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Responsibility for global warming is hard to pinpoint. Now the State of California is suing the automobile industry for emissions from its cars. The fundamental question is: Who should pay for the impacts of global warming?
 | California lawsuit against carmakersGM-produced Hummers lined up for sale at a California dealership. GM is one of six carmakers facing a lawsuit from 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 for the damage that the spill caused.
Nearly two decades later, the State of California has tried to sue some of the world's biggest car manufacturers for the damages 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.
 | Picture Gallery (click on the image to start)Rapidly melting Arctic ice is one of the most visible impacts of global warming (Photo: Reuters) |
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 litigation. If the political orientation in Washington changes, which could well be the case after this year's presidential elections, carmakers could face a new row of lawsuits.
The U.S. government's environmental agency already experienced the power of climate jurisdiction. 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.
Verheyen says that courts in more than a dozen countries around the world are now considering the issue of climate change liability. She cites recent court cases in Nigeria, Australia, New Zealand, Canada and Germany. Last month, 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."
While Vereheyen says that lawsuits in Germany might never resemble the big-settlement lawsuits in the United States, climate cases in the U.S. could eventually become 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 Verheyen. "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 is now 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
publishing date: June 20, 2007
last updated: February 27, 2008
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