A recent wave of government climate change lawsuits against oil and gas firms may prove deeply harmful, actually inhibiting the growth of new, greener technologies by diverting resources that would otherwise fuel innovation, according to a May 16 issue brief from the Pacific Research Institute (PRI).
“Global climate change policies should solely focus on creating positive incentives for innovation.
“The court cases filed by the municipalities worsen the market environment and are, consequently, an obstruction to the development of these next-generation technologies.”
Over the past half-decade, high-profile suits have pitted San Francisco and Oakland, California; New York City; Baltimore; Boulder, Colorado; and other municipalities against heavy hitters in the traditional energy sector.
A California judge dismissed that suit as well as an associated Oakland suit in 2018. He argued that the judicial branch isn’t the place to address climate change, stating that “the court will stay its hand in favor of solutions by the legislative and executive branch.”
“This order accepts the science behind global warming. So do both sides. The dangers raised in the complaints are very real. But those dangers are worldwide. Their causes are worldwide. The benefits of fossil fuels are worldwide. The problem deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case,” wrote Judge William Alsup, a Clinton appointee, in his order granting dismissal of the cities’ complaints.
“The concept that they can assess these damages and attribute them to oil companies is far-fetched,” Winegarden told The Epoch Times on May 17.
A key point of contention has been whether those suits belong in federal or state courts. Fossil fuel companies favor the former venue, while governments prefer the latter.
Just weeks ago, the 4th Circuit Court of Appeals again ruled that Baltimore’s climate damages lawsuit against oil companies should be heard in the State of Maryland’s court system. The court’s previous ruling on the suit had been reversed by the Supreme Court in 2021.
“The state court is a more favorable jurisdiction for these cases,” Winegarden said.
That Clean Air Act precedent stems from an 8–0 Supreme Court decision in 2011, “American Electric Power Co., Inc. v. Connecticut.”
The majority opinion, authored by Associate Justice Ruth Bader Ginsburg, noted that the Clean Air Act delegates decision-making on emissions to the Environmental Protection Agency (EPA).
“Local and state government plaintiffs want the cases to remain in state court, where they can argue that climate nuisance claims are similar to past common law efforts to hold companies accountable for misleading the public about their products’ harms, like those against tobacco companies,” Silverman-Roati wrote.
Donald Kochan, an economist at Virginia’s George Mason University, doesn’t buy the tobacco comparison.
“Tobacco was not a regulated industry, whereas coal, oil, and gas are all heavily regulated,” Kochan told The Epoch Times.
Both Congress and the EPA can come up with new laws for the hydrocarbon sector.
It’s also much easier to trace individualized harms to tobacco—say, a case of lung cancer in a longtime cigarette smoker. Yet, in both cases, similar incentives may be at play. Kochan pointed out that the tobacco cases netted billions for plaintiffs’ lawyers.
Lawyers on the other side also profited. In 1997, defense attorneys reportedly cost the tobacco industry $600 million per annum.
A climate litigation database that shows up near the top of Google search results is maintained through a venture between Columbia’s Sabin Center and the law firm Arnold & Porter Kaye Scholer LLP. It focuses in part on litigation, including climate change litigation.
In his brief, Winegarden argued that much of the financial burden of successful climate lawsuits will be borne by consumers.
“While tracing out the impacts from all these costs is difficult, the close historical relationship between the price of oil and the price of gasoline provides a partial sense of the costs that will be imposed on the broader economy,” he wrote.
Republican lawmakers have often linked the current spikes in energy prices to policy decisions under the Biden administration. Their Democratic colleagues, by contrast, have frequently blamed costlier gasoline on price-gouging by corporations.
President Joe Biden could grant it that authority by declaring an “energy emergency.” He could extend that emergency indefinitely.
Kochan, like Winegarden, has doubts about the legal basis of cities’ lawsuits against energy companies.
“The argument for common law development is that it evolves slowly and incrementally. It is not meant to be an open vehicle through which dramatic changes in liability assessment or liability formations can be suddenly and quite dramatically changed by courts,” he said.
John Dernbach, a professor at the Widener University Commonwealth Law School specializing in environmental law, has a different perspective.
“The municipalities and other plaintiffs in these cases are claiming that the actions of the fossil fuel companies damage them. These cases are intended to compensate the plaintiffs for real damage they have suffered and will continue to suffer. They have every right to be heard in court on these claims,” he wrote in an email to The Epoch Times.
Climate nuisance litigation, Winegarden argued, is in line with a broader attempt to implement expansive climate policy at every level, including across the federal government.
“Litigation just doesn’t fit into that,” Winegarden said, in an echo of Alsup’s concern about judicial overreach.
Winegarden would like to cut the marginal tax rates of companies working on innovations that might curb greenhouse gas emissions. Yet, such cuts shouldn’t tip the scales in favor of particular technologies or firms.
“When we get political favorites, you skew the trade-offs, because you start not looking at the costs of some technologies or the benefits of others,” he told The Epoch Times.
One example of that politicized disfavor may be natural gas. Winegarden’s brief noted that it has been the subject of climate change litigation despite its major role in reducing U.S. carbon intensity in recent years.
The Epoch Times has sought comment from New York City, one of the municipalities suing energy companies over climate change, as well as legal scholars and lawyers known to support climate litigation.
In addition, The Epoch Times has reached out to The Wilderness Society, an environmental nonprofit focused on preserving open public lands.
