The Judicial Carbon Tax: Reconstructing Public Nuisance and Climate Change

Abstract

This Article seeks to reconstruct the public nuisance climate change cases (Connecticut v. AEP and California v. General Motors) to show that, while hardly perfect, nuisance litigation could form a reasonable basis for climate change regulation, at least as much as some of the other imperfect alternatives so far proposed. This nuisance system has promise because, as outlined here, it essentially becomes a carbon tax - precisely the policy instrument that many economists say is the best form of regulation but is routinely dismissed as politically unfeasible. The difference is that it is judicially, not legislatively, imposed.

I do not claim that the nuisance system is superior to legislation, but rather that it is a reasonable substitute in the absence of political action. More hopefully, I suggest it might provide a basis for getting this political process to respond to the climate crisis. Put another way, we might look at public nuisance litigation as a useful support for political progress. Common-law judicial activism, then, does not undermine the democratic process but rather enhances it.

The Article proceeds in five parts and comprises five major points:

Strict Liability. In climate change litigation, public nuisance is best conceptualized as a strict liability tort. I attempt to contribute to the debate by moving past strictly doctrinal analysis and presenting some theoretical reasons why, in the climate change, this should be the case. In particular, I rely on the tort theories of Guido Calabresi and Richard Posner to show why strict liability makes sense in the climate change context.

Damages. The theoretical basis for strict liability, as well as a host of policy considerations, strongly favors damages, and not equitable relief, as the proper remedy. This suggests that California's approach (which seeks damages) is superior to the eastern Attorneys General (which seeks an injunction). It also reveals that public nuisance litigation essentially serves as the judicial form of the sort or carbon tax overwhelmingly favored by economists and policy analysts. This tax-based nuisance policy suggests that the causation theories advanced by the attorneys general might not be the best approach.

State Courts. The plaintiffs and defendants all appeared to accept that climate change litigation should be based upon federal common law, but a careful examination of precedent and the structure of the Clean Air Act reveals that state law forms the more legally-sound basis of the action. This also has a series of salutary policy consequences, most particularly in its ability to enhance the workings of legislatures and allowing for regional policy diversity.

Defendants. The primacy of state law, and the actual administration of any carbon tax, suggests that the Attorneys General have pursued the wrong defendants: a more effective and legally sound action would have focused on the pursuit of upstream carbon producers.

International Implications. It is perhaps somewhat churlish to criticize those who have sued the world's largest automakers and the nation's largest power producers for not going far enough. But critics of domestic climate change regulation argue that without reducing Chinese and Indian emissions, any internal measures are doomed to fail. I suggest ways in which public nuisance litigation can affect Chinese and Indian emissions, and use the example of Tata Motors' new proposal to put 10 million inexpensive automobiles on Indian roads as an example of how US courts can achieve jurisdiction.

Keywords: Connecticut v. AEP, California v. General Motors, climate change regulation, nuisance litigation, judicially imposed regulations, political action, environmental regulations