The European Court's ruling on Swiss climate action reveals the contradictions in global climate policy, where environmental goals clash with energy realities.
With the recent ruling by the European Court of Human Rights in favor of 2,000 Swiss women who deemed their government's climate efforts insufficient, we are witnessing a watershed moment—one that is likely to reverberate well beyond Europe's borders.
Commodity prices are soaring, and although the narrative often points to increased demand, the supply-side dynamics are arguably more pertinent. As climate litigation like the aforementioned case advances, it could potentially result in a chilling effect on investments in oil exploration and production. If capital inflows to the oil industry diminish, supply may fail to keep pace with the still-growing global demand. This could lead to exorbitantly high oil prices, with speculations of oil reaching $1,000 a barrel in the next decade, though this remains a topic of debate among experts.
The real issue here is not the hypothetical peak in prices but who bears the brunt of these increases. Policies that prioritize rapid transitions to costly alternatives, like electric vehicles, disproportionately affect the poor and middle class, who may find such alternatives financially out of reach.
The Swiss case is a testament to the inherent subjectivity in climate litigation. The plaintiffs' discomfort during "heatwaves," however defined, becomes the litmus test for governmental action. This raises the question: What are the objective measures of success for a government's climate policy? It has become increasingly apparent that there are no objective metrics to assess both the purported benefits and the real consequences of such policies.
The global energy landscape is not uniform. While some in the Western world advocate for a swift pivot away from fossil fuels, billions in emerging markets are climbing the economic ladder, necessitating more energy, not less. Historically, humanity has never transitioned to a less dense energy source. The drive for better living standards in places like South America, Asia, and Africa will likely sustain, if not increase, the demand for traditional energy sources.
In response to high energy prices, governments may resort to subsidies to keep energy affordable for their citizens. This creates a paradox where efforts to suppress the use of fossil fuels are undermined by financial support to cushion the blow of rising prices. In essence, governments might be caught between promoting cleaner energy and ensuring that their populations can afford to power their economies.
Finally, we must scrutinize the internal contradictions of climate policies. In striving to achieve environmental goals, governments may implement policies that negate each other. For instance, while pushing for electric vehicles, they might simultaneously subsidize gasoline to placate voters. The result is a policy landscape riddled with inconsistencies, often at odds with itself.
