The higher regional court in the northwestern city of Hamm said on Thursday that farmer Saul Luciano Lliuya's case against German energy company RWE was "well founded" and could go ahead.
The decision clears a major legal hurdle for the Lliuya, who is demanding the company pay €17,000 ($20,000) to cover the costs of protecting his hometown in the Peruvian Andes.
The 37-year-old farmer also wants to be reimbursed for the €6,384 he has already spent on flood defenses.
Lliuya says a melting glacier flowing into a mountain lake above the city of Huaraz is putting about 50,000 local residents at risk of flooding and landslips. He is making the case that RWE's coal-fired power plants have contributed to climate change, and therefore are partly to blame for rising temperatures in the Andes.
"Even people who act according to the law must be held responsible for damage they cause to property," the judges in the Hamm court said.
Now the court must decide whether "the accused's contribution to the chain of events depicted here is measurable and calculable," they added.
Decision with 'global relevance'
Klaus Milke, chairman of environmental campaign group Germanwatch, who is advising Lliuya, described the decision as an "historic breakthrough with global relevance."
Thursday's ruling marks the first time a German court has acknowledged that carbon emitters may have to contribute towards protecting vulnerable parties from climate change-related damage.
"This really is a great success, not only for me, but for all the people here in Huaraz and other parts of the world threatened by climate-related risks," Lliuya said, following the court's decision. His claim is based on a 2013 climate study that found RWE was responsible for 0.47 percent of all global emissions "since the beginning of industrialization."
"From here it'll be about proving RWE's contribution to glacier loss in Peru," he added. "We've still got a long way to go, but as a mountaineer, I'm used to long, rocky roads."
RWE, Germany's second biggest energy provider and one of Europe's top carbon emitters, said the farmer's argument was inadmissible.
"We don't believe it's possible under civil law to hold a single emitter responsible for something that countless human and natural resources also contribute to," a spokesman for the company said.
If ultimately successful, Lliuya's claim could open the door for further so-called "climate justice" cases seeking compensation from energy companies for the consequences of global warming.
What happens next?
A spokesman for the Hamm court said experts would be chosen to test the plaintiff's claims about Lake Palcacocha's water level and RWE's contribution to global warming.
Lliuya will have to pay €20,000 in fees up front to pay for the expertise and collection of evidence. The next court hearing will examine these findings.
The farmer's case against RWE was initially thrown out by the Essen District Court last December. Lliuya filed an appeal at the Higher Regional Court in Hamm one month later. An initial hearing in mid-November gave both sides until Thursday to provide further arguments to help them decide whether the case should go ahead.
nm/msh (AFP, Reuters, EFE)