The International Court of Justice says that countries are accountable for harm to the climate. What does this mean for carbon markets?

“This advisory opinion is a tool for climate justice.”

PHOTO Credit: Activists outside the Peace Palace, the Hague after the International Court of Justice released its advisory opinion.

On 23 July 2025, the International Court of Justice issued an advisory opinion titled, “Obligation of States in respect of climate change.” The International Court of Justice states that countries must prevent harm to the climate and that failure to do so could result in them having to pay reparations.

The Court’s 140-page opinion says that,

Failure of a State to take appropriate action to protect the climate system from GHG emissions — including through fossil fuel production, fossil fuel consumption, the granting of fossil fuel exploration licences or the provision of fossil fuel subsidies — may constitute an internationally wrongful act which is attributable to that State.

The Court also states that,

[A] clean, healthy and sustainable environment is a precondition for the enjoyment of many human rights, , such as the right to life, the right to health and the right to an adequate standard of living, including access to water, food and housing.

The Court’s opinion is huge victory for climate justice. The Court’s advisory opinions are nonbinding, but as Lauren Gifford of Colorado State University and Daimeon Shanks-Dumont of the University of California, Berkeley explain in a recent article for The Conversation, “they can still have a powerful impact, both legally and politically”.

The rulings are considered authoritative statements regarding questions of international law. They often clarify or otherwise confirm existing legal obligations that are binding.

From Vanuatu to the Hague

The idea behind the Court’s opinion came from law students at the University of South Pacific in Vanuatu. In 2019, 27 students launched a campaign to get the ICJ, the world’s highest court, to issue an advisory opinion on the climate crisis.

They approached Ralph Regenvanu, who was then Vanuatu’s opposition leader and is now the country’s minister for climate change, with the idea for the campaign. The students had already written a legal brief and sent it to the leaders of all countries in the Pacific Islands Forum.

They had also set up an NGO, Pacific Island Students Fighting Climate Change.

“I agreed that this was a very good idea and so I set about trying to get it into the international agenda,” Regenvanu told The Guardian. In 2023, the UN instructed the ICJ to produce the advisory opinion.

Vishal Prasad is one of the law students that launched the campaign. After the Court issued the opinion, he told The Guardian,

“This advisory opinion is a tool for climate justice. And boy, has the ICJ given us a strong tool to carry on the fight for climate justice.”

Regenvanu described the outcome as a milestone moment for climate justice, “It has confirmed what vulnerable nations have been saying and have known for so long,” he told The Guardian. “That states do have legal obligations to act on climate change.”

Big polluters should be held responsible

During hearings in December 2024, the Court heard from more than 100 countries and organisations. Representatives of countries vulnerable to the impacts of the climate crisis argued that the countries responsible for most historical emissions should be held legally responsible.

Predictably enough, big polluters such as the US, Australia, China, and Saudi Arabia argued against legal accountability. The world’s biggest greenhouse gas emitters argued that their obligations were limited to the UNFCCC and the Paris Agreement.

The ICJ rejected that argument. A range of other treaties apply, including the UN convention on the law of the sea, the Vienna convention for the protection of the ozone layer, the Montreal protocol, the convention on biological diversity and the UN convention to combat desertification.

The Court’s opinion concludes that,

[T]he principles of sustainable development, common but differentiated responsibilities and respective capabilities, equity, intergenerational equity and the precautionary approach or principle are applicable as guiding principles for the interpretation and application of the most directly relevant legal rules.

Carbon traders in court?

While the ICJ opinion does not mention carbon credits or carbon markets, the opinion has obvious implications for carbon markets. Trading carbon credits, or Internationally Transferred Mitigation Outcomes as they are called under Article 6 of the Paris Agreement, does not reduce greenhouse gas emissions. Instead, carbon markets (at best) shuffle emissions around the planet with hoped for reductions in one place traded against emissions from burning fossil fuels in another.

The reality is that carbon markets do nothing to reduce emissions from burning fossil fuels as Energy Australia admitted earlier this year.

The ICJ opinion is clear that governments must phase out fossil fuels and rapidly reduce emissions. Carbon markets have proved to be a dangerous distraction from the urgent need to leave fossil fuels in the ground.

The entire purpose of carbon trading is to allow the fossil fuels industry to continue polluting, and profiting, for as long as possible. Carbon trading is a mechanism not to reduce emissions, but to allow emissions to continue. For every carbon credit sold, one ton of carbon dioxide is released to the atmosphere, where it will cause harm to the climate for hundreds to thousands of years.

Failure to take meaningful action to address the climate crisis is not only environmentally negligent but, as the ICJ opinion confirms, could also be in breach of basic human rights. Carbon trading is by definition a failure to take meaningful action — because it allows the fossil fuel industry to continue business as usual.