Responsibility for global warming is hard to pinpoint. After California sued the automobile industry for car emissions the fundamental question remained: Who should pay for the impacts of global warming?
 | California lawsuit against carmakersGM-produced Hummers lined up for sale in California. GM was one of six carmakers sued by the State of California over emissions from their cars (Photo: Reuters) |
In 1989, the Exxon Valdez oil tanker struck a reef and spilled more than 450,000 tons (11 million gallons) of crude oil into the Gulf of Alaska. What followed was an unprecedented ecological disaster and a financial fiasco for the oil giant Exxon Mobil (then known as Exxon), which was forced to pay billions in settlements and clean-up costs after courts held it responsible.
Nearly two decades later, the State of California tried to sue some of the world's biggest car manufacturers for the damage that their cars' emissions are said to be causing to the state's economy, environment, and public health.
When the lawsuit was filed in 2006, California State Attorney General Bill Lockyer said that emissions from cars made by six companies - General Motors, Ford, Toyota, Chrysler, Nissan, and Honda - accounted for 30 percent of all carbon dioxide emissions in the state. The damages sought by the state would likely reach "hundreds of millions" of dollars, he added.
In September 2007, a U.S. federal judge tossed out the lawsuit. According to judge Martin Jenkins, the issue of global warming should be decided in the political rather than the legal arena.
"The Court finds that injecting itself into the global warming thicket at this juncture would require an initial policy determination of the type reserved for the political branches of government," Jenkins wrote in approving the automakers' motion to dismiss the case.
A global trend?
While the California lawsuit failed, the ruling does not mean the end for climate change-related litigation. And when carmakers in the U.S. went to the government for bailout funds after the auto market collapsed in 2008, they were forced to promise to make their products cleaner in return for the cash.
The U.S. government's environmental agency has already been stung by climate change litigation. In April 2007, the U.S. Supreme Court ruled in favor of eleven states and several NGOs that sued the Environmental Protection Agency (EPA) for not effectively regulating carbon dioxide (CO2) emissions.
Until then, the EPA had refused to regulate CO2 emissions, saying the Clean Air Act did not apply to greenhouse gases. The Supreme Court ruled 5-4, however, that CO2 fits within the act's broad definition of an air pollutant, and that the EPA is obligated to regulate it.
One of Barack Obama's first acts as President was to follow through on that ruling and instruct the EPA to class CO2 emissions as a threat to public health, thereby triggering an obligation for the EPA to regulate heavy CO2 emitters.
Courts in more than a dozen countries around the world have considered the issue of climate change liability, including in Nigeria, Australia, New Zealand, Canada and Germany. For example, Bonn-based NGO Germanwatch issued a legal complaint against Volkswagen for failing to develop more fuel-efficient cars, and for lobbying "aggressively against climate protection frameworks."
Meanwhile climate cases in the U.S. could eventually be comparable to the big tobacco and asbestos liability lawsuits of decades past.
"In the tobacco cases, there was a pooling of interest in terms of the health system institutions," says Roda Verheyen, co-director of the Climate Justice Programme. "They pooled the interest of the damaged or victims of the tobacco smoke. This is very much what California state has been doing: they're pooling the interest of their citizens, who have an interest in their water structure and the recreational use of their coastal lands etc."
Insurance industry affected?
The question now is how far legal battles over who is liable for the effects of climate change will go.
"I would not want to be sensational about that," says Evan Mills, an author of the third and fourth UN Intergovernmental Panel on Climate Change (IPCC) assessments and staff scientist at Lawrence Berkeley National Laboratory in California. "I don't know what pattern it will take, but I think it would be prudent to expect a rise in claims of this sort."
Like Exxon Mobil's clean-up expenses in Alaska, most manufacturers would probably pass costs on to their insurers. But even if big companies can win court battles about climate change, insurance companies will have to pay claims. "This is a reality for the insurance business, because those legal defense costs are insured," says Mills.
According to Mills, insurance companies should address the issue of liability. "I think insurers would benefit by viewing the ball as being in their court in the sense that there are opportunities," adds Mills.
Of the legal risks of climate change, Mills sees a chance for insurers "to be proactive and avoid liability claims, and do some more business in the process by helping their customers manage these risks in order to stay out of the courtroom."
editor: Valdis Wish
last updated: August 31, 2009
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