The ruling by The Hague District Court could lay the foundations for similar cases around the world, said the director of Urgenda, the organization that took the government to court on behalf of 900 Dutch citizens.
Climate activists in the packed courtroom clapped and cheered as Presiding Judge Hans Hofhuis read the ruling, which Greenpeace called "a game-changer in the fight against climate change."
The ruling came in the same month that Pope Francis released a massive encyclical on the environment urging nations to quickly overhaul their economies to cut emissions and save the Earth. Neighboring France will also host a key U.N. conference later this year in Paris where it's hoped that a worldwide accord to fight global warming will be signed.
The Dutch plaintiffs argued — and the court agreed — that the government has a legal obligation to protect its people against looming dangers, including the effects of climate change on this low-lying country. Large swaths of the Netherlands are below sea level and vulnerable to rising sea levels blamed on global warming.
"This is a great victory. The judge said exactly what we wanted and had the courage and wisdom to say to the government 'you have a duty of care toward your citizens,'" said Marjan Minnesma, the director of Urgenda.
The Dutch government, which can appeal, said it was studying the ruling.
Environment Minister Wilma Mansveld said the government and Urgenda "share the same goal. We just hold different opinions regarding the manner in which to attain this goal."
Mansveld said the Dutch are working toward European Union greenhouse targets — cutting emissions by at least 20 per cent by 2020, compared with benchmark 1990 levels.
"Preventing climate change is the most successful when as many countries as possible join forces," Mansveld said.
The Dutch court said, based on current government climate policy, the Netherlands will cut its emissions by only 17 per cent by 2020.
"The state must do more to avert the imminent danger caused by climate change, also in view of its duty of care to protect and improve the living environment," read a statement from the court.
To avoid the most dangerous impacts of climate change, which is caused by heat-trapping carbon dioxide being released by burning fossil fuels, countries around the world have agreed that global temperatures should stay below a 2 degrees Celsius (3.6 F) rise compared to pre-industrial times.
A U.N. climate science panel has stated that to have a two-thirds chance of staying below that mark the world must cut emissions by some 40 to 70 per cent by 2050.
While the Netherlands is known as a land of windmills, it lags behind some of its European neighbours in the amount of energy it produces from clean, renewable sources like wind or solar power.
Only five per cent of Dutch energy comes from renewables. Germany generates nearly a quarter of its power from renewable sources and the United Kingdom reported in February that renewable energy made up 15 per cent of the country's production in 2013.
In contrast, the United States got 13 per cent of its electricity generation from renewable sources in 2014.
The Dutch court said it was difficult to judge the economic impact of its ruling on Dutch companies but said "climate policy can have a negative effect for one sector, but a positive effect for another."
Overseas groups hailed the decision as a victory.
"The verdict is a milestone in the history of climate legislation, because it is the first time that a government was ordered to raise its climate ambition by a court," said Wendel Trio, Director of Climate Action Network Europe. "We hope this kind of legal action will be replicated in Europe and around the world."
Trio felt that the Dutch court did not go far enough.
"The target should be much higher than 25 per cent in order to be truly in line with what is needed to tackle climate change," he said.
It remains unclear exactly how the court can enforce its ruling. It has the power to impose fines on those failing to carry out its orders, but it has never used such powers against the Dutch government and Urgenda did not request such a move, said judge Peter Blok.
Activists say a similar case is coming in Belgium. In Norway, a coalition of non-government groups is working on a case challenging the Norwegian government's licensing of new oil blocks in the Arctic, saying it violates the constitutional obligation to protect the climate.
Bill Hare, senior scientist at Climate Analytics, a non-profit organization based in Berlin, said the Dutch ruling's impact could be massive.
"(This) has the potential to become a precedent whose effect will ultimately flow through to undermining the markets for coal, oil and gas," he said.
Dutch business organization VNO-NCW did not immediately respond to requests for comment about the ruling's possible effects on its members.
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