Climate Change Regulation 2026

An Unsettled Year

It has been an unsettled year for climate law. Every jurisdiction covered by this year’s edition of the Guide now has binding emissions commitments, and, with one exception, none has weakened its headline goal in the past 12 months. New Zealand is that exception, having reduced its 2050 target for biogenic methane in December 2025. The harder task of meeting those targets has arrived at a difficult moment, with energy costs high, defence budgets rising and industry pressing for relief from carbon costs its competitors do not face.

Against the backdrop of a growing challenge to the necessity of climate regulation at the state and federal level in the United States and more jurisprudence articulating the role played by climate change in the legal duties of nation states and public authorities, we are beginning to see the gradual evaluation of the form and substance of climate disclosure regulation and the principles governing the voluntary carbon market. The unanimous advisory opinion of the International Court of Justice (ICJ) on states’ legal duties to address climate change affirmed that a clean, healthy and sustainable environment is fundamental to all human rights and that a failure to meet those duties through inaction, fossil fuel subsidies or lack of regulation may expose those states to legal accountability including claims from affected states and potentially individuals. While this opinion may support the growing volume of global climate litigation, it remains to be seen whether the ICJ will influence nation states in their evaluation of existing and developing national climate regulation. We have however begun to see the opinion being cited in national jurisprudence; eg, in Canada.

The story isn’t simply one of fracturing standards and expectations. There is also a strong countervailing pull towards harmonisation. The standards issued by the International Sustainability Standards Board appear to be becoming a reference point for certain jurisdictions. The United Kingdom and European Union have agreed in principle to link their emissions trading systems and to exempt goods moving between them from each other’s border levies.

Turning Towards Adaptation

The most significant shift of the year concerns the balance between reducing emissions and preparing for the consequences of climate change-related events. At the climate conference in Belém in November 2025 (COP30), governments were unable to agree a pathway away from fossil fuels despite the support of more than 80 countries and reached no conclusion on deforestation. They did agree to call for a tripling of adaptation finance by 2035 and adopted a set of indicators for measuring progress under the Global Goal on Adaptation.

COP30 also produced an acknowledgement no previous meeting had made: that temperature rise above pre-industrial levels is likely to exceed 1.5°C, and that the task is now to limit the extent and duration of that overshoot. This is a meaningful change as expenditure on resilience appears less as a concession and more as a necessity. This narrative has seen support across the political spectrum, particularly in the UK. This matters because almost all existing climate law addresses emissions. Very little addresses their consequences. Carbon pricing, emissions trading, disclosure standards, border measures and credit markets all address emissions. There is no established equivalent for resilience. Germany’s Federal Climate Adaptation Act, in force since July 2024, remains one of very few dedicated adaptation statutes anywhere, creating measurable goals for climate adaptation for 2030 and/or 2050.

What About All the Targets?

The 2035 round of national commitments under the Paris Agreement has now been submitted, with the United Kingdom pledging a reduction of at least 81% against 1990 levels and Canada 45 to 50% against 2005. No jurisdiction covered by this Guide has revised its headline target downward. However, that is a narrower claim than it may first appear: an unchanged target and an achievable one are not the same thing, and in several cases the mechanisms meant to deliver the target have been eased while the target itself has stayed fixed.

Canada removed its federal consumer fuel charge in April 2025 and suspended federal clean electricity rules in Alberta, while proposed securities disclosure requirements were paused. Across the European Union, sustainability reporting was first delayed and then, in March 2026, the number of in-scope reporting entities was narrowed considerably. Italy has legislated for a compensation mechanism for companies facing emissions trading costs and has asked the European Commission to suspend the Carbon Border Adjustment Mechanism in certain sectors. New Zealand has gone further than most, removing the requirement for its emissions trading scheme settings to align with its international commitments and directing the scheme instead at domestic budgets. At the same time, Germany has designated renewable projects as being in the overriding public interest, with onshore wind permits rising by 90% in 2024 and a further 48% in 2025, and has reformed its carbon storage legislation to permit offshore pipelines and storage.

In carbon markets, regulatory infrastructure is beginning to mature in certain jurisdictions in respect of voluntary carbon markets without merging into regulated compliance carbon markets. The European Union’s certification framework for carbon removals took effect in December 2024, with detailed implementing rules following in November 2025. Portugal now operates a statutory voluntary market with a public registry, qualified verifiers and approved methodologies, and allows credits carrying wider environmental benefits, opening a route towards biodiversity credits that few other jurisdictions have taken. New Zealand is extending recognition beyond forestry to wetland restoration, peatland rewetting and nature-based or technological removals. Among the jurisdictions in this Guide, none has yet authorised a single project or issued a letter of authorisation under Article 6 of the Paris Agreement, despite the rules being finalised nearly two years ago.

Border measures have proved the most influential. The European Union’s Carbon Border Adjustment Mechanism entered full operation on 1 January 2026, and its effects are already visible across EU member states and beyond. Canada retained industrial carbon pricing in part because carbon costs paid domestically reduce the liability of its exporters at the European border. The United Kingdom’s equivalent regime will apply from January 2027.

Court-Watching

The ICJ’s opinion joins a series of recent international judicial decisions on climate obligations, including opinions from the Inter-American Court of Human Rights in July 2025 and the International Tribunal for the Law of the Sea in May 2024, signalling a growing convergence in the interpretation of climate-related duties under international law. Across our surveyed jurisdictions, the constitutional starting points differ sharply. Germany’s Federal Constitutional Court held in 2021 that inadequate planning beyond 2030 unlawfully shifted the burden of reduction onto future generations (triggering a tightening of emission reduction targets for 2030 and 2045), and Italy amended its constitution in 2022 to protect the environment and ecosystems in the interests of those generations. Canada has no equivalent provision and resolves climate questions through the division of powers between federal and provincial governments. New Zealand’s climate statutes sit outside its unwritten constitution and are not entrenched, so they can be amended by ordinary parliamentary majority. The United Kingdom relies on the Climate Change Act 2008 rather than constitutional protection, though courts have enforced specific duties under it.

In Germany, Saul v RWE has given rise to more litigation seeking to enforce or expand legal obligations for emission reductions and push for greater transparency and accountability. While Italian climate litigation is at an early but rapidly developing stage, the courts are beginning to affirm the potential jurisdiction of the courts over climate-related claims and consider European human rights jurisprudence. Meanwhile, Dutch jurisprudence continues to fascinate climate change legal experts. A Dutch court held in January 2026 that national climate policy breached human rights obligations owed to residents of Bonaire. The Dutch state will appeal the decision. Further, in May 2026 a Dutch environmental organisation began a second claim against Shell, this time arguing that because climate harm occurs throughout the Netherlands, any Dutch court may hear it. If that argument is accepted, companies anywhere could be sued and become a hub for private enforcement of climate obligations globally. New Zealand’s Supreme Court recently declined to strike out claims in respect of a proposed novel tort of “climate system damage” against corporate defendants. 

A Clear Steer

In a period of some divergence and mostly stocktaking for the covered jurisdictions, this Guide aims to set out what is required in each jurisdiction that it covers, and to allow readers to see where approaches are converging and where they are not. We are grateful to the contributing authors for the time and expertise they have given to this edition.