State responsibility and compensation for climate change damages—a legal and economic assessment

Customary international law has that countries may do each other no harm. A country violates this rule if an activity under its control does damage to another country, and if this is done on purpose or due to carelessness. Impacts of climate change fall under this rule, which is reinforced by many declarations and treaties, including the UNFCCC. Compensation for the harm done depends on many parameters, such as emission scenarios, climate change, climate change impacts and its accounting. The compensation paid by the OECD may run up to 4% of its GDP, far exceeding the costs of climate change to the OECD directly. However, the most crucial issues are, first, from when countries can be held responsible and, second, which emissions are acceptable and which careless. This may even be interpreted such that the countries of the OECD are entitled to compensation, rather than be obliged to pay. State responsibility could substantially change international climate policy.