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Climate

Climate damage and liability, Part 2 of 4

(This is Part 2 of a four part article being published in the Lawyer’s Daily, based on a lecture I gave for Osgoode Hall Law School and the York Faculty of Environmental Studies.)

As shown in Part 1 of this article, the climate crisis is already causing large financial losses, and much more is ahead. Governments and individuals will increasingly face overwhelming bills. Most of the fossil fuels that are driving this crisis have been produced and sold by 103 companies, the Carbon Majors. Can they be made to pay for the resulting damage?

In Part 1, I showed some of the reasons why I expect governments, courts and public opinion to increasingly welcome the idea of making the Carbon Majors pay. When that appetite grows, lawyers will have options to offer, including:

  1. Suing governments, so that they make the Carbon Majors pay, and
  2. Suing the Carbon Majors directly.

Suing governments

A generation ago, courts usually refused jurisdiction over public policy issues that involved the public purse. They called them “non-justiciable”. But as the climate crisis worsens, even judges in their protected enclaves are starting to understand our deep jeopardy, and to think again before throwing cases out of court.

The leading world case on justiciability of government climate action is Urgenda v. Netherlands, Supreme Court of the Netherlands, December 20, 2019. Other cases are spreading around the world. (Full English text here.)

In Urgenda, an NGO asked the courts to force the Dutch government to keep its international commitment to limit the emission of greenhouse gases (GHGs) by at least 25% by the end of 2020, compared to 1990. The Dutch government did not deny the seriousness of the climate crisis, but absolutely denied that it was the proper role of the courts to make the government act.

The trial court issued the order requested by Urgenda in 2015. The Dutch government appealed, but the order has now been upheld by the Dutch Supreme Court. The Court ruled that the Dutch government’s failure to slash GHG emissions breached its obligations under the European Convention for the Protection of Human Rights and Fundamental Freedoms. The Convention gives Dutch residents the right to life, and the right to respect for private, family and family life. As a party to the Convention, the Netherlands is obliged to take appropriate measures when it knows of a real and immediate risk to human life or well-being. The Court ruled that the climate crisis creates such a real and immediate risk, because there is a serious risk that dangerous climate change will occur that threatens the lives and well-being of many in the Netherlands.

The Netherlands, like Canada, is a also party to the United Nations Convention on Climate Change. The aim of that treaty is to keep the concentration of GHGs in the atmosphere low enough to prevent major disturbances of the climate system. To achieve this, all countries must take measures to prevent climate change, in accordance with their responsibilities and capacities.

Every country is therefore responsible for its share of emissions. The Court rejected the argument, often heard in Canada, that the Netherlands’ own emissions are relatively small on a global scale and that reducing their own emissions will not alone solve the global problem. This, the Court ruled, cannot relieve the Netherlands of the obligation to do its part, and to appropriately reduce GHG emissions from its territory. 

Scientific evidence, summarized in the reports of the Intergovernmental Panel on Climate Change, show a great deal of consensus about the urgent need for rich countries to reduce their GHGs at least 25-40% by 2020. It is therefore the obligation of the Netherlands to do so. The government had failed to justify its policies to defer emission reductions to later years, given the strong evidence that leaving reduction measures until later means they will have to be more drastic and costly, while also causing a greater risk of abrupt climate change. 

On the question of justiciability, the Court acknowledged that decision-making on how to reduce GHG belongs to the government and parliament. They have a great deal of freedom to make the necessary political decisions. But it is the task of the courts to ensure that the government and parliament act within legal limits, such as their constitutional obligation to protect the right to life. It is an essential part of a democratic constitutional state for courts to offer citizens legal protection even against the government. The government does not protect citizens’ constitutional right to life when it defers GHG emission reductions in the face of clear evidence of the likely consequences. The government must therefore achieve the emission reductions ordered, though it is free to choose how to do so.

The Urgenda decision is a powerful precedent for Canada. Both the federal  and Ontario governments are already facing similar lawsuits, La Rose v. Her Majesty the Queen (Canada) in Federal Court, and Mathur et. al. v. Her Majesty in Right of Ontario in Ontario Superior Court. Both sets of young plaintiffs correctly allege that our governments’ failure to reduce climate pollution (GHGs) increases the risk of climate catastrophe and therefore violates their rights under sections 7 and 15 of the Canadian Charter of Rights and Freedoms. As in Urgenda, they ask the courts to order their governments to set a science-based GHG reduction target, and to take effective action to meet it. 

Faced with these powerful lawsuits, and at risk of being forced to act, governments may well be tempted to make the Carbon Majors pay instead of taxpayers. After all, that’s what they have done before. More details in Part 3.

Dianne Saxe

Categories
Climate

Obstruction and obfuscation by fossil fuel companies?

In December 2019, Commissioner Roberto Cadiz told COP25 that the three-year Philippines Human Rights Commission National Inquiry on Climate Change will soon release its report. He said the Commissioners have made their decision: the 47 biggest Carbon Majors have violated the human rights of  Philippine citizens through their contributions to climate change, and can be held legally liable for those violations under existing Philippines civil law. Cadiz said it may also be possible to hold the companies criminally accountable “where they have been clearly proved to have engaged in acts of obstruction and willful obfuscation.” 

How strong is the evidence that big fossil fuel companies knowingly concealed the hazards that they knew would result from the normal use of their fossil fuel products through misrepresentation about those products and deliberately discrediting scientific information related to climate change? Read the impressive amicus brief in the San Mateo litigation. It lays out evidence that the fossil fuel companies had actual knowledge of the risks of their products and had taken “proactive steps to conceal their knowledge and discredit climate science” while at the same time taking steps to protect their own assets from the impacts of climate change. 

The brief starts this way:

“At least fifty years ago, Defendants-Appellants (hereinafter, “Defendants”) had information from their own internal research, as well as from the international scientific community, that the unabated extraction, production, promotion, and sale of their fossil fuel products would result in material dangers to the public. Defendants failed to disclose this information or take steps to protect the public. They also acted affirmatively to conceal their knowledge and discredit climate science, running misleading nationwide marketing campaigns and funding junk science to manufacture uncertainty, in direct contradiction to their own research and the actions they themselves took to protect their assets from climate change impacts such as sea level rise.”

Categories
Climate

Climate damage: will fossil fuel producers have to pay? (Part 1 of 4)

This is Part 1 of a four part article being published in the Lawyer’s Daily. Part 2, click here.

The climate crisis is already causing large financial losses, and much more is ahead. Most of the fossil fuels that are driving this crisis have been produced and sold by 103 companies, the Carbon Majors. Can they be made to pay for the resulting damage?

Burning fossil fuels is creating a collision with physics. Humans have never lived in a world much warmer than today. On the current trajectory, we could be beyond the realm of all human experience within the next 30 years. 

The Bank of Canada recognizes climate change as a key vulnerability in the Canadian economy and financial system. The Bank estimates the negative effects this century at “potentially 1.5 to 23 percent of global annual gross domestic product (GDP) per capita”. Others are more pessimistic:

“Large-scale uneven impacts of climate change may destabilize existing institutional arrangements, increase incentives to violently redistribute wealth, or generate other forms of social conflict.” Hsiang, Oliva, Walker 2017

According to the Federation of Canadian Municipalities and the Insurance Bureau of Canada, Canadian governments already need $5.3 billion / year just to adapt to the hotter, weirder weather that past emissions have already locked in.

Who should pay for all this?

There is one obvious answer. We know that burning fossil fuels is the major cause of climate damage. And we know who produced those fossil fuels:

  • 70% of global human-caused climate pollution comes from fossil fuels produced by 103 companies.
  • 35% of that pollution (1 million tonnes CO2e every forty minutes) comes from fossil fuels produced by only 20 of those companies. ExxonMobil itself produced fossil fuels that created 3.09% of global emissions 1965 to 2017.

The Carbon Majors have profited handsomely  from producing these fuels; ExxonMobil alone had gross profit of $56 billion USD ($Can 74 billion) last year. Much of that profit has been earned since they knew the climate consequences of their products. In the 30 years after James Hansen’s dramatic 1988 testimony to the US Congress,  oil production soared and climate pollution doubled.

Yet fossil fuels are legal products, widely used and heavily regulated. The Carbon Majors may produce fossil fuels, but we all use them. As a result, most of us benefit from a historically extraordinary level of wealth, comfort, and quality of life. Fossil-fuelled societies have lengthened human lives, and immensely expanded human population, while reducing slavery.Carbon Majors have been hugely important for the Canadian economy, and provide the economic foundation for many communities and families. 

In these circumstances, will governments and courts make the Carbon Majors pay for soaring climate damages? I predict that a critical factor will be public opinion about whether the Carbon Majors’ enormous profits were morally earned.

Public opinion on this question has begun to change, as many more people have become aware that: 

  1. The Carbon Majors’ huge private profits sit on a foundation of heavy public costs, including public investment, infrastructure and subsidies, plus pollution.
  2. The Carbon Majors’ pollution is threatening us, here, now, not just polar bears and future generations.
  3. We are desperately unprepared for what’s coming.
  4. The longer we delay strong action, the more it will cost us.
  5. Exxon and fossil fuel industry associations have, for decades, conducted an active campaign of disinformation, doubt and delay, to defeat, defer and weaken public regulation of the environmental and climate damage that they cause, in direct contradiction to their own scientific knowledge. Even today, Environmental Defence Canada has shown, fossil fuel industry lobbying is the single biggest barrier to effective climate action in Canada.

People will be more willing to make moral judgments of the Carbon Majors when they lose money, and there are increasing reasons to doubt whether Carbon Majors are good places to invest either equity or debt. The business plans of the Carbon Majors are incompatible with a stable climate and with the Paris Agreement. Fossil fuel divestment has been growing rapidly, more rapidly than any previous divestment campaign. More than 1100 institutional investors, including giant pension plans and entire countries such as Ireland, have pledged to divest from fossil fuels. Lenders such as the world’s largest international public lending institution, the European Investment Bank, are halting fossil fuel loans. Dozens of countries have pledged to reduce fossil fuel subsidies. 

In the stock market, the energy sector halved from 25% of the S&P 500 in 1980 to 12% in 2009; in 2019, it fell below 5%. This fall, Exxon lost its prized place in the top 10 of the S&P 500, for the first time since the index was created. Soon after, Moody’s downgraded Exxon’s outlook to negative, citing large negative cash flow, debt-fueled expansion, low commodity prices, and “rising litigation risk …related to climate change.” Mercer predicts that investing in sustainability will provide much higher returns in coming decades than today’s standard “Growth” portfolio.

For these and other reasons, I expect public opinion to increasingly welcome the idea of making the Carbon Majors pay. And as that appetite grows, lawyers are developing options to offer. Part 2 of this article will explore some of those options.

Dianne Saxe

Thursday, December 12, 2019

Categories
Climate

Why Toronto should sue oil/coal companies for climate damage

Prof. Estair Van Wagner, of Osgoode Hall Law School, wrote an excellent summary, absolutely worth reading. Great to see how she built on some of my work as the Environmental Commissioner of Ontario.