The UK could face a bill of around £4 trillion and the prospect of 'national bankruptcy' due to a landmark International Court of Justice (ICJ) advisory opinion on climate change, according to a new report from the Policy Exchange think tank. The report warns that foreign states may sue the UK for greenhouse gas 'reparations' dating back to the industrial revolution.
Report Warns of Colossal Financial Risks
The ICJ issued its non-binding opinion in July 2025, endorsed by the United Nations General Assembly. The Policy Exchange report states that it 'exposes the UK to a new wave of litigation and to colossal financial risks' and calls on the government to 'take immediate action to protect the UK'. In a worst-case scenario, lawsuits could 'lead to national bankruptcy'.
The authors warn it 'seems almost certain that the UK will be a target for litigation' as 'underdeveloped countries and various other parties allege breach of international obligations relating to climate change'. If the UK were held responsible for 3% of all global emissions, the bill would amount to just over £4 trillion.
Legal and Political Figures Sound Alarm
Senior judicial and political figures have expressed concern. Former Foreign Secretary Sir Malcolm Rifkind called it 'ridiculous' to target the UK, noting that the industrial revolution 'resulted in extraordinary economic growth and the reduction of poverty throughout the world'. He added that countries like China, India, Japan, and others in Asia and Latin America now have a greater impact on carbon emissions.
Former Australian foreign minister Alexander Downer warned: 'Climate change cannot be fought with reparations. International law will not be made stronger by legal over-reach. And energy policy should never be made by judges.'
Concerns Over North Sea Oil and Gas Licences
The report also raises concerns that the ICJ opinion could be used to block new North Sea oil and gas licences. It calls for Britain to withdraw from the 'compulsory jurisdiction' of the ICJ to protect against such legal challenges.
Lord Burnett, a former Lord Chief Justice of England and Wales, said: 'Climate change is a real and urgent problem; so too is the expanding use of the ICJ’s advisory jurisdiction. It is a matter for our politicians to consider whether to take steps to protect the UK from its consequences.'
Former Supreme Court Justice Lord Sumption commented: 'The function of a court of law, whether international or domestic, is to declare the law as it is, and not as its judges conceive that it ought to be.'
