What Does the International Court of Justice Advisory Opinion on Climate Change Mean for Environmentally Harmful Subsidies?

This briefing by the International Institute for Sustainable Development (IISD) analyzes the implications of the July 2025 International Court of Justice (ICJ) Advisory Opinion on the Obligations of States in Respect of Climate Change, specifically regarding environmentally harmful subsidies. It argues that the ICJ's findings transform the phase-out of fossil fuel subsidies from a political commitment into a legal imperative, potentially exposing states to international and domestic litigation.

• The International Court of Justice (ICJ) determined that the provision of fossil fuel subsidies may be an internationally wrongful act and falls under conduct that can breach international law. The court clarified that legal obligations regarding climate change extend beyond direct emissions to include the "production, licensing and subsidizing" of fossil fuels.
• While the ICJ explicitly mentioned fossil fuel subsidies, the briefing suggests its reasoning applies by analogy to other climate-harmful subsidies, such as those for plastics and agriculture. This is based on the court's view that relevant conduct includes all state actions or omissions that result in the climate system being adversely affected by anthropogenic greenhouse gas emissions.
• The standard of due diligence for phasing out subsidies is influenced by a state's capabilities and resources. However, the ICJ maintains that even states with limited resources must use all available means to protect the climate system.
• Global government support for environmentally harmful subsidies exceeds USD 2 trillion annually, with fossil fuel subsidies accounting for USD 900 billion in 2024. Despite political pledges from the G7, G20, and APEC, fossil fuel subsidies in G7 countries increased from USD 66.8 billion in 2014 to USD 133 billion in 2024.
• The Kunming-Montreal Global Biodiversity Framework's Target 18 mandates the identification of harmful incentives by 2025 and their elimination or reform, aiming for a reduction of at least USD 500 billion per year by 2030.
• States face increased legal risk following the ICJ opinion, particularly those that have accepted the ICJ's compulsory jurisdiction, who represented 49% of the total volume of fossil fuel subsidies in 2023. To mitigate this risk, the briefing recommends transparency, a phased approach to removal, shifting support to green solutions, and international coordination through groups like the Coalition on Phasing Out Fossil Fuel Incentives Including Subsidies (COFFIS).

APA

International Institute for Sustainable Development (n.d.). What Does the International Court of Justice Advisory Opinion on Climate Change Mean for Environmentally Harmful Subsidies? https://www.iisd.org/system/files/2026-03/icj-advisory-opinion-environmentally-harmful-subsidies.pdf

Chicago

International Institute for Sustainable Development. What Does the International Court of Justice Advisory Opinion on Climate Change Mean for Environmentally Harmful Subsidies? n.d. https://www.iisd.org/system/files/2026-03/icj-advisory-opinion-environmentally-harmful-subsidies.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=What Does the International Court of Justice Advisory Opinion on Climate Change Mean for Environmentally Harmful Subsidies? |url=https://www.iisd.org/system/files/2026-03/icj-advisory-opinion-environmentally-harmful-subsidies.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndwhat, author = {{International Institute for Sustainable Development}}, title = {{What Does the International Court of Justice Advisory Opinion on Climate Change Mean for Environmentally Harmful Subsidies? }}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/2026-03/icj-advisory-opinion-environmentally-harmful-subsidies.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }