Amicus Curiae Brief — Suncor Energy (U.S.A.) Inc., et al., Petitioners v. County Commissioners of Boulder County, et al.

Supreme Court briefMay 21, 2026

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No. 25-170

IN THE

Supreme Court of the United States

SUNCOR ENERGY (U.S.A.) INC., ET AL.,

Petitioners,

COUNTY COMMISSIONERS OF BOULDER COUNTY, ET AL.

___________________________________________________________

Respondents.

On Writ of Certiorari to the

Supreme Court of Colorado

____________________________________________________________

BRIEF OF AMICUS CURIAE

PROFESSOR JASON JOHNSTON

IN SUPPORT OF PETITIONERS

____________________________________________________________

AMY C. MILLER

Counsel of Record

EIMER STAHL LLP

2 East Mifflin Street

Suite 703

Madison, WI 53703

(608) 620-8347

amiller@eimerstahl.com

Counsel for Amicus Curiae

TABLE OF CONTENTS

STATEMENT OF INTEREST ................................. 1

INTRODUCTION AND SUMMARY

OF ARGUMENT ...................................................... 2

ARGUMENT ............................................................ 3

I. Climate-Change Lawsuits Will Likely

Shrink Domestic Fossil-Fuel Supply,

Increase Consumer Prices, and Jeopardize

U.S. National Energy Security ..................... 4

A. Retroactive Climate-Change

Liability Will Reduce Domestic

Fossil Fuel Supply and Increase

U.S. Retail Prices. .................................... 7

B. The Impact of Retroactive Liability

for Fossil-Fuel Production on Oil

and Natural Gas Supply and

Prices Will Reverberate Across

the U.S. Economy in Higher Prices

for Many Goods and Services. ............... 16

C. Retroactive GHG Liability Will

Significantly Reduce U.S. Energy

Security, Making the U.S. Dependent

on Foreign Fossil-Fuel Supply and

Wiping out America’s Energy

Independence. ........................................ 20

-i-

II. Climate-Change Lawsuits Will Increase

the Social Cost of Climate Change,

Further Burdening the National

and Global Economies ................................. 29

CONCLUSION ....................................................... 34

- ii -

TABLE OF AUTHORITIES

Cases

American Electric Power, Inc. v. Connecticut,

564 U.S. 410 (2011) ................................................ 4

City of New York v. Chevron Corp.,

993 F.3d 81 (2d Cir. 2021) ..................................... 4

City of Oakland v. BP PLC,

969 F.3d 895 (9th Cir. 2020).................................. 5

Rocky Mt. Farmers Union v. Corey,

730 F.3d 1070 (9th Cir. 2013).............................. 21

Statutes

Cal. Code Regs. tit. 17, §§ 95480, et seq. ................. 21

Cal. Health & Safety Code, §§ 38500, et seq. .......... 21

Cal. Pub. Res. Code § 25354.4 ................................. 20

- iii -

Other Authorities

A. Damodaran and Shamta Thakkar, A

Preliminary Survey of the Climate Policy of

OPEC and OPEC+ Countries - Discussion

Paper (Dec. 10, 2020) ........................................... 31

Abigail Gerry, Inside the Oil Alliance: OPEC vs.

OPEC+, Mansfield Energy (Apr. 14, 2025) ......... 31

Anton L. Delgado and Aniruddha Ghosal, Iran

war pushes countries into energy triage as they

conserve power and curb soaring prices,

Associated Press (Mar. 17, 2026) ........................ 27

Ayana Isles, Why the Strait of Hormuz Is More

Than an Energy Crisis, Georgia Tech News

Center (Apr. 3, 2026) ........................................... 26

California Field Production of Crude Oil, Energy

Info. Admin. (Apr. 30, 2026) ................................ 22

California Further Restricts Oil Production with

Three New Bills, Inst. Energy Rsch.

(Oct. 3, 2024) ........................................................ 20

Erick Parel, California is within weeks of a

shutdown,

Energy News Beat (Apr. 23, 2026) ...................... 22

Capital & Main, As prices climb, California

imports more gasoline made from Russian oil,

Daily Kos (Apr. 22, 2026) .................................... 23

- iv -

Climate Accountability Institute and Union of

Concerned Scientists, Establishing

accountability for climate change damages:

Lessons from Tobacco Control

(June 14, 2012) ............................................... 24, 25

Emissions Leakage, Sustainability Directory

(Apr. 7, 2025)........................................................ 32

Erik Kreil, United States produces more crude oil

than any country, ever, Energy Info. Admin.

(Mar. 11, 2024) ..................................................... 23

Five key impacts of LNG supply disruption via

Hormuz, Timera Energy (Mar. 2, 2026)........ 26, 27

Francis Annan and Wolfram Schlenker, Federal

Crop Insurance and the Disincentive to Adapt to

Extreme Heat,

105 Am. Econ. Rev. 262 (2015) ............................ 32

Gary S. Becker, Economic Theory (2d ed. 2007) ....... 8

Governor Gavin Newsom, People of the State of

California v. Big Oil (Sept. 16, 2023) ............ 25, 26

Harun Alp et al., Second-Round Effects of Oil

Prices on Inflation in the Advanced Foreign

Economies, Bd. Governors Fed. Rsrv. Sys.

(Dec. 15, 2023) ...................................................... 18

Hayley Chouinard and Jeffrey M. Perloff,

Incidence of federal and state gasoline taxes,

83 Econ. Letters 55 (2004) ................................... 20

-v-

How much oil is produced in the US?, USA Facts

(Aug. 21, 2023) ..................................................... 12

Jason S. Johnston, Climate Rationality: From

Bias to Balance (2021) ......................................... 19

Jason S. Johnston, Fossil Fuel Production Under

Liability for Climate Change,

32 Int’l J. Econ. Bus. 411 (2025) ............8, 9, 11, 31

John Abeln, New Low Reached for Permian

Natural Gas Prices, RBN Energy LLC (Apr. 16,

2026) ..................................................................... 28

Jonathan Yee, Thailand bans fuel exports amid

Mideast crisis, ICIS (Mar. 4, 2026) ..................... 27

Josh Delfosse, How to Navigate the Impact of

Closing Oil Refineries in California,

Breakthrough (Oct. 28, 2025) .............................. 21

Kalen Goodluck, 10 Everyday Products Derived

from Petroleum, PBS SoCal

(Apr. 27, 2019)................................................ 17, 18

Kangni R. Kpodar and Boya Liu, The

Distributional Implications of the Impact of

Fuel Price Increases on Inflation,

Int’l Monetary Fund (Nov. 12, 2021)................... 16

Kevin M. Camp, The relationship between crude

oil prices and export prices of major

agricultural commodities,

U.S. Bureau of Labor Statistics (April 2019)...... 17

- vi -

Land Use Planning for Disaster Resilient

Communities, Austl. Inst. Disaster Resilience,

Dep’t of Home Aff. (1st ed. 2020)......................... 30

Lutz Kilian and Xiaoqing Zhou, A broader

perspective on the inflationary effects of energy

price shocks,

125 Energy Economics (Sept. 2023) .................... 16

Merek Roman, Improved efficiency is enabling

record U.S. crude oil production from fewer

rigs, Energy Info. Admin. (Dec. 23, 2024) ........... 10

Mohamed K. Omer, Iran War Exposes Africa’s

Vulnerability to Global Energy Shocks,

The Pan African Review (Apr. 17, 2026)....... 27, 28

Naser Ameen, U.S. crude oil production rose by

2% in 2024, Energy Info. Admin.

(Apr. 16, 2025)........................................................ 6

Naser Ameen, U.S. crude oil production rose in

2025, setting new record, Energy Info. Admin.

(Mar. 31, 2026) ..................................................... 24

Nathan S. Balke et al., The Shale Revolution and

the Dynamics of the Oil Market,

134 Econ. J. 2252 (2024) ...................................... 15

Natural Gas: The Backbone of Reliable Power,

Nw. Gas Ass’n (Apr. 9, 2025) ............................... 18

- vii -

Nicole Jao, Valero to shut Benicia refinery due to

tough regulatory environment, high costs,

Reuters (Apr. 24, 2025) ........................................ 21

Norman J. Hyne, Nontechnical Guide to

Petroleum Geology, Exploration, Drilling, and

Production (3d ed. 2012) ...................................... 10

Office of the President of the Philippines,

President Marcos orders temporary 4-day

workweek in some gov’t agencies

(Mar. 6, 2026) ....................................................... 27

Patrick Canning et al., The Role of Fossil Fuels in

the U.S. Food System and the American Diet,

U.S.D.A. (Jan. 2017) ............................................ 17

Pennsylvania’s Looming Climate Cost Crisis: The

Rising Price to Protect Communities from

Extreme Heat, Precipitation, and Sea Level

Rise, Ctr. for Climate Integrity (July 2023).......... 6

Peter H. Howard and Minhong Xu, Enacting the

“Polluter Pays” Principle: New York’s Climate

Change Superfund Act and Its Impact on

Gasoline Prices, N.Y.U. Inst. Pol’y Integrity

(Nov. 22, 2022) ....................................................... 8

Philip MacFarlane, Viewpoint: California Must

Consider Emissions from Foreign Oil,

California Energy J. (Oct. 22, 2025) ................... 22

- viii -

Rolf Golombeck et al., OPEC’s market power: An

empirical dominant firm model for the oil

market,

70 Energy Econ. 98 (2018) ................................... 12

Ryan Kellogg and Mar Reguant, Energy and

environmental markets, industrial

organization, and regulation,

5 Handbook of Industrial Organization (2021) .. 10

Ryan Kellogg, The Effect of Uncertainty on

Investment: Evidence from Texas Oil Drilling,

104 Am. Econ. Rev. 1698 (2014) .......................... 11

Shaheer Naveed and Eric Weiser, As Reliance on

Imported Gasoline Rises, California Adapts to

a ‘New World’, OPIS (Nov. 4, 2025)..................... 22

Sharat Ganapati et al., Energy Cost Pass-Through

in US Manufacturing: Estimates and

Implications for Carbon Taxes,

12 Am. Econ. J.: Applied Econ. 303 (2020) ......... 30

The United States exported 30% of the energy it

produced in 2024, U.S. Energy Info. Admin.

(Aug. 12, 2025) ..................................................... 13

Top Permian Oil and Gas Producers: Five-Year

Production, Rextag (Apr. 29, 2024) ..................... 15

Transportation Economic Trends: Contribution of

Transportation Services to the Economy and the

Transportation Satellite Accounts,

U.S. Dep’t of Transp., Bureau Transp. Stat. ...... 16

- ix -

U.S. Exports of Crude Oil,

Energy Info. Admin. (Apr. 30, 2026) ............. 13, 14

U.S. Liquefied Natural Gas (LNG) Exports Fact

Sheet, U.S. Dep’t of Energy (Mar. 2025) ............. 24

US Natural Gas Prices in 2026: Henry Hub

Outlook, LNG Export Boom, and What It Means

for Global Markets,

EnergyPrices.Net (Apr. 2, 2026) ......................... 28

W.D. Walls and Xiaoli Zheng, Fracking and

Structural Shifts in Oil Supply,

43 Energy J. 1 (2022) ............................... 13, 14, 15

William F. Shughart II, Disaster Relief as Bad

Public Policy,

15 Indep. Rev. 519 (2011) .................................... 33

-x-

STATEMENT OF INTEREST 1

Professor Jason Johnston is the Blaine T. Phillips

Distinguished Professor in Environmental Law and

Director of the Olin Program in Law and Economics

at the University of Virginia School of Law. He has

authored numerous peer-reviewed articles and books

on environmental law, energy policy, and the

economic implications of regulatory frameworks. His

scholarship has been cited by courts and policymakers

in the United States and abroad.

Professor Johnston submits this brief as amicus

curiae to offer the Court an economic and legal

perspective on the far-reaching consequences of

climate-change litigation. His interest in this case

stems from a longstanding academic commitment to

analyzing the intersection of law, economics, and

energy policy, particularly as it relates to the national

and global effects of fossil-fuel regulation. He has no

personal or financial stake in the outcome of this

litigation.

1 Pursuant to Supreme Court Rule 37.6, undersigned counsel

states that no counsel for a party authored this brief in whole or

in part, that no counsel for a party or party made a monetary

contribution intended to fund the preparation or submission of

the brief, and that no entity or person other than amicus curiae

and his counsel made such a monetary contribution.

-1-

INTRODUCTION AND SUMMARY

OF ARGUMENT

This case presents a question of exceptional

national importance: whether state and local

governments may invoke state and local law to

impose sweeping liability on fossil-fuel producers for

global climate change. The claims advanced by

Respondents—seeking to hold energy companies

liable for the alleged cumulative, worldwide effects of

the lawful production and sale of fossil fuels—are

emblematic of a broader litigation trend that

threatens to destabilize the national economy,

undermine energy security, and erode federalism.

If permitted to proceed, these suits will expose

producers to retroactive liability for decades of lawful

conduct, chilling investment, curtailing supply, and

driving up prices across sectors that depend on

affordable and reliable energy. The economic

consequences would be severe and far-reaching,

affecting everything from transportation and

agriculture to manufacturing and consumer goods.

What is more, the lawsuits risk exacerbating the

very harms that they purport to redress. Because they

would shift production to less regulated jurisdictions,

they would likely increase global emissions—a

phenomenon known as “emissions leakage”—while

punishing domestic producers. Put differently, these

cases would enable municipalities to externalize the

costs of local adaptation onto non-resident taxpayers

and

businesses,

distorting

incentives

and

-2-

paradoxically increasing the alleged harm from

adverse weather events. Additionally, by shifting

costs onto non-residents with no electoral voice in

influencing adaptation decisions by plaintiff

jurisdictions, such interstate cost-shifting also raises

serious concerns about democratic accountability.

This Court has long served as a guardian of the

national marketplace, ensuring that matters of

interstate and international consequence are

governed by a uniform rule of law. This Court should

reverse the Supreme Court of Colorado’s decision,

taking the opportunity that this case presents to

reaffirm the constitutional limits on state authority

and to prevent an assortment of local judgments from

dismantling the national energy framework.

ARGUMENT

Respondents’ claims in this case arise from the

production and sale of fossil fuels—which have played

a central role in the world’s economies for decades—

and seek to impose liability on fossil-fuel companies

because of their production and sale of this vital

resource. If successful, Respondents’ claims—and

similar claims that have been asserted in a number of

climate-change lawsuits pending across the Nation—

will have a significant, detrimental impact on the

national and global economies, as well as the Nation’s

energy security.

-3-

CLIMATE-CHANGE LAWSUITS WILL LIKELY

SHRINK DOMESTIC FOSSIL-FUEL SUPPLY,

INCREASE

CONSUMER

PRICES,

AND

JEOPARDIZE

U.S.

NATIONAL

ENERGY

SECURITY

State-law claims seeking relief for injuries

allegedly caused by the effects of interstate and

international greenhouse-gas emissions implicate a

uniquely federal interest that is governed by federal

law, not the divergent tort law of the fifty States.

Indeed, this Court’s decision in American Electric

Power, Inc. v. Connecticut, 564 U.S. 410, 421–24

(2011), recognized the special federal character of

greenhouse-gas emissions and the displacement of

federal common law by the Clean Air Act. And the

Second Circuit’s decision in City of New York v.

Chevron Corp., 993 F.3d 81, 98–100 (2d Cir. 2021),

correctly held that displacement does not revive statelaw claims by artful relabeling of emissions injuries

as product, marketing, or upstream claims. The

uniquely federal interest implicated by these statelaw claims is confirmed by the fact that, if successful,

these claims would have a significant, detrimental

impact on domestic fossil-fuel supply, resulting in

increased consumer prices and jeopardizing the

Nation’s energy security.

This case is one of many lawsuits pending

throughout the Nation that seek to impose liability on

certain members of the fossil-fuel industry related to

greenhouse-gas (“GHG”) emissions under various

common law and/or statutory theories of liability.

-4-

Some such suits have alleged that fossil-fuel

producers’ GHG emissions constitute a public

nuisance (see, e.g., City of Oakland v. BP PLC, 969

F.3d 895 (9th Cir. 2020); Delaware v. BP Am. Inc.,

No. N20C-09-097 (Del. Super. Ct.)), while others

allege that fossil-fuel producers’ failure to warn

consumers about the potential harms of GHG

emissions constituted negligence (see, e.g., Minnesota

v. Am. Petroleum Inst., No. 62-CV-20-3837 (Minn.

Dist. Ct.)). But regardless of the specific claims

asserted, each lawsuit seeks to impose liability for the

same alleged harms: an increase in GHG emissions

and alleged resulting harm to the climate.

The City of Boulder, Colorado, for example, seeks

monetary damages for past and expected future costs

allegedly incurred to analyze, evaluate, mitigate, and

abate climate change. See J.A. 1–140. According to

Boulder, the “impacts” of climate change include

virtually every extreme weather event that one could

imagine, ranging from wildfires and droughts to

floods, some of which (the City does not specify) have

caused physical damage to Boulder’s buildings and

roads. See id.

Although the City of Boulder plaintiffs have not

set forth any particular sum that they seek to collect,

a recent study estimates that by 2040, municipalities

in Pennsylvania will spend about $1 billion per year

adapting to the various impacts of climate change. 2

2 Pennsylvania’s Looming Climate Cost Crisis: The Rising

-5-

According to this study, by 2040 the average climatechange adaptation cost per capita in Pennsylvania

municipalities will be $4,930. 3 This does not include

the cost of adapting to wildfire impact, 4 a serious

natural hazard in areas of the West. See J.A. 8, 41, 46.

Rounding up the 2040 Pennsylvania per capita figure

to $5,000, to account at least somewhat for wildfire

adaptation, and multiplying by the current U.S.

population, if all U.S. municipalities, counties, or

states sought to recover for the same costs, the

aggregate annual liability imposed on fossil-fuel

defendants would be $1.675 trillion.

By contrast, according to the U.S. Energy

Information Administration, the total value of

domestic U.S. oil production in 2024 was in the range

of $300 billion. 5 Thus, were such suits allowed to

proceed, the annual liability imposition could reach 5

times the value of aggregate U.S. domestic oil

production. It is therefore not an exaggeration to say

that the climate lawsuits pose an existential threat to

U.S. domestic oil production.

Price to Protect Communities from Extreme Heat, Precipitation,

and Sea Level Rise, Ctr. for Climate Integrity, at 4 (July 2023),

https://perma.cc/CFZ4-V3A5.

3 See id. at 7.

4 See id. at 5.

5 See Naser Ameen, U.S. crude oil production rose by 2% in

2024,

Energy

Info.

Admin.

https://perma.cc/TT54-UL86.

-6-

(Apr.

16,

2025),

A. Retroactive Climate-Change Liability

Will Reduce Domestic Fossil Fuel

Supply and Increase U.S. Retail

Prices.

Even if the climate lawsuits result in aggregate

damages awards that do not exceed the value of U.S.

domestic oil production, the retroactive liability and

damages threatened by these cases are likely to have

a significant, detrimental impact on the national

economy by causing a reduction in domestic fossil fuel

production. Massive retroactive liability is precisely

what the state and local climate lawsuits threaten.

One basis that has been discussed for determining a

particular fossil-fuel company’s share of any liability

is that company’s past production—i.e., its aggregate

emissions over the past several decades. 6

Imposing a scheme of retroactive joint liability via

litigation is functionally equivalent to imposing a fine

for energy companies’ past fossil-fuel production.

Proponents of such fines frequently argue that such

fines will have no impact on oil production and

prices. 7 It is true that, as a matter of basic economics,

Rhode Island v. Chevron Corp., No. PC-2018-4716,

Compl. ¶¶ 96–98 (R.I. Super. Ct. Jul. 2, 2018) (alleging that

emissions “attributable to Defendants” can be calculated “by

quantifying the amount and type of fossil fuels each Defendant

extracted and placed into the stream of commerce,” multiplied

by the fuel’s carbon factor).

6 E.g.,

7 See, e.g., Peter H. Howard and Minhong Xu, Enacting the

“Polluter Pays” Principle: New York’s Climate Change Superfund

-7-

fixed costs—costs that do not vary with output—

typically should not affect future pricing decisions,

because a company cannot change what happened in

the past and is always working to optimize its pricing

decisions in the present. 8 But this standard assertion

is inapt with respect to the sort of massive retroactive

liability that suits such as Boulder’s would likely

impose.

As Professor Johnston has shown in recently

published

peer-reviewed

work,

multi-state

retroactive damages, fines or other monetary awards

relating to fossil-fuel production or corresponding

GHG emissions—whether through statute or

litigation—will likely have two effects: (1) they will

bankrupt many fossil-fuel producers, and (2) they will

cause those producers who remain viable to cut back

drastically on exploration and drilling. 9

To understand the first effect, consider an existing

oil well. The value of that well is determined by the

profits that it will generate in the future, minus the

costs it carries. If retroactive liability is imposed on

Act and Its Impact on Gasoline Prices, N.Y.U. Inst. Pol’y

Integrity, at 1, 7, 13 (Nov. 22, 2022), https://perma.cc/5NUNQHRD.

8 See Gary S. Becker, Economic Theory 79–83 (2d ed. 2007)

(explaining that whether a cost is fixed depends upon the time

horizon relevant to the choice under consideration).

9 Jason S. Johnston, Fossil Fuel Production Under Liability

for Climate Change, 32 Int’l J. Econ. Bus. 411, 413–14, 420–21

(2025).

-8-

the owner of an oil well for alleged harms relating to

GHG emissions, every oil well will, in effect, be

charged for its past production activities. The longer

a well has been in production, the bigger its

accumulated liability cost, and the shorter its

remaining productive lifetime and future value. 10

Because retroactive liability increases while the

present value of future production declines as a well

ages, for every well, retroactive liability will

eventually exceed the value of future production.

Thus, under retroactive liability, every oil and gas

well, even those producing large net positive social

value in every period, eventually becomes a negative

net value asset. In other words, every business that

consists of owning and operating oil or natural gas

wells will eventually face retroactive liability that

exceeds the present value of its assets. Thus,

retroactive liability will eventually cause the firms to

become insolvent. 11 In bankruptcy, retroactive

liability claimants would become the owners of the

firms, cancelling out all existing equity holders. 12

The second effect of retroactive liability will be

delay in drilling and production. Production from an

Id. at 413–16 (explaining that the “oldest, longest

producing fields are the first to become negative net present

value assets due to the imposition of cumulative liability”).

11 Note that it is possible that production from such negative

net value assets would still be economic. This would be true if

the price per barrel exceeds baseline marginal cost plus the

continuing liability charge per barrel. See id. at 412–13, 415–16.

12 Id. at 413, 427.

-9-

oil or gas well is determined by the geology of the field

and the type of well that has been drilled (horizontal

versus conventional). 13 Once an oil or gas well is

drilled, production from that well decreases with

declining well pressure. 14 Supply therefore cannot be

varied up and down simply by incurring the marginal

cost of supply change, as is true in the production of

typical goods. Drilling a new well is a commitment

involving substantial sunk cost, and in deciding when

to drill, producers trade off the benefit of waiting

(potential technological change that reduces the cost

or increases the productivity of drilling 15) against the

cost of waiting (foregone revenue from sales). But

uncertainty about retroactive liability alone reduces

See Norman J. Hyne, Nontechnical Guide to Petroleum

Geology, Exploration, Drilling, and Production, at 423–442 (3d

ed. 2012).

Ryan Kellogg and Mar Reguant, Energy and

environmental markets, industrial organization, and regulation,

5 Handbook of Industrial Organization 615, 626–27 (2021)

(explaining that “the production rate from drilled wells [is]

subject to a capacity constraint that is proportional to the

remaining reserves available to the well” because of declining

well pressure).

15 In the U.S., since 2022, technological advances, such as

electronic hydraulic fracturing technologies, automated drilling

processes, and artificial intelligence, have increased the

productivity of drilling rigs and allowed U.S. production to

increase the number of wells drilled even as the number of

drilling operations (rigs) has decreased. See Merek Roman,

Improved efficiency is enabling record U.S. crude oil production

from fewer rigs, Energy Info. Admin. (Dec. 23, 2024)

https://perma.cc/RC2D-FKJ3.

- 10 -

the incentive to drill new wells, 16 and lowers the

present owner’s expected future net revenue from a

newly drilled well. Since the primary cost of delaying

new drilling is deferring receipt of net revenue from

newly drilled wells, the reduction in expected future

profits due to potential climate-change liability

lowers the cost of waiting to drill and tilts the owner’s

cost-benefit calculus in favor of such delay. Delays in

drilling are equivalent to reductions in future

supply. 17

This effect of uncertainty over potential future

retroactive liability is even greater where future

damages are so high that a loss of ownership is

expected. When the imposition of retroactive liability

is likely to cause insolvency and thus lead to a

transfer of ownership through bankruptcy to various

claimants, present owners’ expected future revenue

fall all the way to zero. With this very real possibility,

the cost of delaying drilling is even lower;

correspondingly, the risk of incurring the sunk cost of

drilling is even higher.

These supply-side impacts of retroactive GHG

liability will surely, among other things, cause a

16 Cf. Ryan Kellogg, The Effect of Uncertainty on Investment:

Evidence from Texas Oil Drilling, 104 Am. Econ. Rev. 1698, 1699

(2014) (finding that “when the expected volatility of the future

price of oil increases, drilling activity decreases”).

17 See Johnston, supra n.9, at 413.

- 11 -

direct increase in fossil-fuel prices and in the overall

rate of consumer price inflation.

This may seem implausible. Some may surmise

that because oil and natural gas are produced and

refined across the world and traded and sold on

international markets, even if retroactive GHG

liability substantially reduced U.S. fossil fuel supply

it would not affect fossil fuel prices paid by U.S.

consumers and firms. This supposition vastly

underestimates the global significance of U.S. fossil

fuel production.

Economists have traditionally described the global

oil market as one in which a dominant cartel, OPEC

(since 2016, OPEC+), led by a dominant low-cost

producer, Saudi Arabia, manipulates production to

control global oil prices. 18 Over the past decade,

however, OPEC+’s ability to control prices has been

weakened by an enormous increase in U.S.

production. The vast majority of the increase in U.S.

oil production since 2015 has come from fracking,

with the share of U.S. oil production from fracking

increasing to account for two-thirds of total U.S. oil

production by 2022. 19 As drilling and fracking

18 See Rolf Golombeck et al., OPEC’s market power: An

empirical dominant firm model for the oil market, 70 Energy

Econ. 98, 111–12 (2018) (finding that “OPEC exerted substantial

market power between 1986 and 2016,” and noting that Saudi

Arabia has increased oil supply to counteract lower production).

19 How much oil is produced in the US?, USA Facts (Aug. 21,

2023), https://perma.cc/3WYJ-WXZB.

- 12 -

technologies have improved, costs have fallen and

U.S. production has soared. 20 That revolution has

made the U.S. a leading producer and even exporter

of oil and liquid natural gas. 21 As shown in Figure 1

below, even before the 1970s, the U.S. was never a

significant exporter of oil. With the advent of fracking,

that changed dramatically, as U.S. oil exports

increased from a mere 1 million barrels exported in

January 2010 to about 121 million barrels in January

2026. 22

20 See W.D. Walls and Xiaoli Zheng, Fracking and Structural

Shifts in Oil Supply, 43 Energy J. 1, 30–31 (2022).

21 See The United States exported 30% of the energy it

produced in 2024, Energy Info. Admin. (Aug. 12, 2025),

https://perma.cc/RYH8-NY43.

22 U.S. Exports of Crude Oil, Energy Info. Admin. (Apr. 30,

2026), https://perma.cc/6USB-QGTT.

- 13 -

Figure 1. U.S. Crude Oil Exports 23

Not only has the fracking boom accounted for a

huge share of the increase in U.S. production, it has

also created a new industry segment that is

enormously responsive to attempts by OPEC+ to raise

global prices. 24 In Texas, for example, oil supply

23 Id.

24 Walls and Zheng, supra n.20, at 31 (explaining that U.S.

oil producers have become more responsive to price increases

since the shale oil boom and the “changed supply relation for

U.S. oil producers . . . is consistent with the ineffectiveness of

OPEC policies to increase and stabilize the world price of crude

oil”).

- 14 -

became more than three times more responsive to

price increases after the fracking boom. 25

When OPEC+ raises prices, U.S. shale producers

quickly drill new wells and raise production, forcing

prices back down. 26 The effect is large, with one recent

study finding that the increase in shale oil production

accompanying the so-called shale revolution will

ultimately lower oil prices by 48 percent once the

shale oil transition is complete. 27 Many Permian

Basin shale oil wells are owned by oil companies who

are defendants in suits such as Boulder’s. 28 By

causing the shutdown of wells owned by these

producers and by the postponement of supply increase

brought about by drilling new wells, the retroactive

liability imposed by climate-change lawsuits such as

Boulder’s would eliminate what has become an

effective market check on OPEC+’s ability to raise oil

prices.

25 Id. at 8–13.

26 See Walls and Zheng, supra n.20, at 31.

27 Nathan S. Balke et al., The Shale Revolution and the

Dynamics of the Oil Market, 134 Econ. J. 2252, 2259 (2024).

See Top Permian Oil and Gas Producers: Five-Year

Production, Rextag (Apr. 29, 2024) (listing ConocoPhillips,

Chevron, Devon Energy, Exxon, and Occidental Petroleum as

top-ten oil and gas producers in the Permian Basin),

https://perma.cc/2Z3Z-MYS2; see, e.g., Delaware v. BP Am. Inc.,

No. N20C-09-097, First Amended Compl., at 1–2 (Del. Super. Ct.

Jul. 28, 2025) (naming Chevron, ConocoPhillips, Exxon Mobil,

Occidental Petroleum, and Devon Energy as defendants).

- 15 -

B. The Impact of Retroactive Liability

for Fossil-Fuel Production on Oil and

Natural Gas Supply and Prices Will

Reverberate Across the U.S. Economy

in Higher Prices for Many Goods and

Services.

Another significant economic consequence of

imposing retroactive liability for GHG emissions and

fossil-fuel production is that prices for many goods

and services will increase substantially.

Oil is essential to interstate and international

transportation. In 2023, transportation alone

contributed $1.8 trillion to the U.S. gross domestic

product (about 6.5 percent). 29 When diesel, aviation

fuel, or oil prices increase, those price increases ripple

across the entire economy. 30 Recent work finds that

gasoline price shocks in particular explain 54 percent

of headline CPI inflation. 31

Transportation Economic Trends: Contribution of

Transportation Services to the Economy and the Transportation

Satellite Accounts, U.S. Dep’t of Transp., Bureau Transp. Stat.,

https://perma.cc/3AGF-MHRT.

30 Kangni R. Kpodar and Boya Liu, The Distributional

Implications of the Impact of Fuel Price Increases on Inflation,

Int’l Monetary Fund, at 13–16 (Nov. 12, 2021) (estimating the

pass-through of fuel price increases to consumer price inflation),

https://perma.cc/4T45-9JDD.

31 Lutz Kilian and Xiaoqing Zhou, A broader perspective on

the inflationary effects of energy price shocks, 125 Energy

Economics, at 5–6 (Sept. 2023).

- 16 -

Likewise, fossil fuels are estimated to provide 93

percent of the energy used in the American food

system, 32 both directly—as fuel for the machinery

used in crop planting, harvesting, and irrigation—

and indirectly—by providing the source of energy for

the production of fertilizers, pesticides, and

herbicides. Oil prices and agricultural commodity

prices are closely related in the medium- to longrun. 33

The process of refining crude oil also generates a

number of petrochemical feedstocks such as naphtha

(from crude oil) and ethane (from natural gas) that

are processed into a large variety of products, 34

including

plastics

(such

polyethylene,

polypropylene, and polystyrene plastics used in

bottles, bags, containers, toys, water pipes,

packaging, etc.); nylon and polyester fibers for

clothing, carpets, and upholstery; acrylic resins for

32 Patrick Canning et al., The Role of Fossil Fuels in the U.S.

Food System and the American Diet, U.S.D.A., at 8–12, 21 (Jan.

2017), https://perma.cc/CUV7-YRQ4.

33 While short-term price movements for agricultural

commodities can be explained primarily by short-run shifts in

supply and demand caused by factors such as growing-season

weather, oil prices and agricultural-commodity prices are closely

linked over longer periods. See Kevin M. Camp, The relationship

between crude oil prices and export prices of major agricultural

commodities, U.S. Bureau of Labor Statistics (April 2019),

https://perma.cc/FZ28-NX6D.

34 See, e.g., Kalen Goodluck, 10 Everyday Products Derived

from

Petroleum,

PBS

https://perma.cc/944M-P82H.

SoCal

- 17 -

(Apr.

27,

2019),

dentures and various medical products; medical

plastics used in things such as syringes, tubing, and

bottles; resins used in drug production; and other

derivatives used in food preservatives and flavor

additives (such as vanillin, benzaldehyde, and

paraffin wax for coating candy and fruits), cosmetics

and fragrances (lipsticks, perfumes, makeup,

aftershaves, and shampoos often containing paraffin

wax and other derivatives), detergents, adhesives,

rubbers, dyes, and paints. 35 As illustrated once again

by market changes since 2022, an abrupt decrease in

fossil-fuel supply causes not only an increase in fossilfuel prices but also an increase in the general price

level. 36

Perhaps the most dangerous consequence of

reductions in fossil fuel supply caused by retroactive

liability is the impact of supply disruption on the cost

and reliability of electricity. It is impossible to

incorporate large amounts of electricity from wind

and solar and still retain the reliability of electricity

supply without heavy reliance on natural gas. 37

Across the globe, every jurisdiction that has become

heavily reliant on wind and solar as sources of energy

for electric power—from California to Germany—has

35 See id.

36 Harun Alp et al., Second-Round Effects of Oil Prices on

Inflation in the Advanced Foreign Economies, Bd. Governors

Fed. Rsrv. Sys. (Dec. 15, 2023), https://perma.cc/63MH-YATU.

37 See, e.g., Natural Gas: The Backbone of Reliable Power,

Nw. Gas Ass’n (Apr. 9, 2025), https://perma.cc/K83V-TN2A.

- 18 -

also become completely reliant upon natural gas to

provide power when the wind doesn’t blow and the

sun doesn’t shine. 38 Natural gas supply restrictions

will threaten the reliability of electricity supply in

such places, and natural gas price increases will be

passed on directly to electric utility customers.

In the aftermath of Congressional investigations

into several catastrophic electric grid blackouts

during the 1960s, the large investor-owned U.S.

electric utilities created the North American Electric

Reliability Corporation. 39 Today, the regional

reliability councils created by this corporation ensure

the reliability of the regionally interconnected U.S.

electricity production and distribution system. 40 No

single state or city could do this job. If allowed to

impose retroactive liability on the U.S. fossil-fuel

industry, individual states and cities would likely

severely harm or even destroy the existing interstate

system for U.S. electricity production and

transmission, as well as other interstate U.S.

industries.

38 See Jason S. Johnston, Climate Rationality: From Bias to

Balance 149–85 (2021).

39 Id. at 154–55.

40 Id. at 155.

- 19 -

C. Retroactive

GHG

Liability

Will

Significantly Reduce U.S. Energy

Security, Making the U.S. Dependent

on Foreign Fossil-Fuel Supply and

Wiping

out

America’s

Energy

Independence.

Imposing retroactive liability on businesses for

GHG emissions and fossil-fuel production will also

make the United States more dependent on foreign

fossil fuel, jeopardizing the Nation’s energy

independence.

State GHG regulations that are applied solely to

in-state activities, such as retail gasoline taxes and

the regulation of in-state production and refining,

affect supply and prices within the state. Unlike

federal gas taxes, which are borne roughly equally by

consumers (who pay a higher price at the pump) and

wholesalers (who get a lower wholesale price), state

gasoline taxes are borne by in-state consumers, in the

form of higher retail prices. 41

The same is true of state command-and-control

regulation. With the explicit goal of ending oil

extraction in California, that state has promulgated

regulations that impose large lump sum costs. 42 One

41 See Hayley Chouinard and Jeffrey M. Perloff, Incidence of

federal and state gasoline taxes, 83 Econ. Letters 55 (2004).

42 See California Further Restricts Oil Production with Three

New

Bills,

Inst.

Energy

https://perma.cc/MH28-UEZW.

- 20 -

Rsch.

(Oct.

2024),

California law, Cal. Pub. Res. Code § 25354.4,

empowers the State Energy Resources Conservation

and Development Commission to require refiners to

maintain minimum inventories of refined fuels.

Another California law, the California Global

Warming Solutions Act of 2006, 43 empowers the State

Air Resources Board to create a Low Carbon Fuel

Standard (“LCFS”), 44 which then forces refineries to

blend fuels and to buy credits if carbon targets are not

met. See Rocky Mt. Farmers Union v. Corey, 730 F.3d

1070, 1080 (9th Cir. 2013) (explaining that the LCFS

“established a declining annual cap on the average

carbon intensity of California’s transportation-fuel

market” and that “[c]redits may be used to offset

deficits” in “carbon intensity”).

These laws are costly and have already caused

reduction of fossil fuel production and refining in

California. The cost of complying with California’s

regulations was among the reasons for the closure of

refineries in California—closures reducing that

state’s refining capacity by 17.5 percent. 45

43 Cal. Health & Safety Code, §§ 38500, et seq.

44 Cal. Code Regs. tit. 17, §§ 95480, et seq.

45 Josh Delfosse, How to Navigate the Impact of Closing Oil

Refineries in California, Breakthrough (Oct. 28, 2025),

https://perma.cc/5J4S-M5XE; Nicole Jao, Valero to shut Benicia

refinery due to tough regulatory environment, high costs, Reuters

(Apr. 24, 2025) (quoting Valero CEO’s statement about

California’s policies “to move away from fossil fuels” and its

- 21 -

Despite passing so many laws imposing costs on

the fossil fuel industry, California still consumes

between 850,000 and 900,000 barrels of gasoline per

day, and it imports between 20 and 40 percent of all

its gasoline, diesel, and jet fuel. 46 California produces

very little oil in-state, with total production falling

over the last forty years from about 1 million barrels

per day to only 250,000 barrels per day. 47 With

vanishing refining capacity and very little in-state

production but continuing heavy consumption,

California imports the vast majority of its crude oil

from outside the U.S., with Iraq as its single biggest

supplier as of 2024. 48 Indeed, while only thirty years

ago, California imported only 10 percent of its crude

oil, since 2023, California has imported more than 60

percent of its oil from abroad. 49 As refiners have

closed, California has become increasingly reliant on

foreign refineries for its refined crude oil products.

For example, in November 2025, OPIS reported that

“over the last two years,” India—whose refineries

process mostly Russian crude oil—supplied 6.56

“stringent

and

difficult”

https://perma.cc/AER4-BKM4.

regulatory

environment),

46 Erick Parel, California is within weeks of a shutdown,

Energy News Beat (Apr. 23, 2026), https://perma.cc/A453-5A5R.

California Field Production of Crude Oil, Energy Info.

Admin. (Apr. 30, 2026), https://perma.cc/Q395-4KJD.

48 Philip MacFarlane, Viewpoint: California Must Consider

Emissions from Foreign Oil, California Energy J. (Oct. 22, 2025),

https://perma.cc/H7C3-YHUR.

49 Id.

- 22 -

million barrels of gasoline to California. 50 Because

there are no U.S. pipelines that bring gasoline to

California, California gets its gasoline from foreign

countries. 51

California has thus pursued policies that have

made it completely dependent upon imported fossil

fuels and subject to the vicissitudes of international

fossil fuel markets. The danger of this dependence has

been made all too clear by the Iran war. With the

closure of the Strait of Hormuz, California’s short-run

refined oil product supply is limited to that from

refineries located primarily in South Korea,

Singapore, India, and Japan.

As California teeters insecurely on the brink of

energy shortages, the U.S. economy as a whole is

highly energy secure. Since 2018, not only has the

U.S. produced more crude oil than any other country

in the world, but in reaching a national capacity of 13

million barrels per day in 2023, it achieved a

production capacity that exceeds even that of Saudi

Arabia. 52 Aside from a drop during COVID-era

50 Shaheer Naveed and Eric Weiser, As Reliance on Imported

Gasoline Rises, California Adapts to a ‘New World’, OPIS (Nov.

4, 2025), https://perma.cc/ELH9-J4KM.

51 Capital & Main, As prices climb, California imports more

gasoline made from Russian oil, Daily Kos (Apr. 22, 2026),

https://perma.cc/V4JG-BLNT.

52 Erik Kreil, United States produces more crude oil than any

country, ever, Energy Info.

https://perma.cc/L7UT-TWHX.

Admin.

- 23 -

(Mar.

11,

2024)

economic dislocations, U.S. crude oil production has

generally steadily increased since 2013, and in 2025

set a new annual production record of 13.6 million

barrels per day. 53 Since beginning to export liquified

natural gas (LNG) in 2016, the U.S. has risen to

become the world’s leading producer and exporter of

LNG, exporting to 48 countries around the world,

with Europe the leading importing region. 54 The U.S.

exported about 12 billion cubic feet per day (Bcf/d) of

LNG in 2024, and according to the Department of

Energy, U.S. LNG exports will more than double, to

26 Bcf/d by the end of this decade. 55 As a result, the

Nation’s LNG export capacity “is expected to . . .

exceed the export capacity of the second largest LNG

exporter, Qatar, by 40 percent.” 56

The state climate lawsuits are part of a concerted

effort to reverse this remarkable transformation in

American fossil-fuel production. The goals and

strategies of this type of group effort were set out at a

“Workshop on Climate Accountability” held in

53 Naser Ameen, U.S. crude oil production rose in 2025,

setting new record, Energy Info. Admin. (Mar. 31, 2026),

https://perma.cc/AMF5-UGHA.

U.S. Liquefied Natural Gas (LNG) Exports Fact Sheet,

U.S. Dep’t of Energy (Mar. 2025), https://perma.cc/6YJ7-HFHW.

55 Id.

56 Id.

- 24 -

California in 2012. 57 According to the Report on that

workshop, the model for litigation against the fossil

fuel industry was earlier litigation against tobacco

companies. 58 Workshop participants reached “nearly

unanimous agreement on the importance of legal

actions” to, among other things, “maintain[] pressure

on the industry that could eventually lead to its

support for legislative and regulatory responses to

global warming.” 59 As one workshop participant

explained, “[e]ven if your ultimate goal might be to

shut down a company, you still might be wise to start

out by asking for compensation . . . .” 60

To be sure, public statements by state and

municipal plaintiffs do not explicitly say that

bankrupting or shutting down fossil fuel companies is

the goal of climate suits, but publicly stated objectives

make clear that ending the defendants’ fossil fuel

production is the end goal. For example, California

Governor Gavin Newsom’s office has put out

statements that, by making oil companies pay for “the

costs of their impacts,” California seeks to “protect the

state against the harms that climate change will

cause in years to come,” to “[p]rohibit oil companies

57 See Climate Accountability Institute and Union of

Concerned Scientists, Establishing accountability for climate

change damages: Lessons from Tobacco Control (June 14, 2012),

https://perma.cc/7F59-UHF5.

58 See id. at 7–10.

59 Id. at 27.

60 Id. at 13 (internal quotation marks omitted).

- 25 -

from engaging in further pollution,” and to “[l]evy

financial penalties on Big Oil . . . .” 61 Since carbon

dioxide is an inevitable by-product of oil production

and refining, the only way to “prohibit” what

California calls “pollution” is to end the defendants’

business activities. 62

As explained earlier, the magnitude of potential

liability in state climate lawsuits is easily large

enough to push fossil-fuel company defendants into

insolvency. Through bankruptcy proceedings, tort

claimants would gain control of such companies. They

could then exercise their control rights to either shut

down such firms or use firm revenues to fund

whatever public projects they wish. See supra pp. 8–

11.

However, ending fossil fuel production and

refining by major American firms could have

catastrophic national consequences. About 20 percent

of global oil and 15 percent of liquified natural gas

passes through the Strait of Hormuz. 63 Its closure

during the Iran war is generally believed to have

effectively eliminated all LNG supply through the

61 Governor Gavin Newsom, People of the State of California

v. Big Oil (Sept. 16, 2023), https://perma.cc/ZQ4U-4UPU.

62 See id.

63 Ayana Isles, Why the Strait of Hormuz Is More Than an

Energy Crisis, Georgia Tech News Center (Apr. 3, 2026),

https://perma.cc/LME4-RQV9; Five key impacts of LNG supply

disruption via Hormuz, Timera Energy (Mar. 2, 2026),

https://perma.cc/7XJ8-USPP.

- 26 -

Strait. 64 The reduction of LNG global supply had

significant effects, causing increases in prices

globally 65 and economic dislocation.

For example, Southeast Asia was forced to ration

scarce energy, with the Philippines imposing a fourday work week for certain government units and

ordering that air conditioners be set at no lower than

24 degrees Celsius (approximately 75 degrees

Fahrenheit) for government offices, 66 and Thailand

banning fuel exports to conserve its reserves. 67 India,

the second-largest LNG importer, cushioned the blow

caused by LNG shortages to households, but LNG

shortages were already affecting restaurants and

hotels there. 68 In lower-income African countries,

where “food accounts for about 36 per cent of

consumption on average,” the impact was severe. 69

64 See Five key impacts of LNG supply disruption via

Hormuz, supra n.63.

65 Id.

66 Office of the President of the Philippines, President Marcos

orders temporary 4-day workweek in some gov’t agencies (Mar. 6,

2026), https://perma.cc/6NQS-2H3Q.

67 Jonathan Yee, Thailand bans fuel exports amid Mideast

crisis, ICIS (Mar. 4, 2026), https://perma.cc/43GV-A5JM.

68 Anton L. Delgado and Aniruddha Ghosal, Iran war pushes

countries into energy triage as they conserve power and curb

soaring prices, Associated Press (Mar. 17, 2026),

https://perma.cc/BKN2-R5QQ.

Mohamed K. Omer, Iran War Exposes Africa’s

Vulnerability to Global Energy Shocks, The Pan African Review

(Apr. 17, 2026), https://perma.cc/GM5X-AW5B.

- 27 -

Transportation costs in Africa make up a high

fraction of food costs, so when fuel prices increase

transportation

costs,

food

prices

disproportionately.

With very limited refining

capacity, higher prices and shortages due to the Iran

war hit East Africa especially hard. 71 Ethiopia’s

Prime Minister Abiy Ahmed “advised citizens to use

fuel sparingly and prioriti[z]e it for essential

purposes,” and the government instructed all public

and state-owned enterprises to place non-essential

employees on annual leave “in an attempt to mitigate

the fuel shortage suffocating transportation across

the country.” 72

The Iran war has driven these energy-insecure

countries back to the days of the 1970s energy crisis.

In the United States, by contrast, while increases in

the forward price of oil have increased gasoline prices

at the pump, there are no physical shortages, and

thus no need to ration or limit energy use. And

natural gas for electricity production remains so

abundant that natural gas prices have fallen to rockbottom levels. 73 Were the climate-change lawsuits to

70 See id. (noting that more expensive “fuel makes shipping,

generating electricity, driving tractors and powering factories

more expensive”).

71 See id.

72 Id.

73 In the Permian Basin, because more gas is being produced

than can be transported through existing pipelines, the WAHA

hub Midland area spot price reached a low of minus $9.52 per

- 28 -

achieve their ultimate aim, the U.S. could be put in

the position of countries who are completely

dependent upon imported oil and natural gas.

II.

CLIMATE-CHANGE LAWSUITS WILL INCREASE

THE SOCIAL COST OF CLIMATE CHANGE,

FURTHER BURDENING THE NATIONAL AND

GLOBAL ECONOMIES

Boulder maintains it is not regulating the

emissions of out-of-state fossil fuel production and

refining but is instead only seeking compensation for

the in-state harms caused by climate change. J.A.

139. But ex post damages inevitably have a

significant, prospective effect in regulating future

conduct. The attempt by Boulder and similar state

and local governments to hold defendants liable for

the costs of global climate change is inherently an

attempt to change how defendants operate.

Perversely, in punishing defendant fossil-fuel

producers and refiners, state and local climatechange lawsuits will quite directly harm the

defendant companies’ employees and shareholders, as

million British thermal units (MMBtu) on April 16, 2026. See

John Abeln, New Low Reached for Permian Natural Gas Prices,

RBN Energy LLC (Apr. 16, 2026), https://perma.cc/Y2FR-S68D.

The Henry Hub one-month forward price for US natural gas

entered April at around $3/MMBtu, and is predicted to average

less than $4 for all of 2026. See US Natural Gas Prices in 2026:

Henry Hub Outlook, LNG Export Boom, and What It Means for

Global

Markets,

EnergyPrices.Net

(Apr.

2026),

https://perma.cc/APX8-ZW3U.

- 29 -

well as the consumers of fossil-fuel-based

products 74—many of whom reside outside the

plaintiff states and municipalities. The lawsuits

would force non-residents of plaintiff jurisdictions to

fund all sorts of public projects undertaken by those

jurisdictions. They thus are inimical to the system of

democratic federalism enshrined in the Constitution

of the United States.

Not only are cities such as Boulder attempting to

foist the cost of public projects on non-voting nonresidents, but their lawsuits also ignore their own

contribution to whatever costs they may incur due to

changing climate. 75 Fossil-fuel companies produce

and refine only to meet market demand. They do not

design or produce the autos and other internalcombustion-fired products that burn fossil fuels. They

74 Recent work has shown that between 25 and 75 percent of

an increase in firm energy costs are passed through in the form

of higher prices to consumers, with firms (which include

shareholders and employees) bearing the remainder. See Sharat

Ganapati et al., Energy Cost Pass-Through in US

Manufacturing: Estimates and Implications for Carbon Taxes,

12 Am. Econ. J.: Applied Econ. 303 (2020).

According to the Australian Institute for Disaster

Resilience, local government land-use planning that considers

natural hazards, including decisions such as prohibiting

development in known hazard areas and preserving open space,

is the “single most important mitigation measure” for

minimizing future disaster losses due to weather events. See

Land Use Planning for Disaster Resilient Communities, Austl.

Inst. Disaster Resilience, Dep’t of Home Aff., at vii (1st ed. 2020),

https://perma.cc/K74T-56VG.

- 30 -

do not make decisions about how to generate

electricity. They have nothing to do with construction

and design decisions that determine cities’

vulnerability to weather events. Climate-change

lawsuits essentially exclude every entity responsible

for determining the demand for fossil fuels and the

costs of any climate change attributable to GHG

emissions.

In addition, the climate-change lawsuits exclude

most past and present fossil-fuel producers—

specifically, OPEC+ members. In fact, the major

OPEC+ fossil-fuel producers are state-owned, with

very few exceptions. 76 If successful, climate-change

lawsuits will cut or eliminate OPEC+’s competition,

likely increasing output by fossil-fuel producers in

OPEC+. 77 In this way, climate-change lawsuits will

likely boost the economies of OPEC+ members such

as Russia, Iran, and Venezuela. Few OPEC+

countries have GHG reduction policies with teeth. 78

Thus shifting production from the firms targeted by

climate-change litigation to OPEC+ producers may

well generate a net increase in global GHG emissions,

See Abigail Gerry, Inside the Oil Alliance: OPEC vs.

OPEC+,

Mansfield

Energy

(Apr.

14,

2025),

https://perma.cc/WJB8-NYNX.

77 See Johnston, supra n.9, at 422–24.

78 See A. Damodaran and Shamta Thakkar, A Preliminary

Survey of the Climate Policy of OPEC and OPEC+ Countries Discussion Paper (Dec. 10, 2020), https://perma.cc/S9L9-VR23.

- 31 -

a well-known

leakage.” 79

phenomenon

called

“emissions

Defenders of climate-change litigation may argue

that what matters is ensuring that the costs of

adapting to changing climate are borne by some

responsible entity, and that even if many such

responsible entities carry no share of the burden,

what matters is funding climate adaptation by

whatever means necessary. Beyond the fundamental

unfairness of such an argument, the argument

ignores the destructive incentives created by these

lawsuits’ liability-sharing scheme. From an economic

point of view, optimal climate adaptation occurs when

the actor that benefits from adaptation internalizes

the costs of adaptation. If the actor choosing

adaptation expenditures bears only a fraction of the

costs, and is compensated for damages it has incurred

because it has failed to optimally adapt, then it will

not have the correct economic incentive and may

either spend too little 80 or too wastefully on

79 For a succinct but accurate definition, see Emissions

Leakage,

Sustainability