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Should oil and gas companies pay for climate damages sustained by cities and individuals?  

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David Spence
(@davidspence)
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23/10/2019 7:13 pm  

I asked Michael Burger about climate litigation that tries to make them pay. Check out that discussion here: https://www.energytradeoffs.com/2019/09/26/michael-burger-climate-litigation-the-green-transition/

I challenged the tobacco litigation analogy as a stretch, for two reasons. First, there is an intervening cause in the oil and gas context -- namely, those who burn the fuels that create the emissions that create the problem for others. A better analogy would be to sue tobacco farmers for the harm caused by smoking. Second, demand for tobacco comes from addiction, and provides no social benefit. Demand for fossil fuels is certainly too high by virtue of the fact that externalities are not included in the price, but that enormous demand it also reflects enormous social benefits provided by fossil fuels. Hard to say the same with tobacco.

His answers to these questions are worth hearing.  And the opioid analogy seems much more apt, since manufacturers were held liable, third parties prescribe them, and opioids can provide significant benefits (to those who don’t abuse them).

What do you think?
 

 

 


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Alexandra Klass
(@alexandraklass)
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18/11/2019 1:52 am  

With regard to the climate change damages lawsuits by state and local governments, I think the analogy to both the tobacco litigation and the opioid litigation is quite reasonable based on the affirmative fraud and misrepresentation committed by the fossil fuel companies for so long with regard to the fact of climate change and the companies' contribution to it. During those decades of fraud and misrepresentation, the state and local government plaintiffs, other businesses, and consumers became more and more reliant on fossil fuels and convinced of the lack of substitutes. Thus, the defendants in these lawsuits not only caused the harm but prevented the government plaintiffs from avoiding the harm. Defendants also have refused to be part of any solution. The consumer protection-related claims are particularly strong in my view. With regard to nuisance claims, those will vary from state to state depending on how broad nuisance doctrine is in those states. Causation is certainly an issue, but the development of climate attribution theories and a growing amount of data tying a relatively small number of companies to the harm makes me think this is not insurmountable. All different types of plaintiffs lost tobacco lawsuits for many years before facts and, ultimately the law, began to work in their favor. The case brought by the State of Minnesota and Blue Cross Blue Shield resulted in millions of pages of documents being made available during discovery, months of jury trial, and ultimately a $6.6 billion settlement based on smoking-related costs incurred by the state and the insurance company. Cases like these were seen as impossible to ever win, until the plaintiffs started to win. And how we think about tobacco companies has changed significantly as a result. I agree that the use of fossil fuels has resulted in a significant amount of economic development and progress for many years, but the fossil fuel companies knew much earlier than the rest of us that there would be significant adverse consequences associated with that use and have done everything in their power, including fraud and misrepresentation, to prevent a transition to new technologies that would allow us to use far less fossil fuels than we do. I do not think it's too much of a stretch for that to result in legal consequences. Some energy transition efforts need to be forward looking--like a carbon tax, cap and trade, new technological developments, etc. But that does not mean we should completely ignore backward-looking liability approaches as well.


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David Spence
(@davidspence)
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21/11/2019 2:12 pm  

@alexandraklass, I don’t think I see these mass tort cases against extraction companies as strong cases, either ethically or legally. (So this does not address Juliana or the other cases aimed at more specific misconduct by companies, like securities fraud.) 

I agree about me about the moral culpability of companies who misrepresented what they knew about climate as part of their lobbying strategy.  I am not sure, but I don’t think the defendants in the climate tort cases are limited to that set of companies.  And by this logic, do the anti-mass transit lobbying activities of automakers make them retroactively liable for the harm caused by smog in LA? Wasn’t that as foreseeable then? Aren’t automakers (and refiners and power plant operators) more like cigarette manufacturers in this analogy?

I can see imposing ex post liability when the connection between the particular defendant’s conduct and the harm is clear and sufficiently direct. But like the judge in the CA cities case, I am troubled by the idea that intervening actors actually caused most of the harm (in a very indirect way, that diffuses and mixes globally), and did so because the underlying emitting activity provided enormous economic and social benefits.  In my conversation with Eric Biber, he said that we combustors are “caught in a system” that negates choice (and impliedly, responsibility) for the harm. But we also get a lot out of that combustion action—not just mobility, but a huge swath of the tangible benefits of modern life.

So these cases make me a bit uneasy.  I want to focus on getting carbon emissions to zero ASAP, and to me this seems like a a distraction, one that could delay policy progress.  Some people on my twitter feed have a mental picture of the people in the oil and gas industry — and of their attitudes toward this issue— that does not square with my experience at all. But perhaps that is an unfounded worry on my part.


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Alexandra Klass
(@alexandraklass)
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Joined: 6 months ago
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21/11/2019 3:25 pm  

On your point of the lawsuits being a distraction from more favorable policies, see what you think of this article discussing a new paper on different type of fossil fuel/clean energy policies and how most academics have ignored (to our detriment) supply-side policies that I (and others) would argue can include these types of lawsuits against the fossil fuel industry. I don't think the same claims can be made against industries where the harm was merely "foreseeable." The lawsuits for climate change damages are focusing on intentional fraud. As I mentioned before, I don't feel as strongly about the benefits and legitimacy of the public trust lawsuits and other non-damage lawsuits against other players in the industry as a legal matter, although those lawsuits also serve other purposes in terms of raising the profile of climate change, getting young people engaged, putting business pressure on users of fossil fuels, etc.


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