Climate change is the largest market failure ever. In New Jersey, it’s harming our lives, our communities and our businesses in ways that we can no longer ignore or tolerate.
Floods and sea level rise threaten businesses up and down the state. Hurricane Sandy alone cost New Jersey’s economy and private businesses tens of billions of dollars. Climate change is hurting farmers and agriculture, and it could soon wreak havoc on financial markets.
But this failure has been very profitable for one particular industry: fossil fuels. And that is no coincidence. Oil giants like ExxonMobil knew for decades that burning fossil fuels would have a potentially “catastrophic” impact on the climate, but they fought to confuse the public about the science, block climate action and protect their profits. A large reason why we historically relied on fossil fuels is because this multibillion-dollar industry funded climate denial and lobbied to block alternative energy sources.
It’s past time these companies are held accountable and made to compensate the communities that have been harmed by their products and the misinformation they spread. A bipartisan measure currently before the legislature, Senate Resolution 57, calls on New Jersey to join the growing number of states, cities and counties who are fighting to recover billions of dollars in climate damages from the fossil fuel companies that knowingly caused it.
Elected officials from the freeholders of Union and Atlantic counties to the borough councils of Bradley Beach and Sea Bright in Monmouth County have already voiced their support for holding fossil fuel companies accountable. Business leaders should as well.
Everyone suffers when a business is allowed to harm the public without consequences. Courts play an important and necessary role in holding bad actors accountable, protecting consumers and maintaining public faith in our business community.
Markets fail when the playing field on which companies compete is unfairly tilted in favor of one industry, and when that industry uses its financial dominance to shape public policy and opinion for the sole purpose of getting richer at everyone else’s expense.
This year’s pandemic and economic crises have revealed how human health, our communities, economy and government institutions are intertwined, while exposing how fragile they all can be if underlying problems are allowed continue unremedied.
The escalating risks from the climate crises make decarbonizing our economy an urgent imperative. Gov. Phil Murphy and the Legislature are demonstrating the type of leadership we need by establishing clean energy targets, updated the energy master plan on how to reach them, and are moving forward on offshore wind energy, community solar, energy efficiency improvements and electrifying the state’s transportation sector.
Making New Jersey more sustainable, resilient and equitable in the face of climate change will require significant funds. It’s only fair that the fossil fuel companies who created this crisis pay their fair share of the cumulative costs that have been imposed on New Jerseyans.
This is a simple and long-established concept. It’s why tobacco companies and opioid manufacturers have had to pay for the harms they knew their products would cause. If a business knowingly sells a product that causes harm, it should be liable for that harm. This principle applies to everyone, from small businesses to multibillion-dollar fossil fuel companies.
Despite what fossil fuel defenders say, cost recovery cases brought against the industry by more than a dozen communities are working their way through the courts in states across the country. Just this year, three federal appeals courts separately ruled that climate lawsuits against fossil fuel companies in Baltimore, Colorado and California can proceed in state court. Last month, the attorneys general of Minnesota and Washington, D.C., became the latest to file consumer protection suits against Exxon and other Big Oil groups for their decades of climate change deception.
New Jersey taking similar action would represent a necessary step toward creating a fairer market where competition is based on innovation instead of exploitation, and where success is redefined as creating long-term value for all stakeholders rather than maximizing short-term profits at everyone else’s expense.
Richard Lawton is executive director of the New Jersey Sustainable Business Council (an ASBC state affiliate), a network of companies and business organizations working to advance market and policy solutions for a more vibrant, sustainable and equitable economy.