

Date Written: March 11, 2024

Abstract

The Hague District Court in the Netherlands faced a novel tort law issue in 2021 in Milieudefensie et al v Royal Dutch Shell plc – namely, whether Shell is liable in tort for the reduction costs of carbon dioxide produced in the end use of energy-carrying Shell products. The civil lawsuit aims to make Shell (re)search for adequate substitutes so as to enable Shell’s customers to reduce their consumption of energy-carrying Shell products. It is argued here that Shell’s liability should be assessed within Guido Calabresi’s “cheapest cost avoider” framework.

Keywords: Climate Case against Shell, Dutch Friends of the Earth, climate change lawsuit, Paris Agreement, human rights, tort law, liability rule, Coase theorem, Guido Calabresi, cheapest cost avoider

JEL Classification: D23, D62, K13, K38, Q54

Suggested Citation

Kanning, Arnald J., Shell and the Climate Case – Is the Shell Group the ‘Cheapest Cost Avoider’? (March 11, 2024). European Journal of Risk Regulation, Volume 15, Issue 1, March 2024, pp. 201-207, Available at SSRN: https://ssrn.com/abstract=4185944 or http://dx.doi.org/10.2139/ssrn.4185944

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