Bridging The Gap Between Climate Justice And Climate Finance: Court-Ing Climate Change

BRIDGING THE GAP BETWEEN CLIMATE JUSTICE BRIDGING THE GAP BETWEEN CLIMATE JUSTICE AND CLIMATE FINANCE: COURT-ING CLIMATE CHANGE By Justice Jawad Hassan, Lahore High Court, LL.M Environmental Law, Pace University, School of Law, New York at the Climate Change Conference Navigating Climate Governance Executive Action and Judicial Oversight 8 June 2024 Supreme Court of Pakistan, Islamabad INTRODUCTION The Law Justice Commission of Pakistan under the auspice of the Supreme Court of Pakistan (around the World Environment Day) is highlighting, with three panels, the climate change challenges in Pakistan, climate governance and court-ing climate change with the legal anthropology and the jurisprudential anthology, that it is the urgent need for Pakistan to mobilise resources towards not only climate mitigation, but climate adaptation as well. In a recent multi-agency report1 from the United Nations, two notable points stand out: (1) climate change threatens to undermine any work and progress towards achieving our "Sustainable Development Goals" and (2) that we are not doing enough to lower our emissions and meet the goals set out in the Paris Agreement. This latter point is especially concerning as this year's COP29 marks the first global stocktake. The challenges presented by climate change intersect and are often directly related to one another: taking the example of increased incidents of forest fires mean greater biodiversity losses and reduced air quality, consequently adversely affecting public health. From my own country of Pakistan, we saw how last year's floods that swept across country resulted in a devastating loss of life, as well as triggering large scale internal displacement of 8.2 million people2 and disproportionately affected vulnerable segments of society, especially low-income groups, women and children, and loss of vital infrastructure3 that may take years to rebuild. Clearly, where these problems intersect, so must the solutions. Where climate finance can play the imperative role of providing resources towards climate mitigation and adaptation activities, (especially for developing countries that bare the brunt of the effects of climate change) there needs to be a legal and regulatory framework to facilitate and guide these resources towards sustainable development. Often when the topic of governance structures arises, we tend to focus on the top-down legislative approach towards climate finance but not the crucial role of courts in the fight against climate change and advancing climate justice. With my talk to you today, I hope to shed some light on the part the courts and us, judges, can play in protecting our environment and most vulnerable sections of our society. WHAT IS CLIMATE FINANCE? Although there is no single definition of climate finance, the United Nations Framework Convention on Climate Change (UNFCCC) Standing Committee on Finance provides the closest thing to a concise, official version: "Climate finance refers to local, national or transnational financing drawn from public, private and alternative sources of financing that seeks to support mitigation and adaptation actions that will address climate change."4 "Climate finance aims at reducing emissions and enhancing sinks of greenhouse gases and aims at reducing vulnerability of, and maintaining and increasing the resilience of, human and ecological systems to negative climate change impacts."5 Climate finance refers to the financial resources provided to assist developing countries in mitigating and adapting to the impacts of climate change. The idea is rooted in the understanding that developing countries, which often contribute the least to greenhouse gas emissions, are disproportionately affected by the adverse effects of climate change. Climate finance aims to bridge this gap by providing funds for projects and initiatives that promote sustainable development, reduce emissions, and enhance resilience to climate-related risks. This can be through several modes: (1) Mitigation: whereby funding initiatives aim to reduce or prevent the emissions of greenhouse gas emissions. (2) Adaptation: whereby financing is geared towards projects that help communities adapt to the impacts of climate change e.g., rising sea levels, extreme weather events, and changing precipitation patterns. (3) Capacity building: supporting the development of skills and infrastructure in developing countries to effectively respond to climate change. (4) Technical transfer: financial support for the transfer of environmentally sound technologies from developed to developing countries to facilitate climate mitigation and adaptation efforts. (5) Results-based financing: financial incentives on result-based achievements, such as emissions reductions or successful adaptation outcomes. Climate financing is based upon concept of mobilizing private capital for climate action and proposes solutions to unlock flows at scale. It requires undertaking actions in three areas: (i) enabling environments; (ii) instruments; and (iii) institutions. It is important for all governments and stakeholders to understand and assess the financial needs of developing countries, as well as to understand how these financial resources can be mobilized. THE INSTITUTIONAL FRAMEWORK, MECHANISMS AND SOURCES OF CLIMATE FINANCE International Conventions and legislative instruments lay out the foundation for establishing the mechanisms and systems of climate finance: (1) The United Nations Framework Convention on Climate Change (UNFCCC), effective 1994 (2) The Kyoto Protocol Adopted in 1997 (3) Green House Gas Protocol, 1998 (4) Cancun Agreement, 2010 (5) The Paris Agreement, 2015 (6) UN Sustainable Development Goals (SDGs), established in 2015 These have paved the way for different sources of support for climate finance: (1) Global Environment Facility (GEF): serves as an operating entity of the financial under the UNFCCC Convention. (2) GEF Trust Fund: Under the Trust Fund Climate Change Focal Area, the GEF finances projects for (i) mitigation, (ii) adaptation, (iii) preparation of national communications in non-Annex I Parties to the UNFCCC and other enabling activities. (3) Green Climate Fund (GCF): Formed in 2010 and as the world's largest climate fund, GCF accelerates transformative climate action in developing countries through a country-owned partnership approach and use of flexible financing solutions and climate investment expertise. (4) The Special Climate Change Fund (SCCF): Established in 2001 to finance projects relating to (i) adaptation, (ii) agriculture, (iii) economic diversification, (iv) energy, (v) forestry and waste management, (vi) industry, (vii) technology transfer and capacity building, and (viii) transport. (5) The Adaptation Fund (AF): The Adaptation Fund was established in 2001 to finance concrete adaptation projects and programmes in developing country Parties to the Kyoto Protocol that are particularly vulnerable to the adverse effects of climate change. (6) The Climate Investment Funds (CIF): Co-ordinated by the World Bank comprises of two funds, i.e., the Clean Technology Fund and the Strategic Climate Fund. (7) Warsaw International Mechanism for Loss and Damage: Established at COP19 in Warsaw, this mechanism addresses loss and damage associated with the impacts of climate change, including extreme events and slow onset events, in developing countries that are particularly vulnerable to the adverse effects of climate change. (8) Climate Investment Funds (CIFs): Including the "Clean Technology Fund" and the "Strategic Climate Fund", these funds - administered by the World Bank - provide middle-income countries with scaled-up financing to initiate transformational change towards low-carbon, climate-resilient development. (9) Other sources of climate finance: Examples include (i) development aid or equity, (ii) investments and asset trading e.g., sovereign green bonds, emissions trading (carbon) markets, (iii) grants provided by multi-lateral funds, market-based and concessional loans from financial institutions, and (iv) bilateral or multi-lateral finance flows between countries. Examples of climate finance initiatives in Pakistan include: (1) Ten Billion Tree Tsunami Programme (2) Delta Blue Carbon Project (Indus River / Arabian Sea Mangrove Restoration) (3) Climate Resilient Urban Human Settlement Unit (4) SBP's Financing of Power Plant Using Renewable Energy Scheme: This concessional-finance initiative started in 2009 and revamped in 2016, offering concessional financing at 6.00% per annum for renewable energy projects. Through this Scheme, the SBP extends loans to commercial banks and DFIs at a nominal 2% interest rate, enabling the to offer loans to end-consumers at 6%. (5) WAPDA's Green EuroBond which raised an estimated total of $500 million to fund a hydroelectric project. (6) NEPRA's "Power with Prosperity": A revolving grant scheme in partnership with Akhuwat, Karachi Electric and Engro to make solar energy more accessible for underserved communities in Pakistan. THE ROLE OF THE JUDICIARY IN ADVANCING CLIMATE JUSTICE IN PAKISTAN The landmark decision that brought climate justice to the forefront in Pakistan was Ms Shehla Zia and others v. WAPDA (PLD 1994 Supreme Court 693) where it was held that the construction of a high voltage grid station would be harmful to the health of a resident and therefore, interfered with their right to a healthy environment as a right to life under the Pakistani constitution. Here, the Supreme Court observed that: 'The rule of precautionary policy is to first consider the welfare and safety of the human beings and the environment ...Our need is greater as it is bound to affect our economic development, but in the quest of economic development one has to adopt such measures which may not create hazards to life, destroy the environment and pollute the atmosphere.' Moreover, courts in Pakistan have recognised the concept of "intragenerational equity" and the "public trust doctrine" in environmental jurisprudence when introducing the concept of climate justice. The case of Asghar Leghari v. Federation of Pakistan and others (2018 CLD 424) it was observed that: 'While mitigation can still be addressed with environmental justice, adaptation can only be addressed through climate justice, where the courts help build adaptive capacity and climate resilience by engaging with multiple stakeholders.' The undertaking of this responsibility can be found in the case of Pervaiz Abbasi v. Government of Punjab and others (2022 Writ Petition No. 75 of 2022, LHC) where the protection of the Murree Hills ecosystem was at stake and the Court directed the constitution of a sub-committee to draft a law on the preservation, conservation, and protection of the Murree Hills ecosystem. While the outcome resulted in this draft act being set aside in favour of another (yet similar) one, it highlights how the Courts can mobilise various stakeholders towards a common purpose, which can serve us well in the fight against climate change. To implement climate-based justice, the judicial system needs rapid internal transformation. This can be done through technical capacity building and judicial education programs. An integrated judicial education approach should adopt the triple-helix model, involving the judiciary, private sector, academia, government, and scientists. Such inter-disciplinary/whole of society approach should be integrated into the judicial education curriculum of the Federal and Provincial judicial academies. The role of the Law and Justice Commission would be critical in advocating such whole-of-society approach. Of course, some would describe the proactive action of judicial intervention as a cause of concern. To this point, I highlight the principle of "pacta sunt servanda" as outlined in outlined in Article 26 of the Vienna Convention on the Law of Treaties (1969), which mandates that every treaty in force is binding on its parties and must be implemented in good faith. Pakistan, having signed the Vienna Convention on the Law of Treaties, as well as the Paris Agreement and other Climate Treaties like those mentioned above, is legally bound to amend its national legislation to align with its commitments under these climate agreements. This responsibility extends across all three branches of the Pakistani government, including the judiciary. Upholding compliance with climate treaties in Pakistan is not an instance of judicial activism but rather a legal obligation rooted in the adherence to international and constitutional law. Since the judicial system is one of the key stakeholders of legal education in Pakistan. In order to augment climate change knowledge and resilience in the legal sector, law and sustainability needs to be incorporated as a core and mandatory subject in law schools and universities. Environmental laws should be viewed as a set of complex adaptive systems with internal and external linkages such as evolutionary nature of ecosystem, impact of anthropogenic activities, use of technology, impact on economy and management of land use. Therefore, environmental law should be viewed as comprising of a social component and an ecological component. Despite the strides made in environmental constitutionalism in Pakistan, on one hand, there is a glaring gap between climate science and Pakistan's vulnerability to climate change, and on the other, an equally visible gap in attribution science and litigation. Some of the threats we face include: (1) Agriculture contributes 21% to our GDP. It is estimated that the rise of temperature 0.5 degree to 2 degree centigrade, agriculture productivity will decrease by around 8-10% by 2040. (2) Sea level rise in Pakistan is estimated at 1.1 m/year from 1856 to 2000 along the Karachi coast. The change in sea level was due to major processes of thermal expansion of ocean from global warming and glacier mass loss. (3) Air pollution exacted a high health (235,000 premature deaths and reduced life expectancy by almost 2.7 years) and economic toll (5.8% of GDP loss since 2013) in Pakistan. In the inevitable interaction between science and law, it is incumbent on policy makers and law makers to advance a clear scientific position on the climate risk and impact on Pakistan. Especially so, when it comes to establishing the causal link between anthropogenic activities of the defendants and the loss and damage suffered by the plaintiffs in Pakistan. Therefore, this gap needs to be bridged through strengthened collaboration between academia, government, judiciary, and legal practitioners/civil society. CLIMATE JUSTICE, FINANCE AND BUSINESS Climate finance allows countries to adapt and transition to sustainable practices which can only be made possible if mechanism for replenishment and disbursement of resources are based on principles of Climate Justice. Climate justice finance saw a big win at COP 27 with the establishment of the "Loss and Damage Fund", however the win is merely symbolic till actual operationalization of the Fund. In this regard, we need to recognise the shortcomings of these systems and how the international courts and forums may play a significant role in attributing responsibility which might contribute towards mobilization of climate finance in line with objectives of Climate Justice. Upon mobilization, role of domestic courts will become vital in ensuring equitable distribution of funds. We highlight the Supreme Court of Pakistan's judgement in the case of Province of Sindh through Chief Minister and others v. Sartaj Hyder and others (2023 SCMR 459) reading that: 'It is imperative that serious and practical efforts are undertaken for prevention and adaptation against such disasters induced by climate change. It is also expected that existing policies or mechanisms catering to food insecurity etc. are mobilized as soon as possible...'. So how can the judiciary play their part in bringing together climate justice and climate finance? As a starting point, the Courts can play a substantial role in creating a secure business environment by improving access, time, cost, and quality of judicial process. As observed by the Lahore High Court in M.C.R. (Private) Ltd. Franchisee of Pizza Hut v. Multan Development Authority and others (2021 CLD 639) that: 'One of the basic purposes behind provision of this fundamental right is certainly to advance culture of socio-economic progress and to protect and promote business and trade activities and, at the same time, to encourage simplification of the process of establishing and carrying out new business ventures throughout the country because activities of business and trade create opportunities for the masses around and provide job options, financial stability and progress in the area.' In light of this, it may be noted that courts don't need to serve as the only forum for resolving disputes and contentious issues, and alternatives may be explored where the situation permits - if not commands - it. Recently due to the various judgments of the Supreme Court of Pakistan, the ecosystem of the ADR has been strengthened in Pakistan by 2024 SCMR 640, 2024 SCMR 947, 2024 SCMR 1856 and 2023 SCMR 1103. In Faisal Zafar and another v. Siraj-ud-Din and 4 others, GENOME Pharmaceuticals and SECP , 2024 CLD 1 and Morgah Valley case, PLD 2024 Lahore 315, it was observed by the Court that: 'Unlike court proceedings, mediation (for example) provides a more informal and flexible approach, fostering open communication and creative problem -solving. The mediator's role is not to make decisions but to guide the parties in finding common ground and exploring potential solutions. One of the key advantages of mediation is its cost-effectiveness compared to court proceedings. It also tends to be a fast method of resolution, putting more control in the hands of parties involved...as parties actively engage in finding mutually agreeable solutions.' Regardless of whichever forums we choose to help achieve climate justice, in balancing it with financial and contractual commitments under climate finance, Courts can help advance both through: (1) Enforcement of climate commitments and ensure accountability that these commitments are upheld. (2) Citizens, non-governmental organizations ("NGOs") or even governmental organizations can bring legal challenges to court to ensure accountability in the use of climate finance i.e., failing to use allocated funds appropriately climate-related projects. (3) Adjudicating and resolving disputes and ensuring climate finance is distributed in a fair and effective manner across different regions or projects and legal processes. (4) Judicial decisions can set legal precedents that influence how climate finance and ancillary issues (e.g., carbon rights) can be interpreted and establishing principles and providing guidance on the development of climate finance policies. (5) Vulnerable communities adversely affected by climate change and ensure that climate finance redresses their issues and protect their human rights. (6) Holding corporations accountable for their contributions to climate change, i.e., lawsuits against fossil fuel companies may seek compensation for the impacts of climate change and demand financial contributions and adaptation efforts. (7) Review and assess the adequacy of national climate policies, including legal challenges that question the effectiveness of government strategies in meeting climate goals and using financial resources appropriately. It should be noted as well that a major source of climate finance is Multilateral Development Banks ("MDBs") and if climate justice and climate finance are to work together, then significant changes in financial architectures of MDBs are required to align them with principles of climate justice. An emerging sentiment is that climate finance should not be linked to development budgets. New and additional funds must be established which can adequately address climate injustices. Further, an overhaul of climate finance structures is needed whereby disbursement of financial resources is not based on loan models. In addition, to traditional sources and MDBs, sub-national agents such as private companies are increasingly becoming contributors to climate finance by making green investments, creating green jobs, developing new technologies and investing in projects/infrastructures to enhance mitigation, adaptation, resilience efforts. However, to maximise on this source of climate finance security of investment is an important component. CONCLUSION Climate change carries an inequitable nature and extends adversely impacts upon lesser developed countries and communities disproportionately despite their being negligible contributors, which suggests that climate change doesn't only require technical solutions, but it is also an issue of equity and justice, demanding a new approach to policy making and reparations rooted in social justice and human rights. In recent years, courts around the world have taken stock of this fact and have been tremendously proactive in delivering climate justice when little to no other solutions presented themselves. In 2016, a landmark decision by the Constitutional Court of Colombia recognised the Atrato River as a subject of rights to protection, conservation, maintenance, and restoration.6 Similarly, in 2021, the Federal Constitutional Court of Germany caused quiet the stir with its decision in the case titled Neubauer et al v. Germany by holding that the legislature was under an obligation to protect the climate and aim towards achieving climate neutrality. As well as that in 2022, in PSB et al v. Brazil, the Federal Court of Brazil decided that the environmental law treaties such as the Paris Agreement are a particular type of human rights treaty which enjoy a "supranational" status whereby any national laws or decrees contradicting the Paris Agreement may be invalidated. In Friends of the Earth and others v. Secretary of State (2022), the Hon. Justice Holgate of the United Kingdom High Court held that the government is to outline its exact policy to reduce emission in compliance with the Climate Change Act 2008. These are just some among many of the examples, over the past decade where various jurisdictions have passed some monumental decisions on climate change which cannot be further expanded upon here due to paucity of space. Climate resilience and an overhaul on climate governance have now become the need of the day and only grows more pressing. It is up to us to recognise this and act on it before the opportunity slips past us. Drawing on lessons learnt from Pakistan, the role of judiciary in advancing climate justice can be - in the words of Archbishop Desmond Tutu of South Africa (as quoted by Mary Robinson) - a new 'narrative of hope'.