During the summer just gone California was hot. As temperatures soared, hitting all time highs, over 100 deaths resulted, and Californians wondered who was to blame. While many US politicians bury their head in the sand over the dangers of global warming, the Californians fret. At dinner parties they talk about the melting snowpack in the Sierra Nevada mountains and ask whether it will eventually cause flooding so bad that Los Angeles will be no more. Whilst worshiping the sun, they bemoan beach erosion, and while out enjoying the country they chatter about the threat that pollution poses to endangered animals.
And now the State reckons its found whose to blame. It’s suing GM, Ford, Toyota, DaimlerChrysler, Nissan and Honda. Bill Lockyer, attorney general for California said: “Vehicle emissions are the single most rapidly growing source of the carbon emissions contributing to global warming, yet the federal government and the automakers have refused to act.” Mr Lockyer is reported to have said the state was seeking “tens or hundreds of millions of dollars”.
As for the suit itself, it stated: “The injuries have caused the people to suffer billions of dollars in damages, including millions of dollars of funds expended to determine the extent, location and nature of future harm and to prepare for and mitigate those harms, and billions of dollars of current harm to the value of flood control infrastructure and natural resources”.
Once the car industry and California were in love. Hollywood promoted the motor vehicle as the 20th Century’s answer to the spear in symbolising manhood, and the rest of the world bought the message. But today, the relationship has flipped. Last month, California brought in legislation to reduce carbon emissions by 25 percent, and, for its part, the car industry brought its own suit against the state, effectively arguing the legislation will cost the carmakers dear.
The industry is not taking the suit against its six biggest firms lying down either. The Alliance of Automobile Manufacturers described the Californian action as a nuisance case. It said: “Automakers will need time to review this legal complaint, however, a similar nuisance suit that was brought by attorneys-general against utilities was dismissed by a federal court in New York.”
Of course, similar action has been successful in the past - smoking suits, for example, but then equally, other cases have failed. For example, the family that tried to sue McDonalds for causing their obesity was unsuccessful.
In California they have a pressure group which refers to itself as the California Citizens Against Lawsuit Abuse. And its chairman, John Merchant, presumably with his tongue inserted firmly in his cheek said: “The AG’s complaint overlooks 36 million other sources of greenhouse gas emissions — the human beings occupying California who ought to be sued for ‘negligent breathing.”
“Californians each emit about 2.5 pounds of carbon dioxide (CO2 - a greenhouse gas) every day just by breathing. If you multiply 2.5 pounds of CO2 per day by 36 million Californians by 365 days, that’s more than 16 million tons of CO2 just from breathing. Talk about a public nuisance … and don’t even get me started on the methane people produce.”
Mr Merchant added: “This lawsuit is a public nuisance. Activist Attorney Generals who abuse our legal system and impose a system of ‘government by lawsuit’ to gain publicity and further their own political agenda do so at the expense of the people they are paid to represent. Inevitably the costs of litigation in cases like this will be passed on to consumers in the form of higher prices. Just what we all need.”
And while Mr Merchant’s irony (or is it sarcasm?) makes a good point, after all, there is no doubt some legal writs are just plain silly and stifle business; it’s hard to think of a more urgent and important matter than global warming. California should be applauded for taking the environment so seriously. But, from an economist’s point of view, the problem with pollution is that the supplier does not bear the true costs of the products it produces. As a result, the market mechanism does not work in accurately balancing the forces of demand and the true cost of supply. The answer lies in tax. Even the purest form of pro capitalist economic theory acknowledges tax should be in place to cover the cost of pollution. In that way, consumers will be asked to pay the true cost of the products they consume, and no doubt will then look more enthusiastically at green alternatives.
P.S. While we are on the subject of the environment, The UK’s scientific body, The Royal Institute has been having a go at ExxonMobil. It recently accused the giant oil company of funding groups that deny global warming is a reality. In the US, the Competitive Enterprise Institute has run a TV advertising campaign with the slogan: “Carbon dioxide: They call it pollution. We call it life.” Apparently, the oil company donated $270,000 to this company in 2005, for example.
It would appear the complaints are beginning to hurt, however, and yesterday it emerged that the Competitive Enterprise Institute, with its perfectly reasonable and not at all irresponsible ads, will be getting no money in 2006.
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