Our planet is getting warmer. This poses a threat to all of us. Politicians are failing to turn the tide. So do corporations and consumers. Here’s a glimmer of hope: Lawyers in the U.S. are gearing up to file suit against industries creating greenhouse gases.
Jurriaan Kamp | June 2006 issue
Back in 1956, a New York Times headline read: “Warmer Climate on Earth May Be Due to More Carbon Dioxide in the Air.” Fifty years later, nearly every scientist in the world subscribes to the view that the Earth’s climate is changing at an accelerated rate. The culprit? The build-up of the greenhouse gas carbon dioxide (CO2) in the atmosphere resulting from increased burning of fossil fuels. It took half a century to convince the international community that this situation was serious—not exactly a testimony to human inquisitiveness—but suddenly cries of concern are arising everywhere.
Climate change topped the agenda of the business leaders at the World Economic Forum in Davos, Switzerland earlier this year. A senior advisor to British Prime Minister Tony Blair calls the threat of climate change “more serious than the threat of terrorism.” Al Gore is attracting more attention as the prophet of doom regarding our warming planet than he ever did as U.S. vice-president. Even the mainstream Time magazine is concerned, as evidenced by a recent cover line: “Be Worried. Be Very Worried.” Insurance companies are getting agitated. Seawater levels are rising and will increase over three feet by the end of this century, according to the scientific consensus of the United Nation’s Intergovernmental Panel on Climate Change. Half of that rise is directly attributable to human behaviour. Polar bears are drowning. Malaria is spreading. There are more heat waves and droughts. Hurricanes are more common and violent. Katrina destroyed New Orleans and insurers have never had so many claims to process following a natural disaster.
Meanwhile, climatologists agree it’s not too late to take a radical approach to this threat—to stop climate change and prevent even more serious consequences. The solutions are known and can be directly implemented: ambitious energy-conservation measures and accelerated large-scale investments in clean, sustainable energy. “The only thing missing is the political will,” Al Gore wrote in a recent essay for Vanity Fair.
That’s a scarce commodity—particularly in the United States of George W. Bush, which is home to only five percent of the world’s population but accounts for 25 percent of CO2 emissions. The Bush administration continues to refuse to sign the Kyoto accords that limit emissions. That may explain why the tone of the scientific reports on climate change is becoming gloomier and more ominous. The human race appears to be heading for an inevitable crisis. Our generation will be portrayed in our grandchildren’s history books as the generation that could have done something, but didn’t.
Or will we?
While politicians and industry continue to do almost nothing to address the problem, there is hope from a not-entirely-surprising source: the legal profession. The same lawyers that brought tobacco manufacturers to their knees a decade ago with billion-dollar claims for damages—thus making an important contribution to curtailing smoking and improving public health—see new possibilities for action on climate change. Back in the 1830s, Alexis de Tocqueville wrote about the United States that there is “scarcely any political question… that is not resolved sooner or later into a judicial question.” This litigious tendency, associated with exorbitant settlements in court cases, often appears excessive and damaging to American society. Yet this same culture offers a means to bring about a policy shift that appears unattainable through the usual political channels. It may be a testament to political paralysis and business myopia, but it looks like smart profit-seeking lawyers may end up saving the planet. They’re warming up on the sidelines now to curb climate change.
In 1994, Steve Susman, founder and partner of the law firm Susman Godfrey in Houston, Texas, got a phone call from the attorney general of Massachusetts . Susman, who graduated magna cum laude from Yale University and gained name and fame as a trial lawyer flew to Boston where the attorney general asked him to assist in a case against the tobacco industry. Massachusetts wanted to file suit against cigarette companies, claiming damages for the rising health-care costs resulting from an increase in the number of cancer cases. “I said ‘that’s absurd, ridiculous,’” remembers Susman. He rejected the offer, missing the opportunity to take a leading role in the series of lawsuits—the Massachusetts case was one of many—that would change the country’s habits around smoking. Twelve years later: “I was like the drummer who left The Beatles. A really stupid decision. And that won’t happen again.”
Last October, a few weeks after Hurricane Katrina ripped through New Orleans, Susman participated in a conference on climate change. The conference was an initiative of, among others, his wife, Ellen Susman, Gustave Speth, the dean of the Yale School of Forestry %amp% Environmental Studies, with which Susman maintains a close relationship. The meeting was less about the science of climate change as why no concrete measures have been taken in light of overwhelming proof of the human role in global warming.
In discussions with politicians and business people during the conference, it quickly became clear to Susman that radical solutions could not be expected to come from governments or corporations. “They said: ‘we’re going to be good, we’re making efforts on our own to clean up the mess’”. But it didn’t sound very convincing,” according to Susman. He heard the usual arguments that it’s too expensive for the business community and not good for the economy if energy savings and the transition to clean and sustainable energy sources are implemented too quickly. The Bush administration claims that the required emissions standards laid down in the Kyoto agreement would cost the United States five million jobs. Evidence to the contrary is mounting, however. Increasing numbers of companies are realizing substantial savings through energy conservation. Between 1999 and 2002, for example, British Petroleum invested $20 million U.S. to lower its CO2 emissions and that investment yielded a whopping $650 million in cost savings. Studies show that energy savings and investments in wind and solar energy generate lots of new jobs. And history illustrates that the employment effects of innovation are more likely to be better than anticipated—simply because innovation nearly always has unexpected interesting side effects.
But even the prospect of substantial economic benefits is not enough to get businesses on board in reducing emissions. Indeed, the automobile industry has taken California to court because the state is requiring substantially lower CO2 emissions for new car from 2009.
At the Yale climate conference Steve Susman noticed that businesspeople are deathly afraid of potential lawsuits that would hold them responsible for climate change. He also noticed the similarities with the tobacco-cases a decade ago. “In the early 1990s,” Susman notes, “90 percent of the people were still convinced that smoking didn’t cause cancer. That public opinion didn’t change thanks to the goodness of the hearts of the tobacco manufacturers. The government also failed to act. Public opinion turned around because a couple of lawyers got the crazy idea of taking the tobacco industry to court over the damage those companies caused to government health programs.” He falls silent for a moment, then continues: “I just got back from Saõ Paulo. Even there, virtually no one is smoking anymore. In Brazil!”
Inspired by the Yale conference, by the concern of his wife and the desire to make a meaningful contribution to the future of his grandchildren, Susman made a decision during the flight home. He would use his talents and those of his firm, which also has offices in Seattle and soon in New York, to wage a legal battle against the industries responsible for the majority of CO2 emissions. It is a battle that, experts say, could make the billions won from tobacco manufacturers pale in comparison. And, according to Steve Susman, strict measures to curb climate change could be in place in 10 years, something even the most idealistic environmentalists can now only dream of.
Susman is not alone. A number of cases regarding climate change have been initiated in recent years. A coalition of 12 American states, three cities and a number of environmental groups led by Massachusetts, launched proceedings against the U.S. Environmental Protection Agency (EPA). The coalition is demanding that the EPA establish guidelines towards reducing CO2 emissions. The court eventually considered that the plaintiffs had no standing in U.S. federal courts, but the coalition recently appealed to the Supreme Court. There is also a case pending brought by Greenpeace, Friends of the Earth and a number of cities including Oakland, California, against the U.S. Export-Import Bank which is said to finance the extraction of fossil fuels without considering the environmental impact. In addition, environmental groups have instituted legal proceedings against five electricity companies demanding that the utilities cut their CO2 emissions by three percent per year.
These are all “test cases” involving—in Susman’s view—damage claims that are too small to have a serious impact. Susman is convinced that the industrial polluters—comprising energy utilities, carmakers and oil companies—will only make changes if substantial damage claims are awarded. Which raises the question of who would be a suitable plaintiff in such a case. “A single individual claiming $U.S. 10 million in damages won’t stop a polluting company,” says Susman, “and if thousands of individuals initiate their own proceedings, it will block the whole legal system.” A combined case, a so-called “class action” won’t work either because all the plaintiffs in such a suit have to have suffered the same damages. And that’s not the case in a greenhouse-gas emission lawsuit: one might claim damages because the rising seawater is threatening their home, another will see lower crop yields due to drought while a third suffers health problems due to a heat wave, and so forth.
Susman says the aftermath of hurricane Katrina offers a unique opportunity for an initial large-scale “greenhouse lawsuit”. The insurance companies suffered major damages. They were forced to pay nearly $U.S. 40 billion in insured claims, which Susman believes makes them an ideal plaintiff. There is one small complicating factor: the oil companies, car makers and utilities that could be sued by insurance companies are clients of those same insurance companies. Moreover the insurers are regular investors in th companies they would be sueing. This is why such a lawsuit differs markedly from those against the tobacco industry, which were filed by the government.
But Susman remains optimistic that insurers will ultimately agree to become plaintiffs in “greenhouse lawsuits”. The fact that the insurers have been sounding the alarm about climate change for 15 years would appear to support his optimism. As far back as the early 1990s the insurance companies emerged as unlikely allies of environmental groups in drawing attention to the dangers of climate change. The insurers don’t need scientific proof to realize that they’ve been paying out significantly more for damage claims as a result of natural disasters. A simple example: according to the Insurance Information Institute, seven of the ten most costly hurricanes ever have occurred in the past two years.
As early as 1990 a top executive with the major Swiss reinsurer Swiss Re warned that continuing climate change would “stretch the insurance industry to its limits.” A recent report from the insurance institute Ceres indicates that insurance companies’ profitability is under threat because since 1971 the pay-outs for catastrophes have risen ten times faster than premiums. And there are models in circulation that predict that another hurricane like Katrina could cause insured damages in the range of $ 200 billion U.S. This degree of damage is impossible to cover with short-term premium hikes.
As Tim Flannery describes in his book The Weathermakers, the problem is that the destructive force of a hurricane rises exponentially: when wind speeds during a storm rise from 40 or 50 knots to 50 or 60 knots, the potential damage to buildings rises by around 650 percent. In other words: it is not such a reckless prediction that insurers will be forced to go to the courts in the foreseeable future as a matter of self-preservation. Swiss Re is already considering a first step: refusing personal liability coverage for company directors who, according to the reinsurer, take insufficient steps to scale back their business’ CO2 emissions.
A court will only determine that a plaintiff has standing to bring a suit if it can be demonstrated that damages were suffered that can be corrected through court-imposed measures. This is the next rather daunting hurdle that Susman and his legal colleagues will have to jump in building a successful greenhouse lawsuit. One lower court judge in the U.S. has already refused to hear such a case on the grounds that it involves a “political matter” that falls outside the court’s jurisdiction. A judge seeks to apply rules and there aren’t any enforceable rules regarding emissions of CO2 and climate change. On the other hand, the most interesting and groundbreaking legal cases often play out on the fringes of the government’s regulatory structure. Lawsuits help formulate new rules that are then translated into legislation. Convincing a judge to declare a case admissible, and thus take it on, is a crucial challenge for lawyers. It is an obstacle they successfully tackled in the lawsuits against the tobacco industry, for example, as well as in cases of health problems stemming from exposure to asbestos.
As soon as a judge takes on a greenhouse case, lawyers will then have to prove that the damage suffered—such as the losses linked to damaged or destroyed buildings in New Orleans—were a directly demonstrable result of climate change. And then they must prove that the activities of certain companies are partly to blame for the climate change. In other words: that these damages would not have occurred or would have been less serious if it weren’t for global warming, and that the particular companies in question are partly responsible for rising temperatures. That’s clearly a challenge but the lawyers are getting some help here from new research by climatologists. The prevailing consensus among scientists on the U.N.’s Intergovernmental Panel on Climate Change is that at least half of the continuing rise in global temperatures is directly linked to human activities. That consensus offers a strong foundation for legal cases.
In addition, many other researchers are independently concluding that the intensity of hurricanes and their frequency are related to warmer ocean temperatures and that if seawater continues to get warmer, the force of storms will in all likelihood increase. This point is illustrated by an article published by MIT meteorologist Kerry Emanuel in the authoritative scientific journal Nature a few weeks before Katrina in which he revealed that the force and frequency of hurricanes in the last century are correlated with warming of the tropical oceans Indeed, he shows that the destructiveness of tropical storms and hurricanes has more than has doubled since the 1970s. Based on these observations, Emanuel and, for example physicist Myles Allen from Oxford University too, speak of “the loading of the weather dice.” The warmer the seawater, the morepowerful the hurricane. A tropical storm only develops when the ocean temperature is at least 78 degrees Fahrenheit. Warm seawater evaporates and that water vapour fuels the hurricane. In the case of Katrina, the water in the Gulf of Mexico was exceptionally warm: 87 degrees Fahrenheit!
When the chances of a particular event increase, it becomes easier to declare a party involved liable for damages. This is what happened, for example, in the lawsuits against the tobacco industry. It wasn’t possible to link the disease of one random individual to smoking because other factors play a role. But solid scientific evidence that smoking increases the chance of developing lung cancer was enough to establish liability. The same will have to happen in a case involving climate change. With one key difference: the evidence in the tobacco cases came partly from statistical comparisons of the health of people who did and didn’t smoke. That’s not possible in the case of climate change, because there is no comparable unaffected group. You can’t compare the residents of New Orleans with another statistical group. In a climate lawsuit, computer simulations will have to take the place of statistical proof. Such simulations will be a new type of evidence judges will have to accept.
Imagine that the link between CO2 emissions, warmer seawater, stronger hurricanes and damage in New Orleans can be made. Lawyers will then face the next challenge: who is responsible for CO2 emissions? Naturally it is not only American oil companies, automobile manufacturers and utility companies. Chinese coal producers and Indian energy companies also share the blame. As do European car makers.
According to prevailing legal practice involving environmental pollution, a company can be considered liable for (a portion of) damages if a reasonable case can be made that the company contributed to the pollution, even if it didn’t necessarily cause the lion’s share of those damages. As long as it is established that your polluting waste water ended up in the river, the plaintiff doesn’t have to prove that a particular gallon of that river water (containing no trace of your waste water) created particular damages. The burden of proof is on the defendant, who must prove that their waste water didn’t pollute the river nor lead to other damage.
Steve Susman expects that judges in climate lawsuits will also shift the burden of proof , meaning that an accused American energy producer cannot defend itself by suggesting that the warmer seawater that caused Katrina to be so devastating was due to CO2 emissions from a Chinese power station. He points out that a discussion of percentages will arise. One-third of the global CO2 emissions comes from energy companies and over 20 percent from cars. Which portion of these emissions was produced by American power stations and which from the cars made by American car makers? Ultimately, you end up with a percentage of the total damages that insurance companies suffered as a result of Katrina, which could be recovered from American oil, car, and energy companies.
The legal challenge is huge. “A lot of research still needs to be done,” Susman admits. He is working on putting together an impressive coalition of law professors, scientists and lawyers. “It has to happen here in the U.S. Our system of damages compensation is unique in the world. It can only be started here. I come across a lot of enthusiasm. This case is appealing to lawyers.”
And that may well be the most important reason why the outcome of this initiative—despite all the obstacles that must still be overcome—is not as uncertain as it appears. There is a significant amount of scientific proof. Imagine that the greatest legal minds unite to draw up a powerful legal strategy. How will their joint talent affect the judges and juries? And what leading lawyer wouldn’t want to join in given the prospect of high rewards (a percentage of the billion-dollar claims), professional respect and a meaningful contribution to the future of the planet?
Naturally the accused companies will be represented by their own legal top talents, but their case is losing ground every day on account of new evidence from scientific researchers. Susman considers: “If we get this a Katrina damage case against major multinational greenhouse emitters in a New Orleans courtroom, can you imagine the reaction of a jury largely made up of African Americans who lost everything due to Katrina? That’s a pretty scary thought. We have to develop sound legal arguments that will get us there and keep us there.”
It seems only a matter of time before lawyers clear the way for effective answers to the challenges that climate change poses – an approach that now still feels so far away. “This will be a serious case,” Susman promises. “We’re not doing it for fun. It’s not about getting our name in the paper.” He’s impatient to get started: “I expect we’ll start proceedings before the year is out.”
With special thanks to Devika de Puy Kamp who prepared the research for this article.