Court imposed sanctions in the event of non-compliance with obligations to reduce greenhouse gas emissions
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As Shell has been ordered to reduce CO2 emissions of the Shell group's activities by a net 45% by 2030, compared to its emissions in 2019, this may not look like a question that requires an immediate answer. However, although 2030 may seem quite far away at this moment, given the far-reaching consequences that the reduction obligation may have for RDS, that may in fact prove a hasty conclusion.
The other landmark matter in the Netherlands may provide some guidance as to how to answer the question. For, Urgenda has announced it will ask the court (i) to order the Dutch state to comply with the court's 2015 decision, ordering the state to reduce CO2 emissions by 25% from 1990 levels by 2020, and (ii) to impose penalties (dwangsommen) on the state, should it fail to do so.
The first hurdle that Urgenda has to take to prevail is to convince the court that the state has in fact not complied with the court's previous decision. Although consensus on this point seems almost complete, Urgenda will have to argue that the state has failed to comply with the court's previous decision. Should the state raise the argument that it has complied, Urgenda may have to demonstrate that the state has not complied.
The second hurdle relates to the fact that, as a rule, Dutch courts do not impose penalties on Dutch government agencies, as those are expected to comply with judicial decisions of their own accord. It is too soon to tell whether the court will apply that principle in this particular instance. Moreover, the point may be that, in order for penalties to be effective – i.e. create sufficient incentive to prompt the state to comply with its obligations – they will have to be substantial, if not enormous. A court may shy away from imposing such penalties.
Finally, even if the court were to allow "effective" penalties, and the state would eventually pay those to Urgenda, how would that benefit Urgenda's cause? With all that money, Urgenda could of course fund all kinds of relevant projects, but chances are that, from its perspective, this will be too little too late. Accordingly, as suggested by Jaap Spier, - former attorney general (advocaat generaal) with the Dutch Supreme Court - in a letter to the editor of Dutch newspaper NRC Handelsblad, alternative "sanctions" would be more appropriate. Urgenda could for example ask the court to present to the state a number of specific options to comply with its obligation to reduce emission of greenhouse gases, leaving the choice with the Dutch state, provided that the choice that the state makes would be sufficiently specific and credible. As an alternative, the court could order the state to report periodically to the court on the implementation of the measures that the state has taken. Returning to Shell, the metaphor of exploring unfathomed depths imposes itself. Until now, the Dutch courts seem to have taken this daunting task quite seriously.