Climate Change Liability


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Provides an overview of legal liability issues and claims based on climate change.

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Climate Change Liability

  1. 1. Climate Change Liability The Evolving Legal Framework October 14, 2008 Munich Re Climate Change and Liability Workshop Princeton, New Jersey
  2. 2. What We Know
  3. 3. <ul><li>Intergovernmental Panel on Climate Change (IPCC) 4th Assessment Report (2007): </li></ul><ul><li>“ Warming of the climate system is unequivoca l ” </li></ul><ul><li>Anthropogenic activities (historic and continuing) are significant contributors to climate change </li></ul><ul><li>Relative contribution of greenhouse gas (GHG) emissions from different regions of the world is shifting rapidly </li></ul>
  4. 4. What We Don’t Know
  5. 5. <ul><li>Contribution of individual, sector, and jurisdictional sources are diverse and difficult to assess </li></ul><ul><li>Impacts are diverse and hard to predict </li></ul><ul><ul><li>Increased incidence and severity of hurricanes, typhoons, thunder and hailstorms </li></ul></ul><ul><ul><li>Potential erosion and flooding of coastal areas from changes in ocean elevation </li></ul></ul><ul><ul><li>Impacts to non-coastal areas from landslides, subsidence, wildfires </li></ul></ul>
  6. 6. Range of Related Legal Liabilities <ul><li>Application of existing laws and regulations at the federal and state levels </li></ul><ul><ul><li>Federal Clean Air Act </li></ul></ul><ul><ul><li>National Environmenta Policy Act and state equivalents </li></ul></ul><ul><li>Development of new regulatory strategies </li></ul><ul><ul><li>Current proposals in Congress for “cap and trade” systems </li></ul></ul><ul><ul><li>California’s AB 32 </li></ul></ul><ul><li>Litigation </li></ul><ul><ul><li>Standing and damages </li></ul></ul>Climate Change Liability In the United States
  7. 7. <ul><li>U.S. failure to respond at the federal policy level </li></ul><ul><ul><li>Reluctance to support international strategies </li></ul></ul><ul><ul><li>Failure to pursue domestic strategies </li></ul></ul><ul><li>Application of existing laws and regulations </li></ul><ul><ul><li>Federal Clean Air Act </li></ul></ul><ul><ul><li>National Environmental Policy Act and state equivalents </li></ul></ul><ul><li>Development of new regulatory strategies </li></ul><ul><ul><li>Recent federal proposals for “cap and trade” </li></ul></ul><ul><ul><li>California’s AB 32 </li></ul></ul>
  8. 8. Regulation of GHG Emissions Under the Federal Clean Air Act
  9. 9. <ul><li>Massachusetts v. U.S. Environmental Protection Agency </li></ul><ul><ul><li>(U.S.Supreme Court - April 2007) </li></ul></ul><ul><ul><li>CO 2 in automobile emissions as an “air pollutant” </li></ul></ul><ul><ul><li>Standing of Massachusetts to sue - imminent jeopardy by rising sea levels that “have already begun to swallow Massachusetts’ coastal lands” </li></ul></ul><ul><li>Massachusetts v. EPA II </li></ul><ul><ul><li>Filed April 2, 2008 </li></ul></ul><ul><ul><li>Seeks order directing EPA to issue endangerment determination and initiate rulemaking process </li></ul></ul>
  10. 10. Federal Environmental Review Cases Federal Environmental Review Cases
  11. 11. <ul><li>Border Power Plant Working Group v. DOE , 260 F. Supp. 997 (S.D. Cal. 2003) </li></ul><ul><li>Mayo Foundation v. Surface Transportation Board , No. 06-031 (8 th Cir. 2006) </li></ul><ul><ul><li>[ Mid-States Coalition for Progress v. Surface Transportation Board , 345 F.3d 520 (8 th Cir. 2003)] </li></ul></ul><ul><li>Friends of the Earth v. Mosbacher </li></ul><ul><ul><li>Mosbacher I ( Friends of the Earth v. Watson , No. 02-4106C, 2005 WL 2035596 (N.D. Cal. Aug. 23, 2005)) </li></ul></ul><ul><ul><li>Mosbacher II ( Friends of Earth, Inc. v. Mosbacher , No. 02-04106C, 2007 WL 962955 (N.D. Cal. Apr. 30, 2007)) </li></ul></ul>National Environmental Policy Act (NEPA)
  12. 12. California Environmental Review Cases California Environmental Review Cases
  13. 13. California Environmental Quality Act (CEQA) <ul><li>Strategy and recent settlements </li></ul><ul><li>County of San Bernardino (land use) </li></ul><ul><li>ConocoPhillips </li></ul><ul><ul><li>Conduct energy efficiency audit at refinery </li></ul></ul><ul><ul><li>Conduct GHG audit of all California facilities </li></ul></ul><ul><ul><li>Pay $7 million to carbon offset fund </li></ul></ul><ul><ul><li>Pay additional $3 million for other mitigation measures </li></ul></ul>
  14. 14. Liability under Common Law Litigation Theories Liability under Common Law Litigation Theories
  15. 15. <ul><li>Global warming as a “public nuisance” </li></ul><ul><li>Connecticut v. American Electric Power - GHG emissions from electric power generation facilities </li></ul><ul><ul><li>Seeking injunction to abate GHG emissions with cap and subsequent percentage reductions </li></ul></ul><ul><ul><li>Dismissed - lack of subject matter jurisdiction (political question) </li></ul></ul><ul><li>California v. General Motors - GHG emissions from motor vehicles </li></ul><ul><ul><li>Federal and state law claims </li></ul></ul><ul><ul><li>Dismissed on September 17, 2007 - failure to state valid claims </li></ul></ul>
  16. 16. Katrina Litigation Hurricane-Related Litigation
  17. 17. <ul><ul><li>Comer v. Murphy Oil USA </li></ul></ul><ul><ul><ul><li>Allegation: GHG conduct of defendant oil and coal companies, chemical manufacturers, and insurance companies result in GHG emissions that cause global warming and increase frequency and intensity of hurricanes </li></ul></ul></ul><ul><ul><ul><li>Claims for unjust enrichment, civil conspiracy, nuisance and trespass, negligence and fraudulent concealment </li></ul></ul></ul><ul><ul><ul><li>Alleged damages: property loss, loss of property use and enjoyment, loss of business and income, cleanup costs, emotional distress </li></ul></ul></ul><ul><ul><ul><li>August 30, 2007 - dismissed for lack of subject matter jurisdiction (non-justiciable political question - notice of appeal on September 17, 2007) </li></ul></ul></ul>
  18. 18. Proposed Federal Legislation Recent Federal Proposals
  19. 19. Proposed Federal Legislation <ul><li>At least ten legislative proposals focused on climate change introduced in Congress during 2007 </li></ul>
  20. 20. <ul><li>Lieberman-Warner-Boxer </li></ul><ul><li>“ Climate Stewardship and Innovation Act” (S.280) introduced on October 16, 2007 </li></ul><ul><li>Senate Environment and Public Works Committee reported bill to full Senate on December 5, 2007, by a vote of 11-8 </li></ul><ul><li>First bill mandating economy-wide reductions in greenhouse-gas emissions reported out of committee in either house </li></ul><ul><li>Bipartisan sponsorship: Lieberman (I-CT), Warner (R-VA), Casey (D-PA), Coleman (R-MN), Collins (R-ME), Dole (R-NC), Harkin (D-IA), Klobushar (D-MN) </li></ul><ul><li>Tabled – June 2008 </li></ul>
  21. 21. State Legislation State and Regional Proposals
  22. 22. <ul><li>AB 32 – California’s Global Warming Solutions Act of 2006 </li></ul><ul><li>First enforceable state-wide program to cap all GHG emission from major industries </li></ul><ul><li>Regulatory development underway now </li></ul><ul><ul><li>Determination off 1990 baseline and 2020 emissions limit </li></ul></ul><ul><ul><li>January 1, 2009 - CARB to approve scoping plan for achieving 2020 emissions </li></ul></ul><ul><ul><li>January 1, 2010 - Implementation of early action reduction measures </li></ul></ul><ul><ul><li>January 1, 2011 - Adoption of limits and reduction measures </li></ul></ul><ul><ul><li>January 1, 2012 - Regulations go into effect </li></ul></ul><ul><li>Other state and regional activities </li></ul>
  23. 23. Proposals for Climate Disclosure Rules Proposals for Climate Change Disclosure Rules
  24. 24. <ul><li>Currently voluntary program to disclose climate-related risk information </li></ul><ul><li>September 18, 2007 petition to SEC by state pension plans and institutional investors </li></ul><ul><ul><li>Asks SEC to assess and disclose “material” financial risks from climate change </li></ul></ul><ul><ul><li>Material risks include financial impacts from emerging carbon-reducing regulations, extreme weather and other physical events, demand for low-carbon technologies and products </li></ul></ul><ul><li>Related developments in Congress (hearings and proposed legislation) </li></ul>
  25. 25. Conclusion CONCLUSIONS
  26. 26. <ul><li>Kevin T. Haroff </li></ul><ul><li>Shook Hardy & Bacon LLP </li></ul><ul><li>333 Bush Street, Suite 600 </li></ul><ul><li>San Francisco CA 90104-2828 </li></ul><ul><li>SF Office (415) 544-1961 </li></ul><ul><li>SF Fax (415) 391-0281 </li></ul><ul><li>Mobile (415) 336-6494 </li></ul><ul><li>Email – </li></ul>