A Pandora’s Box: Suing Oil Companies, Consumers Pay

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

Some members of the Los Angeles city council hope to join San Francisco, Oakland and New York City is suing oil companies on the principle that the costs associated with climate change (as a result of using fossil fuels) are a burden to the city and its taxpayers. If successful this precedent would open a Pandora’s box of problems for companies and the government itself, not to mention rather than relieving taxpayers of costs it would add to their financial burdens.

One of the movers behind this plan is city councilman Mike Bonin, who pushed for a “road diet” plan in his district reducing driving lanes to ostensibly reduce traffic accidents and deaths. At the same time, the plan clogged roadways, frustrated drivers, and lead to a recall effort against the councilman. One argument levied against Bonin was that the idling cars in the line of traffic added to pollutant build-up. Under Bonin’s proposal of attacking climate change through lawsuits is not he and those who created the road diet plan susceptible to a lawsuit? You get the point where this could lead.

Beyond the dangers of opening a lawsuit encrusted Pandora’s box there is a practical concern for taxpayers under the idea of suing oil companies for climate change damage. If the idea is that the lawsuits will force companies to pay money to cities (another way to enrich government coffers) ultimately it will be the taxpayers in whose name the lawsuits are generated who will pay the ultimate price.

This economic theory is not far from the debate held in the California legislature over the last session dealing with extending the cap-and-trade law.

Requirements for companies to participate in cap-and-trade–designed, proponents told us–to clear up the environment, would come at a cost to companies that would eventually be passed on to consumers. The Legislative Analyst opined that the cap-and-trade extension would cost consumers up to 79-cents per gallon of gas by 2031. Adding billions of dollars on oil companies to pay money to governments as an offset against costs of climate change will filter down to the consumers and pump up per gallon gasoline costs even higher.

The ultimate goal for many who support such a plan is to eliminate the use of fossil fuels or make them prohibitively too expensive to use. Once again, those on the lower end of the economic ladder would be the first to feel the effects of such a move. But the economy as a whole would suffer under dramatic and too swift changes on the energy front.

 

 

 

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