Tuesday, July 7, 2009

Is climate the new asbestos?


The Age Business Day, July 8, 2009

Directors of polluting industries should check their liability insurance.

JUST hours after the United States House of Representatives passed legislation curtailing greenhouse gas emissions, business groups were talking about going to court. The US Environmental Protection Agency proposition that greenhouse gas endangers public health and contributes to global warming is expected to result in a tsunami of litigation.

It's not just those court-loving Americans either. In Australia, lawyers say, if the Senate is persuaded to adopt Prime Minister Kevin Rudd's emissions trading scheme, some big emitters might well challenge the allocations they get.

Elsewhere, climate change litigation is shaping up as an issue that will tie up the judiciary, companies and politics worldwide for years. While other sectors of the global economy are bracing for the negative impact of government legislation on climate change, the litigation industry is set to boom.

Insurer Swiss Re warns that climate change litigation will be the new asbestos. In a report

(www.bit.ly/iuBjQ), it says that while courts have until now dismissed climate change lawsuits against companies, the same could be said for asbestos-related claims that surfaced in the 1950s.

"By the 1960s, these asbestos-related claims were already becoming successful," the report says. "At issue is not any correlation between asbestos and climate change, but rather the speed at which an issue can become a widespread topic for collective actions … We expect, however, that climate-change-related liability will develop more quickly than asbestos-related claims and believe that the frequency and sustainability of climate-change-related litigation could become a significant issue within the next couple of years."

Still, there is a difference between asbestos and climate change. With mesothelioma, there is a clear link between asbestos and disease. But global warming's impact is still being debated, with climate sceptics such as Senator Steven Fielding talking about "unconvincing green science".

This is not criticising the credentials of climatologists. But while questions are being raised about the scientific modelling and climatic variability, it will be tough proving causation before a judge, at least for now. Still, that might change as more scientific evidence comes to light.

The 7000-plus Torres Strait Islanders might well be the first to successfully sue for relief. A report from the Human Rights and Equal Opportunity Commission (www.bit.ly/RnW6z) found that sea levels there are already rising. Turtles and dugongs traditionally hunted for meat have grown scarce and people are now uncertain about when to plant crops.

Climate change would affect every area of their society. It could reduce freshwater levels and result in the complete loss of some plants and animals. It could result in more disease and the potential destruction of essential infrastructure such as housing, water supply and power.

The problem is compounded by the fact that Torres Strait Islanders do not have access to the same services and infrastructure as non-indigenous Australians.

The HREOC report says this group has several avenues for a successful climate-related lawsuit. These include the Queensland Environment Protection Act, which recognises people and culture as part of the environment and does not require a particular power station to be the sole cause of climate change when it orders it to pay for the costs of repairs to infrastructure. Other legal avenues include: a negligence claim, where they could argue that governments failed in their duty of care to protect Torres Strait Islanders; public nuisance, where they could argue that life, health and property has been endangered; native title; and international human rights law.

Would a successful Torres Strait Islander case create a precedent? Claire Smith, special counsel at Clayton Utz, believes courts everywhere will be bombarded with lawsuits, not all of them successful. But over time, as more scientific evidence comes to light, they will be.

"You will end up finding that litigation will become more successful as more scientific data emerges and what you will find globally is that the courts will take into account the view of the IPCC (Intergovernmental Panel on Climate Change)," Ms Smith says. "You could use those reports to translate that into litigation because, in the end, it's all about proving things on the balance of probability."

Climate change is creating all sorts of possibilities. In the meantime, directors should check their liability insurance.

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