Friday, May 23, 2008

Class action climate change litigation?

My friend Stephan Faris has an interesting piece in the Atlantic on some class action lawyers who think they may be able to win lawsuits against Big Oil for their contribution to climate change. The linchpin of the case is that Big Oil, like Big Tobacco, stand accused, in what is transparently true, of conspiring to cover up the scientific consensus about the harmfulness of carbon emissions.

It's a classic form of American madness: when a well-organized, well-funded special interest manages to block the public interest in Congress, private litigation becomes a substitute for public legislation. The problem with this approach, as the Big Tobacco settlement clearly showed, is that, while we may end up with is a sensible "policy"--namely to price in the negative externalities via what amounts effectively to a higher tax--we execute it idiotically, by allowing some private lawyers take a huge cut of that tax for themselves.

One way to look at this, therefore, is that these trial lawyers are acting, de facto, as an entrepreneurial form of tax farmers. A modern American update on a feudal practice.

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