This Peruvian Farmer Is Fighting a German Fossil Fuel Giant: Here’s What You Need to Know

Next week, the Higher Regional Court in Hamm, Germany will hear the first ever lawsuit by an individual against a European company for its contributions to climate change. A Peruvian farmer and mountain guide filed a lawsuit in 2015 against RWE, one of the largest greenhouse gas emitters in Europe, claiming that the company was responsible for mitigating the threat of flooding due to accelerated climate change-driven glacial melt into Lake Palcacocha. If successful, the case will establish a precedent for millions of others impacted by climate change to seek damages directly from corporate emitters.

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The city of Huaraz in north-western Peru sits more than 10,000 feet above sea level, surrounded by the towering peaks of the Cordillera Blanca Mountain Range. The city has been increasingly threatened by the rapidly expanding Lake Palcacocha. Catastrophic flooding events have occurred here before due to melting glaciers.

A large piece of a glacier fell into the lake in 1941, triggering a major flood and mudslides that buried Huaraz, killing thousands of residents. Glacial melt due to climate change has caused the volume of the lake to increase by 34 times what it was in 1970.

Several measures have been deployed to mitigate flooding risk from the ongoing glacial melt, including hoses to remove water and lower the water level, 24-hour monitoring by emergency management staff, publicly accessible live stream of lake conditions, and public alert systems. However, these strategies are not sufficient to protect Huaraz residents from a major flooding event like the one that decimated the town in 1941. To prepare for the possibility of melting eventually dislodging another large chunk of glacier into the lake, city officials are planning to build a large protective dam with an integrated pumping station and drainage infrastructure system that could withstand a sudden, major increase in water level. 

In 2015, Saul Luciano Lliuya, a farmer and mountain guide from Huaraz, filed a lawsuit against German energy giant RWE. The complaint stated that as one of the largest emitters in Europe, the company is partially responsible for climate change and the associated flooding risk in Huaraz, and should contribute financially to the planned dam and drainage measures at Lake Palcacocha.

A Possible New Legal Precedent

The case against RWE is based on the common law of torts, with a basic tenet that those who have been wronged can claim remediation from those who wronged them. 

According to an analysis by Douglas Kysar, a professor at Yale Law School, the farmer’s complaint says that RWE’s contributions to climate change increased glacial melt, the volume of Lake Palcacocha and flooding risk in Huaraz. As such, RWE is proportionately responsible for costs associated with managing the threat. The farmer’s legal team estimated that RWE’s share of global greenhouse gas emissions to be 0.47% – 0.47% of the cost of dam and drainage system construction is around €20,000 (US$21,677). This single sum would be insignificant to RWE, which reported a net income of €4.5 billion in 2023. However, a far greater threat to RWE and other corporate emitters are the millions of potential plaintiffs worldwide directly impacted by climate change.

This case is already ground-breaking as the Higher Regional Court of Hamm in Germany became the first legal body to affirm that, in principle, a private company is responsible for its share of climate change-related damage, if damage or risks to individuals or their property can be attributed to the company’s operations.

The court will consider one primary question at the hearing on March 17 and 19: Is there a legally relevant risk that the plaintiff’s property be damaged by flooding? 

There are two possible outcomes from the hearing.

The court rules in favor of the plaintiff (Saul Luciano Lliuya), recognizes that there is a significant flood risk and appoints an expert to review evidence already submitted by both the plaintiff and defense. After reviewing the evidence, the expert will then comment on the extent to which climate change and CO2 emissions released by RWE contribute to this risk.

Or, the court rules in favor of the defense (RWE) and dismisses the case if the risk of flooding and damage to the plaintiffs property is not sufficiently high. The plaintiff may or may not have an opportunity to appeal the ruling. 

Lawsuits Have Netted Big Wins for Climate

Courts have emerged as a critical tool for compelling action on climate change. The number of global climate litigation cases has risen steadily in the past two decades, from 20 cases in 2005 to 251 cases in 2023.

Notable climate litigation cases have occurred worldwide.

The Montana Supreme Court overturned a state law banning state agencies from considering the impact of climate change and greenhouse gas emissions in environmental reviews. The group of young plaintiffs asserted that the law violated the right to a clean and healthy environment enshrined in the state constitution. Youth plaintiffs won a similar case in Hawaii and an active lawsuit in New Mexico accuses the state of failing to control air pollution from the fossil fuel industry in violation of the state constitution.

Lawsuits have also compelled changes to national decarbonization goals. A group of German youths won a legal challenge to Germany’s Federal Climate Protection Act that compelled the government to establish more ambitious greenhouse gas emission targets. In response, lawmakers passed a bill raising the minimum reduction target from 55% to 65% compared to 1990 levels by 2030.

Litigation Critical to Compel Action as Global Progress on Climate Slows

Momentum to transition away from fossil fuels may be slowing worldwide. The estimate of global warming by 2100 based on current decarbonization commitments is 2.7C, well beyond the 1.5C Paris Agreement target and a projection that has not improved since 2021. This is despite record-breaking global investment in and rapid deployment of clean energy and electric vehicles. Global fossil fuel emissions have continued to rise reaching an all-time high in 2024.

Major energy producers, financial institutions and other companies are reducing support for clean energy and expanding support for fossil fuel development. 

British Petroleum (BP) last month announced it will both reduce funding for clean energy from $5 to $1.5-2 billion per year and increase investment in oil and gas by 20% to $10 billion per year, after previously committing to a 40% reduction in fossil fuel production by 2030. This follows similar shifts back to oil and gas from other fossil fuel giants including Shell and Chevron.  

The six largest banks in the US – Bank of America, J.P. Morgan, Citigroup, Morgan Stanley, Wells Fargo and Goldman Sachs – as well as several major Canadian banks, have recently left the UN sponsored Net-Zero Banking Alliance. All banks insisted their decision would not impact their decarbonization pledges, with RBC Chief Executive Officer Dave McKay reassuring that pulling out of the alliance “doesn’t lead to a non-commitment to net zero or climate change.” However, analysts say the moves send a clear signal to the market that climate change and the energy transition have become even less of a priority for Wall Street.

The second Trump administration has moved rapidly via a flood of executive orders to end federal support for clean energy development and open federal lands to resource extraction.

On his first day in office President Trump withdrew the US from the Paris Climate Agreement, halted offshore wind lease sales and permits for onshore and offshore wind projects and revoked a Biden administration ban on new offshore oil and gas development along US coastlines. The administration has also halted distribution of all climate-related funding authorized under the Inflation Reduction Act.

Trump’s all-out support for fossil fuels will likely have an impact on projected global temperature levels. Climate Action Tracker last November projecting that his administration could add 0.04C of warming by 2100. However, the analysis cautioned that the actual effect may be far higher if additional high emitting countries reduce their clean energy commitments and/or increase fossil development.