Battle Lines for Climate Litigation Experts
Attribution science and engineering are used in complex climate change litigation cases to help quantify a litigant’s contribution of total (direct and indirect or downstream) greenhouse gas (GHG) emissions. For example, experts can use life cycle analysis (LCA) to calculate the total amount of GHG emissions per unit of oil and gas extracted, transported, refined, transported again, and finally used. The International Standards Organization (ISO) has several internationally accepted standards for conducting a defensible LCA as well as best practices for quantifying GHG inventories and carbon footprints of products.
GHG estimations are categorized into those that are GHG estimations are categorized into direct and indirect. Direct emissions are called Scope 1 and are under the direct control of the asset owner. Indirect GHG emissions fall into either Scope 2 emissions (from purchased or acquired electricity, steam, heat, and cooling) or Scope 3 (all the non-Scope 2 emissions derived from either upstream or downstream from the production of Scope 1 emissions). An example of upstream Scope 3 emissions for an oil and gas company are the emissions associated with 3rd-party drilling, exploration and transportation of raw crude oil or natural gas. Downstream Scope 3 emissions could include 3rd-party transportation, sale, and consumer use of refined petroleum products.
Because Scope 1 emissions are under the direct control of a party, these will likely carry the most weight when assigning liability. In his article, Richard Heede, the co-founder of the Climate Accountability Institute estimated that 90 of the largest carbon polluters accounted for 63% of cumulative worldwide emissions during this time period. Half of these emissions occurred after 1986, when the negative impacts of GHG emissions were well known.
Although Scope 3 emissions are not under the direct control of oil and gas companies, emissions such as those from burning gasoline can be reduced through the use of more bio-fuels – such as ethanol or aviation bio-fuels. Experts will be asked to quantify the millions of tons of avoided GHGs from the potential use of new technologies versus “business-as-usual.”
Nevertheless, all attribution studies contain uncertainties that expert witnesses must be prepared to address, as they will be asked to testify as to these uncertainties and reliability of the causation arguments. They must assess the data, assumptions, and analysis. For example, experts should highlight the limitations to long-term meteorological observations and the reliability of complex climate simulations.
Experts will also point to confounding factors to support their own arguments. For example, the impact of coastal areas naturally sinking will need to be normalized against climate-induced sea level rise. This situation can be seen in Norfolk, Virginia, the site of the largest U.S. naval base. This facility regularly floods due to rising sea levels caused by climate change but also due to sinking geological conditions. This lowering of elevation has been occurring separately from man-made climate change.
Another confounding factor may include the opposing side’s argument that many climate adaptation actions (e.g., building back better) would or should have happened regardless of climate change. For example, upgrading old and dilapidated brown infrastructure with modern green infrastructure makes sense regardless of climate change. These infrastructure upgrades may benefit the plaintiffs as part of “business as usual” — separate from any additional damages due to climate change. Oil company lawyers will argue that it is only fair that any damages due to climate change must be additional to what would have happened without climate change.
Ironically, this “additionality” argument has been used by environmental groups to challenge certain types of carbon offsets. Environmental groups argue there should be no additional economic benefit resulting from valuable carbon offsets for something that would have happened anyway. Likewise, oil company lawyers could argue there should be no additional economic penalty resulting from paying for climate mitigation or adaptation actions that would have happened anyway.
On one side of the climate battle lines, savvy experts will use attribution science to link the impact of extreme climate-related events to past anthropogenic GHG emissions. Whereas the other side’s experts will point to the inherent uncertainties associated with attribution studies as well as mitigating confounding factors. As time goes on the attribution science will get better with more verifiable evidence from financial disclosures, thus reducing the many uncertainties your expert witness will have to address. The question is not who will win the current litigation battles, but rather, who will win the war?
In addition, the recently released (SEC) proposed rules on climate-related disclosures will likely help in gathering audited evidence related to GHG emissions from major emitters and, potentially, the products they produce. We will address this in a future blog, stay tuned!
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Phil Ludvigsen, PhD
Phil is a senior level business director experienced in climate change and carbon consulting services, including the development of greenhouse gas emission reports, assessment of carbon accounting systems/controls, emission baseline reductions, verification of carbon inventories and offsets, and environmental financing approaches such as green bonds. He has a proven track record of climate program development with a successful history of directing technical and financial aspects of multi-million dollar projects. Notably, Phil helped manage a $25 million strategic investment fund for American Reinsurance (now part of Munich American Reinsurance) focused on strategic environmental, health, and social loss prevention as well as cost control. In addition, he has signed off as lead greenhouse gas verifier on nearly six megatons in carbon emissions reductions under the U.S. EPA Climate Leaders program to ISO 14064-3 standards. He has also verified more than 100 facility inventories and reduction projects throughout U.S. and Canada to ISO 14064 standards, totaling more than 10 megatons of CO2e emissions. With regard to environmental financing, Phil co-developed environmental, social, and governance due diligence work stream frameworks for some of the largest pension funds in North America. Notably, he was also the first Certified Responsible Investment Professional in North America certified via the Responsible Investment Association and recognized by Investment Industry Association of Canada. Phil also sits on the Climate Bond Standards verification work group and has co-authored thought leadership on the area of Green Bonds.