What does the Montana climate case mean for sustainable innovation?

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Senior Director and Principal Analyst

This month, the Montana District Court ruled in favor of a group of youth plaintiffs that were suing the state of Montana, claiming that their state constitutional right to a “clean and healthful environment” had been violated by the state’s recent law that prevented the state environmental regulator from considering greenhouse gas emissions when evaluating large projects. The ruling has been widely hailed as a landmark case in climate law, both in America and globally — but which elements are likely to be impactful long term and what the impacts will be, specifically for innovation, is a little bit unclear.

Looking first at the impacts: It’s worth pointing out that this is a state court ruling and was decided on the basis of a constitutional right to a clean environment that is part of Montana’s constitution. The U.S. Constitution does not have a specifically enumerated right to a clean environment. The Supreme Court could potentially discover one — but that’s not likely any time in the foreseeable future, given the current conversative make-up of the court. Nonetheless, other states are considering similar amendments to Montana’s and more near-term action could happen on a state level.

Probably more impactful from a legal perspective are some of the elements of how Montana reached its decision. Two things really stand out: The first is the outright rejection of climate change denial testimony presented by the state of Montana. The court rejected all such evidence, or otherwise only accepted it to criticize it; this is a solid win for the legal acceptance of climate change as a legitimate concern and basis for legal action. The second element was that the court rejected Montana’s argument that its carbon emissions didn’t matter because other state and countries would continue to emit carbon, and climate change would continue to proceed, even if Montana itself decarbonized. This decision is important because it prevents passing the buck; the same argument could also be made by corporations that might claim that even if they decarbonize, others would still continue to emit. This element of the ruling would give much more weight to individualized suits on the basis of carbon emissions and will help close a legal loophole to weasel out of those suits. In addition, the court noted directly that every metric ton of carbon emissions exacerbates the plaintiffs’ injuries — directly tying emissions to legal damages.

What does this mean for innovators in the near term? Outside the state of Montana, basically nothing — and even within Montana, it may well be overturned on appeal. However, the arguments laid out in the ruling could represent an important avenue to help justify sustainable innovation if they are taken up in other courts and venues as well. Broadly, there’s three reasons for sustainable innovation: One, it’s the right thing to do in any social and moral sense; second, it will make a companies’ products more competitive or otherwise represent an improvement over the existing business; and three, most relevant here, it’s a hedge against risk. That risk could be risk of climate disaster, disruptions to supply chains, competitive risk from more sustainable technologies, or, in this case, risk of future legal action that holds companies liable for the damages caused by emissions. This decision could be an important stepping stone toward giving that last element of risk some real weight, by directly tying emissions to damages and rejecting the argument that small amounts of emissions are negligible. While we are in the early days for this legal strategy, this ruling shows the kind of legal framework that would be needed to sue companies for their historical emissions. That risk would be an important component of innovators’ justification for the importance of proactive sustainable innovation and decarbonization projects.

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