Back to top

Albertans, not Exxon Mobil, are paying the price for carbon

July 3, 2013

“We have spent our entire existence adapting. We'll adapt.  [Climate Change is] an engineering problem and there will be an engineering solution.” – Rex Tillerson, CEO, Exxon Mobil

The Bank of Montreal is estimating that it will take $3 Billion to $5 Billion to clean up Alberta’s floods, and the Premier of Alberta is predicting it may take 10 years.  And that’s just to repair the damage from this year’s flooding, and doesn’t include the cost of planning and implementing measures to adapt to the changing global climate needed to protect Albertans from future flooding. 

Add to this the damages caused by flooding the same month in Eastern BC, as well as in India and in Europe

As many have pointed out, it is notoriously difficult to link a particular weather event to climate change, but climate scientists (not to mention the Canadian government) have warned that flooding and extreme weather events will be more common due to climate change. 

As an aside, it is possible to link some weather events to climate change – it has been proven that the likelihood of flooding in the U.K. in 2000 was doubled due to climate change.  Time will tell if scientists demonstrate a similar connection between Alberta’s flooding and rising global temperatures.

However, even if scientists ultimately prove the link that many of us suspect, it’s safe to say that Exxon Mobil, and Mr. Tillerson, don’t intend to pay for any climate-change related costs suffered by Alberta or other jurisdictions, or for the costs of adapting to climate change. 

For the most part that cost falls to the people impacted by the flooding and, to the extent that there is help, the Canadian and Albertan tax payers.

The price of carbon

The Canadian government has taken to referring to any attempt to put a price on carbon – as a means of putting a brake on the greenhouse gases that cause climate change – as a “job killing carbon tax,” and has promised not to bring in measures that will harm the economy.  Ironically, the government concedes that its proposed approach to regulate greenhouse gases will raise costs and thereby impact consumers – but argues that this is not the same as a carbon tax because it will not raise funds for the government (funds which might be useful when faced with Alberta’s flooding). 

Ironically, the same federal government recently pledged to charge provinces and communities for the cost of the Canadian military assisting with disaster relief, although it appears that this approach may now have been dropped in the wake of the Alberta flooding (and a good thing too). 

The National Roundtable on Environment and the Economy has estimated (conservatively in our view) that the cost of climate change to Canada could rise to ¼ of the nation’s GDP (the cost is expected to be $5 Billion per year by 2020).  As the impacts of climate change get worse and worse, we, Canadian taxpayers, will increasingly be asked to bear the cost of climate change inflicted on us by greenhouse gas polluters. 

Litigation as a price on carbon

When governments don’t price carbon, and help with the costs of extreme weather events and other climate disasters, the public will sometimes turn to the courts. 

On Environmental Law Alert we have previously referred to a number of lawsuits brought by the victims of various extreme weather events and climate impacts against large-scale greenhouse gas polluters.  Just last month one such lawsuit – Comer v. Murphy Oil, filed by the victims of Hurricane Katrina against major greenhouse gas polluters – was in the news as it came to an unsuccessful and unsatisfying end.  Like many Albertans, the plaintiffs in Comer saw their homes devastated by a storm, and inundated by water.  They sued large-scale greenhouse gas polluters and have since been fighting for their day in court.  The history of the case is very convoluted and, frankly, bizarre, and anyone interested will want to read one of the several commentaries about the case history that are available.  However, it is worth noting that the case was set aside for procedural reasons, and does not prevent possible future climate litigation.  At least one commentator suggested, last February, that despite such set-backs climate litigation is just heating up

I mention the case to illustrate that if the very real damages being suffered by climate change are not addressed by governments, then these issues may well end up in the courts.  There are challenges in doing so – just as there were when tobacco litigation (which was also initially unsuccessful) first arose

In 1987, Bruce A. Levin published an article in the Arizona Law Review that said:

"Tobacco companies boast that they have never lost a case to a consumer, have never settled, and do not expect that picture to change. In the 1950s and 1960s, no cases successfully obtained damages for injuries caused by smoking. Recent cases have been similarly unsuccessful." —Bruce A. Levin, The Liability of Tobacco Companies — Should Their Ashes be Kicked?” 29 Ariz. L. Rev. 195, 200 (1987).

Of course, as predicted by Mr. Levin, things changed.

There is no doubt that filing a lawsuit related to the Alberta floods or other damages in Canadian courts would be challenging in the short term, although I have a paper coming out in the Journal of Environmental Law and Practice in the coming months that sets out one legal theory that might help with such litigation (more on that in future posts).  However, in the long run, as damages from climate change continue to rise, there will be increasing pressure on both governments and courts to make greenhouse gas polluters pay for the damages that they are causing. 

How about we price carbon?

Asking Canadian taxpayers to pay for the impacts of, and the cost of preparing for, climate change is not economically sustainable.  As extreme weather events, flooding, rising sea levels, spreading disease, crop failures and other impacts become real, we’re simply not going to be able to afford the cost. 

A real price on carbon, paid by greenhouse gas polluters, would both create an economic incentive to reduce emissions, and, equally significantly, could help fund disaster relief, and the implementation of measures to help make Canadian communities more resilient to the impacts of a changing climate.  

By Andrew Gage, Staff Lawyer

Photo by Ryan L.C. Quan under the Creative Commons Attribution-Share Alike 3.0 unported licence (obtained from Wikimedia Commons).