Polluters Are Trying to Ensure They’re Never Held Responsible for Climate Change
As the devastation of climate change is seen all around us, fossil-fuel companies are working overtime to avoid legal responsibility for the crisis — and offload the costs of environmental damage onto the public.
Climate change–fueled wildfires have blazed across California this summer. (Felton Davis / Flickr)
Last week, Hurricane Ida wreaked havoc from Louisiana to New York — but that wasn’t the only part of the country or world experiencing extreme weather events. The day before Ida raged through New Orleans, fire tornadoes blazed in California, a state currently grappling with more than a dozen active wildfires. The entire Pacific Northwest has been plagued by drought and heat waves all summer. The turmoil hasn’t been limited to North America. Italy, Lebanon, Siberia, Spain, Turkey, and Greece have been experiencing wildfires, while the Chinese province of Shaanxi has been struggling with extreme flooding and landslides.
The culprit is easily identified: man-made climate change. In recent years, “attribution science,” or the science of identifying causal connections between climate change and individual weather events, has become much more accurate. And last month, for the first time, the Intergovernmental Panel on Climate Change (IPCC) asserted that human activity is the driving force behind planetary warming. “It is unequivocal that human influence has warmed the atmosphere, ocean and land,” noted the new report.
According to the well-established “polluter pays” legal principle, those responsible for this warming should be held liable for the cost. Sure enough, the fossil fuel industry has increasingly found itself in the legal crosshairs of governments, impacted communities, students, and activists all over the world, especially in light of investigations showing that companies like Exxon knew about the dangers of climate change decades ago, did little to address it, and even misled the public on the dangers.
According to a January report from the UN’s Environment Programme, the number of climate change cases filed against countries and corporate actors nearly doubled in the past few years, with at least 1,550 cases filed as of July 2020. In the United States alone, twenty-four climate lawsuits — including some related to climate change–fueled wildfires — are currently moving through the courts. In February, the International Bar Association even released a model for litigants to pursue legal action related to climate change.
But the biggest polluters have yet to face meaningful consequences for planetary destruction — and it remains to be seen if they ever will. As efforts mount to hold polluters accountable, fossil fuel companies and other corporate interests are working overtime to leverage the US court and political system to avoid responsibility for the climate crisis — and offload the costs of environmental damage onto taxpayers.
“Courts are increasingly going to be asked that question of who is going to pay [for climate change],” says Korey Silverman-Roati of Columbia University’s Sabin Center for Climate Change Law — but right now, no one knows the answer.
Legal Obstacles
Efforts to hold companies legally responsible for climate change have long been stymied by a series of hurdles. One potential hurdle could be the issue of causation. As the American Bar Association (ABA) noted in an October 2020 article, “Unlike other air pollutants that have health and environmental impacts on the ground, greenhouse gases interfere with our climate high in the Earth’s atmosphere. As a result, most people do not experience direct harm from the emission of greenhouse gases.”
But the issue of causation might not be as thorny as some people think, says Silverman-Roati. Plus, the new IPCC report’s conclusion that humans are to unequivocally blame for climate change could go a long way towards resolving the question.
Even before that issue can be tackled, however, another challenge remains. “Right now, the obstacle is this fight over whether [climate cases] are going to be heard in state or federal court,” says Silverman-Roati.
The venue issue has played a major role in a 2018 nuisance lawsuit filed by the city of Baltimore, Maryland, against twenty-one fossil fuel companies including ExxonMobil, Royal Dutch Shell, BP, and Chevron for their role in the climate crisis. A port city, Baltimore alleged that it is “particularly vulnerable to sea level rise and flooding.” It further alleged that it had already spent substantial capital as a consequence of the climate crisis. The companies, the city argued, had worsened the crisis with their misleading marketing and fossil fuel production.
The fossil fuel companies fought to get the case moved to federal court, perceiving it to be a friendlier venue. That’s because, in 2011, the Supreme Court held that the Environmental Protection Agency’s authority to enact environmental regulations displaced federal common law climate liability claims.
“The fossil fuel companies are fighting hard to argue that the state law claims are preempted and that the plaintiff’s claims are actually federal common law claims,” explained Silverman-Roati. “If they can do so, then they can… say that the [state] claims should be dismissed, due to EPA’s authority.”
The lower courts sided with Baltimore, which argued state law should govern the claims, but the Supreme Court reversed that ruling last May — sending the matter back to the Court of Appeals for a final decision.
US-based climate litigants also struggle with the issue of standing, in terms of whether they can prove they have been sufficiently harmed by the polluters to take the matter to court.
In 2006, the Supreme Court ruled that states had standing to sue the EPA for the damage wrought by global warming, given the agency’s authority under the Clean Air Act to regulate greenhouse gas emissions. But for other plaintiffs, the issue of standing is not quite so clear.
That matter could be addressed in the potentially historic case of Juliana v. United States. In that case, twenty-one youth plaintiffs between the ages of eight and nineteen filed suit against the Obama administration in 2015. The suit alleged that the federal government had contributed to the climate crisis, violating plaintiffs’ constitutional rights to life, liberty, and property under the Fifth Amendment’s due process and equal protection clauses.
The Ninth Circuit Court of Appeals ruled that the youth plaintiffs lacked standing in January 2020 due to the fact that the relief sought — an order for the federal government to implement a plan to phase out fossil fuel emissions — was not within the court’s power to grant. However, the plaintiffs have since sought to amend their complaint to seek a declaratory judgment instead, and the government has agreed to settlement talks. Those talks are ongoing.
Outside the United States, climate litigation has recently proved to be more successful in holding fossil fuel companies accountable. Last May, a district court in the Netherlands ordered Royal Dutch Shell to slash greenhouse gas emissions from 2019 levels by 45 percent within the decade. The next day, in Australia, a judge found that the minister of the environment had a duty to protect the country’s youth from the future harms of climate change.
Who’s Going to Pay?
Fossil fuel interests have another way to avoid responsibility for their actions: going belly-up. That’s because these companies are protected by corporate and bankruptcy laws when they fail.
A report from the nonprofit watchdog group Public Citizen found that the US fossil fuel companies that filed the twenty-five largest bankruptcy cases between 2018 and 2020 still paid out roughly $200 million in bonuses, retention payments, and severance to their executives — all while laying off thousands of workers as share prices plummeted.
Worse, when fossil fuel companies go bankrupt, taxpayers can be left on the hook for cleanup of so-called “orphan” oil and gas wells that the companies cannot afford to plug and are therefore prone to leaks.
Some states make companies pay the cost of plugging these wells up front by charging them fees, but it’s no guarantee that the burden won’t eventually shift to taxpayers.
For example, Pennsylvania has a program that relies on drilling permit fees to fund plugging orphan wells, but in 2018, the program could only afford to cover six of the more than 8,000 orphan wells in the state.
Colorado has a bonding regime, where operators have to post monetary bonds depending on the number and depth of wells, but that has also proven to be too limited. According to the independent think tank Carbon Tracker, Colorado’s program only covers about 2 percent of the nearly $7 billion needed to clean up the wells already dug in the state. The arrangement allows fossil fuel companies to pay pennies on the dollar to plug wells.
Pushing for Immunity
Fossil fuel companies, meanwhile, are fighting back against efforts to make them pay.
One tool in their arsenal is election spending — including in judicial elections. For example, fracking companies and fossil fuel interests spent tens of thousands of dollars on the 2014 election campaign for Ohio Supreme Court Justice Judith French, who authored a 2015 opinion preventing localities in the state from regulating fracking.
The other major tool the industry has is lobbying. The American Petroleum Institute, a powerful fossil fuel industry lobbying group, raised nearly $240 million in 2019, according to its most recent tax return. The group spent $32 million on lobbying and consultants and nearly $11 million to fund studies and research. The group regularly pressures regulatory agencies to write rules in ways that protect oil and gas companies.
Meanwhile, in 2017, fossil fuel companies Total, BP, Shell, ExxonMobil, and ConocoPhillips formed the so-called Climate Leadership Council (CLC) to push for legal immunity for fossil fuel companies. The group’s plan has been to implement a small tax on carbon emissions that would come with a liability waiver for climate-related lawsuits.
Big tech giants have also joined the push for climate immunity. In May 2019, for example, Microsoft became a member of the CLC. And in June of this year, tech companies including Amazon, eBay, Facebook, Salesforce, and the parent company of Google partnered with Chevron to author a letter asking the Securities and Exchange Commission to limit climate disclosures in their public filings, in part to reduce legal liability from climate-related shareholder lawsuits.
“We recognize that climate change is an urgent global challenge that demands collective action,” noted the letter, but then added, “it is important not to subject companies to undue liability, including from private parties.”
The Fight Moves to Washington
The issue of corporate liability for climate change may soon be coming to a head.
In June 2020, congressional Democrats released their signature plan to deal with climate change, which, while limited in scope, included a demand that fossil fuel companies not be granted immunity in exchange for a carbon tax.
“Congress should not offer liability relief or nullify Clean Air Act authorities or other existing statutory duties to cut pollution in exchange for a carbon price,” it read.
Whether polluters score that immunity could become a major point of contention in negotiations over a federal carbon tax legislation first circulated last month.
If so, fossil fuel companies — and their proxies in the Republican Party and even a few Democrats — are likely to fight hard to make sure they’re not held accountable.