Boulder Attorney Equates Potential Damages Pay Out To An “Internal Carbon Tax”
An attorney supporting municipalities in the Boulder, Colo., climate lawsuit compared damages plaintiffs are seeking from defendants ExxonMobil and Suncor to an “internal carbon tax” at a panel event hosted by the Federalist Society in New York on Tuesday.
David Bookbinder, chief counsel at the Niskanen Center and co-counsel for the Colorado suit, also added that the goal of the litigation is not about changing federal policy, but rather putting the onus on companies as opposed to taxpayers to pay for increased civil service costs associated with climate change impacts.
“You’re a local government that has basic government services that you are supposed to be providing. And all of the sudden climate change comes along and the costs of those services goes up, and, in fact, now you may have to provide new services as a result,” Bookbinder said. “So these are fundamental local basic government services that all of the sudden people have to spend more and spend it on a larger number of things. So the question is who’s going to pay for that?”
In April, the City of Boulder, Boulder County, and San Miguel County filed suit against ExxonMobil and Suncor for damages relating to climate change. At the time, Bookbinder told Western Wire that the companies were specifically chosen due to their development of oil sands.
“They were chosen because they are number one in tar sands. And one of the issues that we find most troubling is that when members of the oil industry have finally at least publicly accepted that climate change is real and that it’s caused by their products, their response is to say, ‘and in the future we intend to sell even more of these products,’ making the problem worse, ‘and we’re going to sell even more carbon intensive products,’ making the problem far worse,” he said.
Bookbinder provided the panel several Colorado-specific examples of increased strain experienced by the municipalities that have chosen to sue.
“Climate change is leading to increased cost of fixing roads,” Bookbinder said. “Schools in Colorado have never, ever needed air conditioning, but now they need air conditioning. … So, these are fundamental local basic government services that all of the sudden people have to spend more and spend it on a larger number of things.”
According to Bookbinder, the lawsuit is not asking for a halt on fossil fuel production, nor attempting to install new policy. But if companies are forced to pay large-sum damages, that could potentially achieve the same result as carbon-tax plans being floated around Washington, D.C.
“None of these cases are asking for any kind of injunctive relief… the request is simply ‘pay for the damage that your product causes,’” Bookbinder said.
“It is not trying to set policy, it’s merely trying to say ‘the appropriate mechanism for paying for this cost is by attributing it to the product that caused it,’” added Bookbinder.
Instead, according to Bookbinder, the lawsuits will effectively impose “internal carbon taxes” on the companies.
“That’s exactly what this is; it’s an internal carbon tax. Paid for them who caused and … will raise the price of your product the amount of these damage awards and will therefore spread the cost for everyone. When we talk about carbon tax, no one screams ‘You’re making the consumers pay for it.’ Of course they’re making the consumers pay for it. But here all of the sudden, here when we’re talking, when we’re dealing with damage cases, ‘oh you’re making the consumers pay for these things.’ It’s the same thing. One is simply a tax imposed by the government, one is a tax imposed by finding liability,” he continued.
Eventually, the product will cost more which may impact customers’ decisions on usage.
“You the consumer will then have to decide, ‘do I want to pay the increased cost for this product, or do I want to find something else, or do I not want to use this product at all? Everyone has a choice,” said Bookbinder. “But if you decide to use the product, built into what you are willing to pay for the product, is the amount of money that it’s going to cost to pay for the injuries caused by that product. You do it every day. You buy a thousand products over the course of a year where built into the cost of that product is the cost of insurance, is the cost of liability, etc. It’s the same thing.”
Bookbinder has long been an advocate for instituting a carbon tax, and Niskanen has made the policy one of its top climate priorities. The center’s climate and energy page lists a policy platform that aims to, “initiate legal action to compel responses to climate risks; defend property rights from fossil-fuel infrastructure and eminent-domain claims; and, above all, promote carbon taxation as the best federal response to climate risk, in that it maximizes individuals’ and companies’ ability to use trial and error to efficiently reduce carbon emissions.”
A key component to assigning blame and legal liability will be to ascribe specific greenhouse gas emissions to each company. But Bookbinder told the panel he is confident that can be done.
“Whether or not you could take those temperature and translate them into local areas, yes, we think we can do that. We can link, and we have the scientific expertise, to say that these temperature trends in this area and these storm events in this area and decreased freeze/thaw cycles, are directly caused by the increase in global temperatures,” Bookbinder said. “And we seek to hold the defendants responsible only for their share of the damage caused by that.”
The Niskanen Center is a self-described libertarian-leaning think tank based in Washington, D.C. The center is joining with EarthRighs International, another Washington-based think tank, and the Denver-based Hannon Law Firm to represent the municipal plaintiffs in the case.
Of late, plaintiffs and defendants have been trading legal motions to ultimately determine in which venue the case will be heard—state or federal courts. Similar cases in New York City and San Francisco were dismissed after being remanded to federal court, where precedent tends to be less favorable.