Climate obligations in Australia and abroad are oceans apart – what does it mean?

Comparing the Federal Court’s decision in Pabai with the ICJ’s Advisory Opinion on the ‘Obligations of States in Respect of Climate Change’

Globally, courts are increasingly being asked to clarify the extent of States’ obligations to mitigate the impacts of climate change.

In this insight, we compare Australia’s domestic legal response to climate change in the Federal Court’s decision in Pabai v Commonwealth of Australia[1] (Pabai) with recent international developments in the Inter-American Court of Human Rights[2] (IACtHR) and the International Court of Justice[3] (ICJ).

Pabai and the two advisory opinions from the IACtHR and ICJ promote markedly different approaches as to whether and how obligations in relation to climate change should be recognised and enforced.

In a rush?  Click here for a snapshot of how Australia’s climate obligations compare with those set by the ICJ.

Here’s what this means for you

Together, these recent developments illustrate a broadening legal conversation about climate responsibility, rights and risk, and the push for obligations and consequences imposed upon governments to reduce those risks. The IACtHR and ICJ advisory opinions represent the push for positive duties to mitigate climate change and may prompt a domestic transformation of legal duties and obligations.

If you operate in Australia, what does this mean for your business?

• International legal standards on climate change are becoming more stringent. Although the opinions are not directly enforceable in Australia, the standards they set have considerable influence and may inform future Commonwealth Government policy.
• Just as governments are becoming increasingly criticised for the measures they do and don’t take in respect of climate change, businesses are also in the spotlight. Businesses should bolster their due diligence processes and expect greater scrutiny of the management of their climate change risks.
• The uncertainty of the influence of the ICJ and IACtHR opinions on Australian jurisprudence leaves the door open to further climate-related litigation. We should expect further novel and creative actions that build on cases like Pabai and on recent progress in climate attribution science (which is developing widely accepted methods for attributing climate events such as heatwaves, droughts, floods, hurricanes and wildfires to corporate emitters).

While the Federal Court found the Commonwealth Government owed no duty of care in this case (concerning emission reduction targets and other measures), the Court recognised that the law in this area is nascent and could change through appeals and introduction of new legislation. The position may also vary depending on the laws of each of the States and Territories.

The Federal Court’s decision in Pabai

The facts

Applicants from the Torres Strait Islands in Pabai claimed that the Commonwealth Government owed a novel duty of care to prevent climate-related harm to their communities. They alleged this duty was breached by:

• not setting targets in line with best available science, which would involve calculating reduction targets by reference to Australia’s share to keep global warming as close to 1.5 degrees above pre-industrial levels as possible; and
• failing to properly fund construction of sea walls.

The applicants also contended that the severe environmental degradation due to inadequate mitigation and adaption measures resulted in the loss of fulfilment of Ailan Kastom, the body of customs, traditions and beliefs held amongst the traditional owners of the Torres Strait Islands, which will be impacted by damaged ecosystems and sacred sites due to the risk of further inundation and changing climate.

Findings

Justice Wigney acknowledged the seriousness of climate change impacts on Torres Strait Islanders, and found that the Commonwealth had, at most, treated climate science as a background or contextual consideration, failing to give genuine consideration to the best available science. His Honour ultimately concluded that the Commonwealth did not owe a duty of care under the law of negligence because these are matters government policy:

'Agreements and arrangements between the tiers of government in respect of such matters involve and reflect matters of core or high government policy. As the authorities discussed earlier in these reasons clearly indicate, the imposition of a duty and standard of care that would impinge on, or require the Court to pass judgment on, such matters would be inappropriate.'[4]

In declining to find a duty of care, the Court:

• balanced the scope of judicial power, the complex nature of climate policy, and the need for coherence with public law frameworks, and held that it was inappropriate and impractical for the Court to pass judgment on issues of core government policy; and
• held that even if there was a duty, the evidence was insufficient to prove that a breach materially contributed to the harm. Namely, that while Australia’s emission targets are inconsistent with the best available science and international objectives, a reasonable government can consider a range of factors, such as economic, social and political, when setting targets. The global and cumulative nature of greenhouse gas emissions also made it challenging to demonstrate Australia’s incremental contribution caused harm to the Torres Strait Islands.

The damage claimed by the plaintiffs in relation to the loss of fulfilment of Ailan Kastom, while significant, also could not succeed as the Court found it is not a recognised category of compensable harm under the Australian common law of negligence (which, at this point in time, only arises from personal injury or property damage).

Takeaways

The outcome in Pabai is consistent with the decision of the Full Court of the Federal Court of Australia in the Sharma case,[5] reflecting the judiciary’s cautious approach to recognising positive climate duties on the government in the absence of statutory support.

While the findings in Pabai maintain the status quo in Australian negligence law, the decision sits within a broader and still-developing legal landscape. Justice Wigney commented that the case failed because ‘the law in Australia as it currently stands provides no real or effective avenue’ for the applicants to pursue the claims, but acknowledged that this may be changed in common law by appellate courts or through legislation.

The New South Wales Supreme Court will also have the opportunity to share their take on climate duties in the Murray Darling Basin Authority class action.[6] In that case, the plaintiffs have alleged that the MDBA and the Commonwealth were negligent in managing the water flowing through the Murray Darling system and failed to properly consider the impact of climate change on water availability in the basin. The case is presently listed for trial commencing 11 August 2025.

A duty to prevent climate change is now recognised internationally

ICJ Advisory Opinion

At the request of the UN General Assembly and following a campaign led by Vanuatu and other small island States, on 23 July 2025 the ICJ delivered its advisory opinion clarifying States’ obligations under international law to prevent climate harm and the legal consequences for breach.[7]

(a) Legal obligations and duties

The ICJ unanimously found that the failure of a State to take appropriate action to protect the climate system may constitute an internationally wrongful act under various instruments, a breach of human rights and customary duties to prevent significant harm and to co-operate (for instance, the UNFCCC (United Nations Framework Convention on Climate Change), the Kyoto Protocol, and Paris Agreement).

'Extreme weather events, such as hurricanes, droughts and heatwaves, are becoming more frequent and intense, devastating agriculture, displacing populations and exacerbating water shortages. Furthermore, the disruption of natural habitats is pushing certain species toward extinction and leading to irreversible loss of biodiversity.'[8]

In respect of the various obligations and duties expected of States to take steps to prevent the impacts of climate change, the ICJ held:

• States have a duty to prevent significant harm to the environment by acting with due diligence. States must use all means at their disposal to prevent activities carried out within their jurisdiction or control from causing significant harm to the climate system and other parts of the environment.
• Measures States must take include mitigation and adaptation (with due account given to the protection of human rights), and the adoption of standards and legislation. The measures a State takes must also be based on the best available science and are required to be measures which are designed to achieve deep, rapid and sustained reductions of emissions that are necessary to prevent significant harm to the climate system.
• These measures also extend to regulating private business. States must exercise regulatory due diligence to regulate the activities of private actors contributing to climate change. Specifically, the ICJ held that a breach of this duty might consist of a failure of a State to take appropriate action to mitigate the effects of greenhouse gas emissions by approving fossil fuel exploration licenses or providing fossil fuel subsidies.
• States also have a duty to co-operate with each other in good faith to prevent significant harm to the climate system and other parts of the environment, which requires sustained and continuous forms of co-operation by States when taking measures to prevent such harm.

The duty has wide-reaching application, and the ICJ has reiterated that even if States are not party to a climate change treaty, customary obligations are nonetheless applicable. Non-party States also have the burden of demonstrating that their policies and practices conform with customary obligations to take all means at their disposal to protect the climate system in accordance with their capabilities and available resources.

(b) Legal consequences

As to the extent of the legal consequences that might flow, the ICJ held that breaches of the duty will be determined on a case-by-case basis. Some of the features the ICJ will look to include:

• If a breach has occurred, a State may provide restitution in the form of reconstructing damaged infrastructure, and restoring ecosystems and biodiversity. If restitution cannot be provided because it is impossible, States will have the obligation to provide compensation.
• If the extent of damage caused is uncertain, compensation may be provided in the form of a global sum, calculated within the range of possibilities indicated by evidence and other equitable considerations.
• The ICJ concluded that it is scientifically possible to determine the harm caused by emissions and to attribute liability for that harm by reference to a State’s total historical and current contribution to global emissions.

IACtHR Advisory Opinion – through the lens of human rights

In early July, the IACtHR delivered an advisory opinion in response to a request by Chile and Colombia to clarify the obligations of States under the American Convention on Human Rights and relevant international human rights law to respond to the climate emergency.[9]

The IACtHR confirmed that a healthy climate is a human right. It also recognised that the obligation not to cause irreversible environmental damage is a fundamental principle of international law – one that is so essential and universally accepted that no derogation is permitted.

The IACtHR also recognised that remedial measures, such as restitution, rehabilitation and compensation, should be based on the best available science and knowledge, and that States have specific obligations for vulnerable groups, such as children and indigenous peoples. For example, in the case of indigenous peoples who have to be relocated or displaced without the possibility of return, the Court found that these peoples should have access to land that is of similar quality and legal status, or receive compensation in cash or in kind.

Consistent with similar findings by the ICJ, the IACtHR also held that States are obliged to provide for effective mechanisms, both judicial and administrative, to enable victims to access full reparation.

Navigating the disconnect between the Australian and international approaches

Australia’s submission to the ICJ in advance of the Court’s advisory opinion rejected the imposition of further international legal obligations on States, beyond those already agreed to in the United Nations Framework Convention on Climate Change and Paris Agreement.

In its statement and comments to the ICJ, the Commonwealth Government highlighted that international treaties and customary rules were negotiated and developed in the context of protracted negotiations and careful compromise between States.

Considering the recent findings of Australian courts in cases like Pabai and Sharma, it remains to be seen how Australia will respond to ICJ and IACtHR decisions.

The following table navigates some of the current key differences between the approaches in Australian and international courts.

Looking ahead

While Australia remains cautious and judicially restrained in considering whether to recognise a positive duty on the government, international courts are setting more ambitious standards for State responsibility and climate protection, with significant implications for government policy, business risk management, and the future direction of climate law.  Developments in the climate duty space will only continue to grow and should be monitored to anticipate and adapt to potential changes in legal obligations.