From Accounting to Accountability: Exported Emissions as a Due-Diligence Problem after the ICJ Climate Advisory Opinion

Abstract

The International Court of Justice’s 2025 Advisory Opinion on climate change affirms that states are bound by obligations of due diligence to prevent significant climate harm, assessed in light of foreseeability, capacity, and good faith. While the opinion has prompted renewed attention to territorial mitigation duties, its implications for fossil fuel-exporting states—whose principal climate impact arises through downstream, extraterritorial emissions—remain underexamined. The Advisory Opinion therefore shifts exported emissions from a question of accounting to one of regulatory accountability. This study argues that Scope 3 exported emissions are best understood not as a distinct category of climate responsibility, but as a question of regulatory diligence arising from state conduct that foreseeably enables climate harm. Rather than advancing claims of strict liability for downstream emissions, the study develops a structured due diligence framework for assessing export-related state conduct. It identifies three cumulative elements: (i) the foreseeability of downstream climate harm associated with fossil fuel exports; (ii) material contribution through state conduct, including licensing, project approvals, subsidies, and export facilitation; and (iii) the adoption of reasonable regulatory measures proportionate to capacity and circumstances. Applied to Australia, the study examines how export-oriented governance arrangements, particularly approval regimes and fiscal support mechanisms, sit uneasily with the due diligence standard articulated by the Court. It shows that the Advisory Opinion reshapes the legal assessment of what constitutes reasonable regulatory design in exporting states, even where downstream emissions fall outside territorial accounting frameworks. The study concludes by identifying illustrative governance indicators, such as climate-consistency testing for export approvals and the integration of downstream impacts into mitigation planning, which translate the Court’s reasoning into operational standards. In doing so, it offers a methodologically grounded contribution to climate governance debates without collapsing into claims of extraterritorial overreach.