Who should pay for past climate losses?

On Friday, Louie and I were invited to comment on an article describing moves by several US states to make fossil fuel producers pay to cover costs related to climate disaster recovery and adaptation.  It’s a great topic with many layers so I decided to respond with a proper article (or perhaps two, we’ll see how things go).

I should preface my thoughts by stating that I’m not a lawyer. I am a statistician and economist.  I’ve often argued, though, that stats and law have a lot in common – evidence-based inference to test uncertain hypotheses – but this doesn’t qualify me for elevation to the bar in any jurisdiction, except perhaps a kangaroo court or the court of public opinion.  

If oil companies can be shown to have broken the law as it stands, they should be punished accordingly.  That’s my understanding of how the law is supposed to work. 

There are two core issues here.  On the one hand, there is the question of whether, and to what extent, oil companies should be punished for past actions that have contributed to the climate mess we’re currently in.  The second issue, as a matter of public policy, is whether it’s a good idea to bankrupt the oil companies, either through the use of policy or litigation, right now.  On the latter score, we need to balance economic outcomes in the short and medium term with the imperative to ultimately save the planet from the effects of global warming.

I think it’s instructive to compare and contrast the legal issues associated with climate change to those that have impacted the tobacco industry in recent decades.