Allocating Responsibility for the Failure of Global Warming Policies

Abstract

A recent series of climate change lawsuits has sought to mimic the "regulation through litigation" approach of the claims brought by the states against cigarette manufacturers. What is distinctive about the cigarette cases relative to conventional tort claims is that they were not brought on behalf of individual smokers, but rather sought to recoup the Medicaid-related costs of smoking. A parallel climate change litigation approach seeks payments from public utilities, energy producers, and other parties responsible for greenhouse gas emissions to reflect the long-term societal damages that the plaintiffs claim will be caused by this pollution. While environmental litigation of this type is unprecedented, the cigarette cases were novel as well. The cigarette litigation did not establish legal precedents because the cases were settled without any court verdicts, but the threat of the suits was sufficiently real that it led to damages payments of close to $250 billion. Here we examine the similarities and differences between lawsuits seeking to recoup the value of financial externalities caused by smoking and lawsuits targeted at the value of environmental damages due to global warming.