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Australian Student Files Climate Change Lawsuit Against Government

2020-07-23 16:47:29
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SYDNEY, Australia — Katta O’Donnell grew up with a fear of fire. As a child, she remembers burning bark falling from the air because of wildfires. This year, she worried that the blazes sweeping across regional Australia, fueled by climate change, could destroy her home outside Melbourne, the same way they had turned thousands of acres into ash.

Now, Ms. O’Donnell, 23, is leading a class-action lawsuit filed on Wednesday that accuses the Australian government of failing to disclose the material risks of climate change to those investing in government bonds. The suit accuses the government and the treasury of breaching its duty by not disclosing the risks of global warming and their material impact on investors.

It is the first time, experts say, that such a climate change case has been brought against a sovereign nation.

Ms. O’Donnell is joining a wave of young climate activists who have stepped on to the world stage in recent years. The Swedish teenager Greta Thunberg, for example, has spurred a global protest movement, testified before the United States Congress and the European Parliament, scolded world leaders in a fiery speech at the United Nations for not doing enough and sounded that alarm at the World Economic Forum in Davos, declaring, “Our house is still on fire.”

But Ms. O’Donnell’s case takes a unique tack by focusing on government bonds and the investment environment, said Jacqueline Peel, a law professor at University of Melbourne.

“My personal experience with climate change makes everything I read about climate change more tangible,” Ms. O’Donnell, a fifth-year law student at La Trobe University in Melbourne, said in a recent interview. “I want my government acting with honesty and telling the truth about climate risks.”

Simply put: Any risks to the country’s economic growth, value of its currency or international relations, to name a few factors, might change the value of her investment, her suit states.

Ms. O’Donnell, backed by a team including two prominent lawyers, is not asking for damages, but wants the government to step up on its climate change policies. The suit seeks an injunction stopping the government from further marketing bonds until they add those disclosures.

Credit…Molly Townsend

“The claim asks for disclosure of risks — it doesn’t tell the government what to do or how to act,” said David Barnden, one of three lawyers representing Ms. O’Donnell. All took her case free, they said.

But experts say that the case’s strategy is interesting given that the government has the power to legislate on climate change and control, in part, that risk.

The Australian government has not publicly responded to the lawsuit. Reached for comment, a spokeswoman for the Treasury Department said in a statement that it did not comment on current court proceedings.

Australia is physically vulnerable to climate change, which has helped drive drought, broken temperature records and led to the bleaching of the Great Barrier reef, so the financial risks of investing in the country have raised concerns. In 2019, Sweden’s central bank said it was letting go of Western Australian and Queensland government bonds in part because the greenhouse emissions from both were too high.

In recent years, the country’s financial and corporate regulator have pressured financial institutions that issue bonds to disclose their plans to measure and mitigate the risks related to climate change.

“One of the major issuers of securities on the global financial markets is not leading from the front,” Rob Henderson, the former chief economist for National Australia Bank, said of the government’s lack of disclosure.

Ms. O’Donnell’s case builds on an emerging trend of climate litigation, with calls for private companies to take responsibility for their part in the growing threat to the planet.

A Peruvian man chose to sue Germany’s largest energy company because, he said, melting glaciers exacerbated by climate change are threatening his home. Other nations, including the Pacific island of Vanuatu, which are facing a threat to their very existences because of climate change, have said they are considering taking legal action against the world’s biggest fossil-fuel companies.

In all, 1,587 climate litigation cases have been brought worldwide since 1986 and May this year, with Australia second only to the United States, according to the Grantham Institute of Research on Climate Change and the Environment. The cases have been filed “as a way of either advancing or delaying effective action on climate change,” the institute says.

It is unclear if Ms. O’Donnell will be successful. But with many private corporations measuring — and promising to mitigate — their contributions to climate change, there is “strong acceptance of the simple argument that climate change poses material and financial risks,” said Anita Foerster, a senior lecturer in business law at Monash University.

Ms. O’ Donnell, who bought her first government-issued bonds this year, says her interest in climate law and its effect on investors began when she heard Mr. Barnden, now her lawyer, speak at a lecture last year. She said she chose her legal strategy because she wanted to educate herself and others who bought such bonds of the potential financial risks of climate change.

“All routes are crucial, and we will need to unite.” she said. “But investment and the economies and the climate are all so closely linked, and that really needs to be highlighted.”

“The government knows about the problem,” she added. “They know the solutions, and they know what they need to do but they’re not doing it.”

Mr. Henderson said he expected the case to prompt those in other nations to follow suit: “Other people will be saying, hang on what about our government?”

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