Climate Change Litigation Update

18 June 2007

By Kellie Tranter

On matters to do with climate change our governments seem to have forsaken objective inquiry, blinkered any capacity for sensible foresight and long ago abandoned intelligent planning. They are intoxicated by the short term free for all of modern economic rationalism, approving environmentally disasterous projects one after another on bases such as economic benefit to the state or country or promises of job creation. When challenged they lapse into a mode of thinking that is reflected in Planning Minister Frank Sartor's comments about his approval of Centennial Coal's massive open cut Anvil Hill coal mine "No....the...it's thermal coal. When it goes to its users, to the power stations it will go to in Australia or overseas, you're talking about 12 million tonnes of CO2, in that order. Half of what the Greens said. However, if Anvil Hill was stopped and we said no to it, the same amount of greenhouse gas would still be pumped out. There are no environmental benefits. You're asking, give New South Wales a political whack, and economic whack, in other words --punish New South Wales economically by saying "no" when there's no genuine environmental benefit in global warming."

A coherent and convincing argument? What more is he saying than, "If we don't do it someone else will, and we want the money."?

Notwithstanding our Government's new found concern about coal-fired power generation and global warming the powers that be are intent on ramping up our coal production. In December 2006 the Australian Bureau of Agricultural and Resource Economics released its report 'Australian Energy National and State Projections to 2029-2030' which projects, amongst other things that "Over the medium term, Australia's total coal exports will grow at the average rate of 4.4 per cent a year, reaching 300 million tonnes by 2010-2011. Beyond the medium term (between 2011-2012 and 2029-2030), coal exports are projected to increase by a further 50 per cent to 438 million tonnes in 2029-2030."

The report is worth reading because it seems to lack the "spin" that typically debases many modern government reports: it actually seems to be a genuine attempt to make informed, objective and accurate predictions about energy production and use. It is alarming because all it seems to predict are inexorable increases in energy production and consumption. It is also interesting that there was never any question in the mind of the report's authors that the anticipated output of Anvil Hill and other proposed mines should be taken into account in their projections notwithstanding community protests, active litigation and the lack of formal approvals at the time they were writing: perhaps it's not so difficult to make accurate predictions about the inevitable!

Each time our fearless leaders (at all levels) are questioned about their plans to tackle global warming or their approval of questionable developments their responses are always conditioned by concern about "the economy". Perhaps they should refer to the December 2006 CSIRO publication 'The Heat Is On --The Future of Energy In Australia' where all of the scenarios modelled predicted that both the Australian and world economies would continue to experience strong economic growth while carrying out greenhouse gas mitigation.

On the other hand, our governments are clearly on notice of what will happen if they fail to act. In its recent "Fourth Assessment Report," the IPCC estimates that by 2100 average global temperatures will have risen between 1.1 degrees and 6.4 degrees Celsius (2.0 degrees to 12 degrees Fahrenheit) if humans continue on their present course, with an associated sea level rise between 18 cm and 59 cm (7.0 - 23 inches) when compared to 1990. The panel predicts coastal erosion and flooding, water shortages, an increase in disease and a decrease in biodiversity on a global scale.

Even our Government's own publications outline in detail the catastrophic consequences we can expect if global temperatures of this nature are reached: http://www.greenhouse.gov.au/impacts/publications/risk-management.html

http://www.greenhouse.gov.au/impacts/publications/risk-scenarios.html

http://www.greenhouse.gov.au/science/guide/index.html,

but very little seems to happen. Enquiries, reports, recommendations, promises....just more hot air.

Absent political will and leadership, and positive action such as immediate mandatory requirements that companies and governments reduce greenhouse gas emissions, people are seeking their own solutions to official inaction. All over the world public interest advocacy groups and individuals, and even governments themselves, are looking at legal mechanisms to compel corporations and governments to address global warming issues. In Australia we look at the American experience as a predictive indicator of local litigation trends. Tobacco and asbestos litigation are probably the best known American exports on that front, but a new genre of litigation --environmental litigation --is about to join them.

http://www.susmangodfrey.com/Articles/ODE-Magazine-SDS_ CourthouseEffect.pdf

A significant proportion of climate change litigation cases are likely to be brought against countries such as Australia and the US, respectively the first and second highest per capita greenhouse emitting nations in the world and both amongst the few developed nations that have refused to sign or ratify the Kyoto Protocol.

Governments are already involved on both sides of climate change litigation. The State of California began litigation against the world's big car manufacturers about costs it will face because of climate change, such as the cost of building massive new water reservoirs because the State's water supply is shrinking. The State claims that the car manufacturers are causing a public nuisance by selling cars that emit greenhouse gases which contribute to global warming , which in turn impacts directly on the State of California. The car companies argue that they're simply responding to market demand; the State of California says in reply that the car companies don't respond to the market, they create it through advertising and lobbying.

http://ag.ca.gov/newsalerts/release.php?id=1338

Other examples include the Canadian Government being sued for abandoning Kyoto obligations http://www.foecanada.org/index.php?option=content&task=view&id=278& Itemid=113;

Massachusetts and NRDC against US Department of Energy for failed energy standards http://www.icta.org/doc/SupCtDecision%20Mass.%20v.%20EPA%2004-02-07 .pdf;

US States and NGOs bringing successful suit to force EPA to regulate emissions http://www.icta.org/template/index.cfm;

New Zealand High Court ruling that climate change needs to be considered http://www.scoop.co.nz/stories/PA0610/S00224.htm;

Inuit filing a petition with Inter-American Commission on Human Rights http://news.bbc.co.uk/2/hi/science/nature/6408441.stm;

American Electric Power Coal public nuisance http://www.usatoday.com/weather/resources/climate/2004-07-21-greenhosue- suit_x.htm;

German Government sued over climate change http://www.climatelaw.org/media/german.suit/briefing.pdf;

and US Export Credit Agencies sued for subsidising global warming http://www.climatelawsuit.org/index.htm.

Individual company directors have also explicitly been put on notice.

On 30 July 2003, the Australian Climate Justice Program was launched by the Climate Action Network Australia (CANA) to explore possible legal avenues for making climate change perpetrators accountable for the damage they cause. CANA is an alliance of more than 30 regional, state and national environmental, health, community development and research groups throughout Australia http://www.cana.net.au/. It was formed in 1998 as the Australian branch of the global Climate Action Network, which has representative groups in more than 70 nations. The aim of the network is to tackle climate change globally.

Simultaneously with the launch of the Program, CANA notified the directors of Australian companies they identified as major emitters or major facilitators of greenhouse gas emissions, of the possibility they could be sued for damage caused by their companies' greenhouse gas emissions. The notification served to put company directors on notice of the existence of climate risk, and that a failure to assess, and if necessary address, climate risk may amount to a breach of directors' duties under the Corporations Act and general law. http://www.cana.net.au/documents/legal/recipients_list.doc

Other impediments to direct action by persons affected, such as the daunting cost of litigation, also appear to be falling away. Although there are inherent difficulties and considerable expense involved in linking climate change to a corporation's activities --including providing scientific evidence that a corporation's activities have contributed to climate change and in quantifying such a change--the likelihood of Australian climate change class actions increased with the High Court's recent decision in Campbells Cash & Carry Pty Ltd v Fostif Pty Ltd http://www.austlii.edu.au/au/cases/cth/HCA/2006/41.html, which seems to clear the way for litigation funding. The Court found no critical legal obstacle preventing entrepreneurial litigation funding: funders who seek out claims to be aggregated in class action proceedings are not necessarily acting against public policy.

Government and corporate wrongdoers and their officers should thus readily be able to see the forces massing against them. And they should be concerned because they are likely to be paying any damages out of their own pockets. Insurance companies were one of the first commercial sectors to see what is coming with global warming and its potential for undermining their entire industry. Their nervousness is apparent from the fact that coverage for liability for pollution and environmental impairment are already excluded in some directors and officers policies, and those and similar exclusions are likely to spread. http://www.abc.net.au/rn/talks/bbing/stories/s1480714.htm.

Obviously governments will need to take steps to ensure that uninsured corporations and their officers will be both around and financially able to meet any damages that may be awarded against them: unless they do, we will once again end up in the all too common situation of irresponsible entrepreneurs and their sympathetic governments "privatising profits and socialising losses". The misuse of companies and trusts to appropriate private wealth whilst shirking public responsibilities like taxes and legal obligations including compensation and damages awards is already widespread: it is only likely to become more so if insurance coverage is not available for the economic fallout from global warming.

Of course governments at all levels also risk being sued, probably mainly for failing to prevent polluting activities within their jurisdiction or failing properly to take environmental impacts into consideration when planning. Even national governments are potentially liable to prosecution, primarily in actions based on their failure to fulfil their legal duties under either international or domestic law http://www.smh.com.au/articles/2004/06/18/1087245110190.html. In 2002, for example, we saw Tuvalu's Prime Minister threaten to commence legal action against Australia and the United States before the International Court of Justice. http://www.abc.net.au/am/stories/s495507.htm

So as the earth heats up, the rivers run dry, the dams empty and the icecaps melt, and as the personal cost and economic consequences come home to specific individuals or corporations who suffer loss or damage, the losers will be calling the perpetrators to account. The litigious road will be taken by persons who suffer personal injury in Australia as a consequence of climate change; by victims of diseases or viruses the incidence of which has increased because of climate change; by people who suffer damage to their Australian property as a consequence of rising sea levels, and probably even by commercial interests, such as operators of businesses connected with the wine and equine industries.

Our governments have belatedly acknowledged climate change as a real issue, but only because they know the people are extremely concerned about it and they won't be re-elected if they don't. They now seem to have moved to the next phase, which involves reports, reviews, exploring options, talking a lot, making promises and doing too little too slowly. The sad fact is that our State and Federal Governments' coffers depend so heavily on taxes and royalties from deleterious economic activities that as they see it they simply can't afford to upset the applecart. But by taking that approach they are not only guaranteeing and accelerating the inevitable, they are adding daily to the cost that eventually will come home to roost. As the number of individual victims grows, so does the number of likely litigants; as the scientific evidence becomes stronger with time, so does the prospect of their litigation succeeding; as the logic of those propositions becomes clearer, so do insurers recognise that to insure only against risks, not certainties, they must exclude liabilities of those kinds; and in the end, with luck, the individuals who are the real perpetrators will be called on personally to account.

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