Blog Climate Change & Environment Global

Climate Lawsuits and Regulatory Restrictions Hobble America’s Climate Leadership

By: Ambassador (ret) Richard Kauzlarich, CESP Co-director

This blog item expands on an opinion piece that appeared in the International Business Times on August 28, 2022. It includes a suggestion for cooperation with National Oil Companies on climate change.

The threat of climate change is global. Addressing the challenge will take a collective, international effort to address the causes and impacts of climate change. The United States can reduce carbon emissions and mitigate the climate impacts of current and past carbon emissions through local and national measures. We cannot do this alone. Progress requires international action. 

The debate over how to combat climate change has intensified. With difficulty, the international community has produced agreements to protect the environment and climate. The world enacted the universally successful Montreal protocol, which helped combat damage to the ozone layer, and the 1997 Kyoto Protocol, the very first global climate change treaty. One can debate whether these were enough to address the global climate challenge, but they set the stage for further international action on climate.

The most consequential international agreement is the 2015 Paris Climate Accord. The Paris Accord brought “all nations into a common cause to undertake ambitious efforts to combat climate change and adapt to its effects.” It is not perfect, but it offers further confirmation that if enough countries come to the table (with reasonable national programs), such collaboration can produce progress. Given the carbon emissions that come from China, Russia, and India, America cannot achieve this progress alone. The results of the COP 26 meeting in Glasgow, UK, proved that point. Countries can do more to reduce current and past carbon emissions. But national and sub-national action must support rather than hinder the global effort.

Unfortunately, a group of American state and local governments impedes that effort. They are engaging in a litigation crusade to hold the fossil fuels industry responsible for climate change.

At the same time, the Supreme Court of the U.S. (SCOTUS) has stated the EPA’s regulatory reach over carbo emissions must be confined to the direction mandated to the agency by Congress. The U.S. energy sector is caught between multiple legal dynamics based on potentially unlimited (including international) reach of subnational governments to regulate energy companies to achieve climate change objectives. The second is a prohibition of national emissions regulation not explicitly permitted in Congressional legislation.

Local governments may be frustrated by the lack of international progress on the climate, but extreme litigation tactics will only set us back. Then there is the impact of the geopolitical conflict with Russia regarding Ukraine. These lawsuits — penalizing fossil energy use in North America and Europe — come as global sanctions on Russian oil require increased oil and gas production and more international collaboration to limit carbon-based emissions.

Dr. Gary Hufbauer, a Senior Fellow at the Peterson Institute for International Economics, recently pointed out that these lawsuits don’t address foreign state-owned energy companies like Russia’s Gazprom, Saudi Arabia’s Aramco, and Venezuela’s PetrĂ³leos de Venezuela. Because these National Oil Companies (NOCs) are state-owned and are far less concerned about the environment and climate change than the privately-owned companies U.S. state and local governments are suing.

So, if successful, these lawsuits will make energy more expensive for American consumers while giving state-owned energy companies greater market power. At the same time, the SCOTUS ruling could prevent necessary future regulation of the fossil fuel sector from dealing with the methane releases associated with increased oil and gas production. These complex approaches to necessary energy regulation will create challenges in the fight against climate change, American energy security, or global resistance to Russian aggression in Ukraine.

Finding a constructive transition from current energy use requires international and domestic cooperation. It must include the energy companies as partners in this effort. Right now, fossil fuels are still an essential staple for a growing economy. The public and most politicians view the supply and demand for fossil fuels as a significant factor in the inflation gripping the U.S. (and the global) economy. President Biden and other leaders should call for increased U.S. (and global) fossil energy production in response to sanctions on Russian oil.

There is no disagreement about the severity of climate change. We need solutions at the national and sub-national levels to support progress at COP27 this November in Sharm el-Sheikh, Egypt. Cross-border collaboration, not misguided local government lawsuits or restrictions on EPA’s regulatory reach, is the best prescription for such a pressing global challenge.

The much-criticized EU-Azerbaijan MOU on strategic partnership in energy may provide a potential model for cooperation between NOCs and the international community. While non-binding, the MOU provides for E.U. support to increase the production and transportation of Azerbaijan gas to European markets in exchange for Azerbaijan’s support to meet the Global Methane Pledge made at COP-26. The U.S. and the E.U. are promoting this effort with other countries.

Richard D. Kauzlarich is a former U.S. ambassador, co-director of the Center for Energy Science and Policy, and a Distinguished Visiting Professor at George Mason University’s Schar School of Policy and Government.

Image: World Atlas