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OTTAWA—Canadian oil and gas companies could be liable for billions of dollars of damages for their contribution to climate change, according a study released today by the Canadian Centre for Policy Alternatives (CCPA) and West Coast Environmental Law (West Coast) that analyzes scenarios in which the legal landscape concerning climate damages litigation could suddenly and dramatically change.
The study, by Andrew Gage, Staff Counsel at West Coast, and University of British Columbia professor Michael Byers, considers the total potential liability of five oil and gas companies currently trading on the Toronto Stock Exchange—EnCana, Suncor, Canadian Natural Resources, Talisman, and Husky—and finds these five companies could presently be incurring a global liability as high as $2.4 billion per year for their contribution to climate change.
“Fossil fuel companies and other large-scale greenhouse gas producers have contributed, globally, to trillions of dollars of damages related to climate change. As with tobacco companies in the 1980s, these producers are confident the law will not hold them responsible for these damages,” says Gage. “But rising levels of climate damage, increasing scientific evidence about the links between emissions and the damage they cause, and an emerging public debate about who is financially responsible for this damage, could change the situation very quickly.”
According to the study, the most serious risk to Canadian companies is not litigation in Canada. Because the impacts and causes of climate change are global, climate damages litigation could take place in, and apply the laws of, any of the countries where damage occurs. These countries may also choose to adopt new laws clarifying the legal rules around climate damages litigation, much as Canadian provinces did to facilitate tobacco litigation. As a result, large-scale greenhouse gas producers and their shareholders are exposed to significant legal risks that will only grow into the future.
“Substantial shifts will be required of large-scale greenhouse gas producers and their investors if they hope to manage the risk of climate damages litigation, such as moving away from fossil fuels, and supporting the adoption of international agreements that could link the reduction of liability risk to the provision of financial assistance or future emission reductions,” says Byers.
The study concludes that given the sheer number and diversity of potential venues for litigation, and the growing interest in pursuing it, civil liability for large-scale green house gas emitters is extremely likely, particularly as the costs associated with climate change rise.
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Payback Time? What the internationalization of climate litigation could mean for Canadian oil and gas companies is available on the CCPA website, and on the WCEL website at http://wcel.org.
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