Who will pay the climate change piper?

Shareholder activism aimed at Exxon: Judgment Day will come.


Andrew Leonard
May 23, 2006 3:35AM (UTC)

Some day, in the not too distant future, a movie mogul is going to watch her Malibu beach house crumble before her eyes, eroded away by rising sea levels, and she's going to wonder whom to sue. Insurance isn't going to cover the damages, because coastal erosion insurance is already almost impossible to get, and you can bet, as the ocean rises, that it won't get any easier to find.

Why not Exxon? We've mentioned it here before -- no corporation has expended more effort and dollars in denying that climate change exists, and at the same time, no one is responsible for more greenhouse gas emissions than the biggest oil company in the world. Connect the dots: Climate change causes rising sea levels. Humans cause climate change. Some humans cause more climate change than others. Therefore, q.e.d., some humans should be more liable than others for the damage caused. Like the executives and directors of Exxon.

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Yes, I know, this is a pipe dream, but while reading the letter sent last week by 17 institututional investors to Exxon's independent board of directors requesting a meeting to discuss Exxon's woeful record on climate change, all I could think was that this was part of an elaborate preparatory ritual, clearing the rhetorical decks, before push comes to shove on the dollars and cents of climate change.

Signed by a handful of state treasurers and controllers (including the two Democratic candidates for the governorship of California, Treasurer Phil Angelides and Controller Steve Westly, both of whom are trustees for CalPERs, California's huge public employee pension fund), and an assortment of other usual suspects, the letter writers profess to be concerned that "our company ... is not preparing for Tomorrow's Energy and will lag significantly behind its competitors."

The reference to "Tomorrow's Energy" concerns a report released by Exxon in February that, while conceding, finally, that climate change does appear to be happening, still asserted that "gaps in the scientific basis for theoretical climate models and the interplay of significant natural variability make it very difficult to determine objectively the extent to which recent climate change might be the result of human actions. These gaps also make it difficult to predict the timing, extent and consequences of future climate change."

Technically, that sentence is probably defensible in court. Which is exactly why it sounds like lawyer-approved ass-covering. Oh, and as for peak oil? Not to worry. "Global oil resources are adequate to meet demand."

Battle lines are being drawn. The letter to Exxon is part of a comprehensive campaign to hold corporations to the climate change fire by the investors' group CERES and its offshoot, the Investor Network on Climate Risk. In December, CERES released the most comprehensive report I've seen so far on the insurance risks associated with climate change. Executive summary: Financial losses associated with climate change are going to rise dramatically, insurance companies are going to flee many markets, and governments will be left holding the bag.

Which means, ultimately, that you and I will be forced to pay, via taxes, for the damage caused by climate change. But why not "our company" -- the one that has spent so much money supporting organizations such as the Competitive Enterprise Institute, currently drawing smiles across the land with its ludicrous ads touting carbon dioxide as the wonder drug? I look at a letter such as that sent to Exxon last week, and even as I know that in the immediate context of addressing the problem of climate change, it will achieve little, in the long term, it is part of the historical record, a piece of evidence that will eventually be set forth before a judge.

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I'm looking forward to covering that case.


Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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Environment Global Warming Globalization How The World Works

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