Environment

Holding Big Oil Liable For Climate Crisis Could Parallel US Tobacco Litigations

Widespread lawsuits holding the oil industry responsible for the climate crisis are likely to have significant consequences, similar to those that emerged from tobacco litigations in the 1990s.

The oil industry has found to have had knowledge of the dangerous effects of carbon emissions from burning fossil fuels. Credit: Reuters/Bret Hartman

The oil industry has found to have had knowledge of the dangerous effects of carbon emissions from burning fossil fuels. Credit: Reuters/Bret Hartman

What is common between Big Tobacco and Big Oil? Not much at first sight, but a little probing shows deep connections between the two. Both knew that their products were harmful, both hired the same public relations firms, both funded the same scientists to deliver pre-determined results disguised as independent research and both lied to the public.

The efficacy of this approach helped the tobacco industry fend off legal action for nearly 40 years in the US. The first wave of tobacco litigation began with the 1950s cancer scare when medical research linked smoking with lung cancer.

Armed with the strategy of attacking the tobacco industry by establishing a causal link between the two, and encouraged by the prospects of a high-profile victory or a large monetary settlement, litigants and lawyers pursued cases in the court. As expected, the wealthy tobacco industry proved to be a tough opponent. These cases depended on expert witness testimonies, which were successfully countered by the tobacco industry. Big Tobacco neither lost nor settled any case.

The second wave, which began in the 1980s, also fell short of a victory for the plaintiffs. The US Supreme Court accepted the tobacco companies’ defence that they had to only comply with the statutory warning label requirement of smoking being hazardous to health and that it was the smokers’ freedom of choice to smoke.

The third wave of litigation was spurred by the leak of The Cigarette Papers – thousands of incriminating confidential memos spanning four decades – that revealed what Big Tobacco knew and how they spread doubt and obfuscation.

This led to an upswell of public opinion against the tobacco industry and the filing of class action lawsuits. Soon after, the attorneys general of several US states took the unprecedented step of suing tobacco companies on the behalf of the taxpayers and asked for a reimbursement of the medical costs of smoking related diseases that were paid for by the states.

In 1998, four of the largest tobacco companies in the US entered into a Master Settlement Agreement with all 50 states. The terms of the agreement included a massive monetary payment of $206 billion over a period of 25 years, limitations on outdoor advertisements, sponsorships and lobbying, a ban on targeting youth and the dissolution of certain non-profit organisations that were funded by the tobacco industry.

Subsequently, in 1999, the US Department of Justice filed a claim against major Tobacco companies under the Racketeer Influenced and Corrupt Organisations Act (RICO) on the grounds that the tobacco companies had engaged in a conspiracy to mislead the public about the risks of smoking and the addictiveness of nicotine, deceptive marketing techniques, targeting youth consumers and not producing safer cigarettes.

Finally, after many years of trial and a series of appeals, nine tobacco companies were held guilty of violating the RICO in 2010. 

Sowing climate change scepticism

Successful legal action against the tobacco industry has now inspired the fight against a bigger existential threat – climate change. Like Big Tobacco, Big Oil was also aware of the dangerous effects of carbon emissions from burning fossil fuels, but remained silent and actively misled the public.

The oil industry is known to have funded contrarian research, through both individual scientists and front groups. At the government level, it has lobbied vigorously to block climate related regulation and influenced policy making. At the community level, it has artificially mobilised citizens’ movements and targeted the youth. These tactics bear an uncanny resemblance to those of Big Tobacco, except that it was in fact Big Oil that taught Big Tobacco to master the denial game.

The fossil fuel industry has cast an infinitely wide net. The climate change doubt has been, for the past few years, examined by some scientists – Naomi Oreskes in her book Merchants of Doubt and by non-profit organisations – Greenpeace in its report titled ‘Dealing in Doubt,’ but two of the most highly indicting reports yet were released recently.

The aptly titled ‘The Climate Deception Dossiers’ was published last year by the Union of Concerned Scientists. It details the climate change scepticism organised by major fossil fuel companies such as ExxonMobil, BP, Chevron Corporation, Royal Dutch Shell and Peabody Energy. The second report, which was released in April by the advocacy group Centre for International Environmental Law reveals that major oil companies have known about climate change much longer than was previously thought.

Documents analysed in these reports show that since the 1940s, when Los Angeles began to experience choking smog, challenging scientific evidence became a major tool for the oil industry.

ExxonMobil – then Humble Oil – secretly sponsored research to determine if fossil fuels caused an increase in atmospheric carbon dioxide, but later when an obvious link was established between man-made emissions and smog, the company’s scientists expressed doubt about the same. By the 1950s, Humble Oil’s scientists were studying climate science and were aware of a link between fossil fuel combustion and an increase in the levels of carbon dioxide.

In 1968, in a report to the American Petroleum Institute (API) – a trade association of the US oil and natural gas industry – industry funded scientists warned that carbon dioxide emissions from fossil fuels were interfering with the atmosphere’s natural carbon dioxide removal capacity and could result in an increase in temperature.

The report further stated that rising temperature could melt Arctic ice caps, raise sea levels and warm the oceans. It specifically warned of near certain temperature changes by the year 2000, serious environmental damage worldwide and ‘climatic changes.’ Instead of reducing carbon emissions, as suggested by the report, the oil industry began funding research into alternate theories of global warming in order to shift blame away from itself.

Several other incidents expose repeated patterns of deception and lobbying. For example, fearing stricter air quality standards, oil companies lobbied to thwart legislation till the 1970s. When scientific consensus on climate change coalesced and the Intergovernmental Panel on Climate Change was formed in 1988, the fossil fuel industry launched a renewed and powerful scepticism campaign that has ensued ever since. A 1998 memo by the API that was clearly meant to prevent US ratification of the Kyoto Protocol, states that “victory” would be achieved when average citizens and media would understand “uncertainties” in climate science and such “uncertainties” become part of the “conventional wisdom.”

Holding the fossil fuel industry accountable

In November, New York Attorney General Eric Schneiderman subpoenaed ExxonMobil seeking documents from 1970s onwards in order to determine what the company knew about climate change and what it had told its investors and the public at large.

There is a possibility of a massive fraud due to the company’s failure to disclose climate risks to its shareholders, owing to which its securities could be overvalued. A number of other US states have followed suit and now a coalition of attorneys general is currently investigating top fossil fuel companies. Pertinently, the US Securities and Exchange Commission has also begun looking into ExxonMobil’s accounts.

While only an investigation is being carried out at the moment, and a trial, if any, is likely to continue for a few years, there will likely be many significant consequences, similar to those that took place in the third wave of tobacco litigation.

Firstly, it will lead to the disclosure of vital confidential internal documents, which will, at the very least, enable the emergence of a correct and well informed public narrative on climate change.

Secondly, since there is a preliminary indication that ExxonMobil and other major fossil fuel companies have conspired to keep knowledge of climate change dangers hidden from the public, there is a chance of successful prosecution by the US Department of Justice under RICO.

Thirdly, it will leave the fossil fuel industry open to a variety of climate change class action lawsuits based on damage caused to local ecosystems, public health and human rights.

Apart from the litigation, another lesson could be drawn from the tobacco industry precedent. Article 19 of the World Health Organisation’s Framework Convention for Tobacco Control has untapped potential for holding tobacco companies liable. It gives parties the power to frame new laws or utilise existing ones in order to deal with criminal and civil liability, including compensation. It further exhorts parties to assist one another in such proceedings. A similar mechanism may be devised by the United Nations Framework Convention on Climate Change to hold the fossil fuel industry liable for its wrongdoings and demand compensation.

The increased traction of legal action against the fossil fuel industry vis-à-vis climate change is a welcome step. In the US, 21 youths have filed a lawsuit against the US government asserting that in causing climate change, the federal government has violated the youngest generation’s constitutional rights to life, liberty, property and has failed to protect essential public trust resources.

Last year, a Dutch court ordered the Netherlands government to cut emissions by 25% within five years, and a Peruvian farmer sued the German energy company RWE for climate change.

Similar suits have been filed in Pakistan, New Zealand and Canada. More recently, in July, the Commission on Human Rights of the Philippines accused, and is investigating, 47 major carbon polluters of playing a role in natural disasters caused by climate change to the country. With stakes so high for humans, animals and vegetation everywhere, the time for holding fossil fuel companies accountable has never been more appropriate.