Fossil fuel companies risk plague of 'asbestos' lawsuits
Oil, gas and coal companies face the mounting risk of legal damages for alleged climate abuse as global leaders signal an end to business-as-usual and draw up sweeping plans to curb greenhouse gas emissions, Bank of America has warned.
“Some investors, such as philanthropic trusts and foundations, will also have to consider whether continuing to invest in high-carbon assets represents a significant conflict to their overall mission and objectives"
Prince of Wales
Investors in the City are increasingly concerned that fossil fuel groups and their insurers are on the wrong side of a powerful historical shift and could be swamped with exhorbitant class-action lawsuits along the lines of tobacco and asbestos litigation in the US.
“It is setting off alarm bells that there could be these long tail risks,” said Abyd Karmali, Bank of America’s head of climate finance.
Mr Karmali said the United Nations’ "COP21" climate summit in Paris in December is likely to be a landmark event that starts to shut the door on parts of the fossil industry. “It is a non-exchangeable, one-way ticket to a low-carbon economy,” he said.
Christiana Figueres, the UN’s top climate official, said 155 countries have already put forward detailed plans covering 88pc of global CO2 emissions, and others are expected to join before the deadline expires.
“It is unstoppable. No amount of lobbying at this point is going to change the direction,” she told a Carbon Tracker forum in London.
Mrs Figueres said the mood has changed entirely since the failed summit in Copenhagen in 2009. This time China is fully on board. “China is already spending more on renewables than any other country. It is going to introduce its own emissions trading scheme in 2017,” she said.
Mrs Figueres said the pledges are not yet enough to cap the rise in average global temperatures to two degrees Centrigrade above pre-industrial levels by 2100 – the "two degree world" deemed the safe limit.
The Paris commitments by the countries are known as INDCs
But the Paris accord does promise to “bend” the trajectory to 2.7 degrees and will almost certainly be followed by a series of deals that brings the ultimate target within sight. “We think most countries will be able to over-achieve,” she said.
While the exact contours are still unclear, Paris is likely to sketch a way towards zero net emissions later this century. It implies that most fossil fuel reserves booked by major oil, gas and coal companies can never be burned.
A deal would also send a moral signal with legal ramifications. Mark Carney, the Governor of the Bank England, warned last month that by those who had suffered losses from climate change may try to bring claims on third-party liability insurance.
He specifically mentioned the parallel of asbestos claims in US courts, which have mounted over the years to $85bn and devastated some Lloyd’s syndicates.
Mr Carney said it would be “premature to draw too close an analogy with climate risks” and acknowledged that previous carbon lawsuits have failed, but he warned that the risk is “significant, uncertain and non-linear”. The UN has already
floated ideas on compensation.
https://www.telegraph.co.uk/finance/newsbysector/energy/11958713/Fossil-fuel-companies-risk-plague-of-asbestos-lawsuits-as-tide-turns-on-climate-change.html