As I was reading a column on business and climate change in today's Wall Street Journal, it occurred to me that an important word is missing from the lexicon of the CEOs leading the growing movement within US businesses to address climate change: indemnification. That may turn out to be more important in the long run, especially for manufacturers, than the eventual details of a cap-and-trade system for greenhouse gas emissions. The Journal column quotes Caterpillar's CEO on the desirability of business having "a seat at the table," as climate policy is developed. While I applaud Mr. Owens's foresight and that of the other corporate chiefs showing leadership on this issue, the business community needs to be very clear about its priorities for using any access they gain. Closing the door on potentially crippling future tort fights over past emissions should top the list.
Tobacco-style litigation for carbon dioxide and other greenhouse gases might sound far-fetched today, but the harbinger is already working its way through the California courts. While it might have been easy to attribute former State Attorney General Lockyer's lawsuit against six auto makers to an election year, the decision by his successor to pursue it should give business leaders pause. Anyone dismissing Jerry Brown as the old "Governor Moonbeam" doesn't understand him or California. Mr. Brown is a very savvy politician, one of the most durable and successful the Golden State has ever produced: the son of a former state attorney general and two-term governor, and himself a former Secretary of State, two-term governor, two-term mayor of Oakland, and now the AG. If you read his career as a bellwether of big, shifting trends over time, the carmakers and any other CO2-intensive firms in the state should worry. Throw in an adverse outcome in the pending US Supreme Court case on whether CO2 is a pollutant, and you'd have all the ingredients to lure the big tort-law firms away from asbestos, MTBE and other pursuits. CO2 would be the mother-lode.
Given our national predilection for rooting for the underdog and delighting in seeing the mighty brought low, many people would take pleasure in seeing oil, coal, chemical, utility, and car companies all having to defend their past greenhouse gas emissions in court. But anyone genuinely interested in tackling the causes of climate change should fear that possibility. We will make a lot more progress, much faster, if business and industry participate willingly and bring the weight of their technical and financial resources to bear on the problem. Distracting them with lawsuits over whether and when they should have known greenhouse gases were harmful won't reduce their emissions, unless it's by putting them out of business.