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

No. 25-170

IN THE

Supreme Court of the United States

SUNCOR ENERGY (U.S.A.) INC., et al.,

Petitioners,

v.

COUNTY COMMISSIONERS OF BOULDER COUNTY, et al.,

Respondents.

________________________________________________

On Writ of Certiorari

to the Supreme Court of Colorado

________________________________________________

BRIEF OF CLIMATE ECONOMISTS

AS AMICI CURIAE IN SUPPORT OF RESPONDENTS

________________________________________________

CELESTE KMIOTEK

NICHOLAS RENZLER

Counsel of Record

GEESU LEE

FOLEY HOAG LLP

1301 Avenue of the Americas

New York, NY 10019

(212) 812-0400

nrenzler@foleyhoag.com

Counsel for Amici Curiae

i

TABLE OF CONTENTS

INTEREST OF AMICI CURIAE ................................ 1

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

ARGUMENT ............................................................... 4

A. EXTERNALITIES ARE A WELL-RECOGNIZED SOURCE OF MARKET INEFFICIENCY, AND LIABILITY FOR DAMAGES

IS A LONGSTANDING INSTRUMENT FOR

CORRECTING THEM ...................................4

B. CLIMATE CHANGE IS A WELL-DOCUMENTED EXAMPLE OF AN UNPRICED

EXTERNALITY .............................................7

C. INTERNALIZING THE CLIMATE EXTERNALITY WOULD NOT DESTABILIZE THE

UNITED STATES ECONOMY ................... 11

1.

Oil and Gas Companies Support Other

Efforts to Internalize the Social Cost

of Carbon, Indicating Those Efforts

Are Economically Viable .................. 12

2.

Oil and Gas Companies’ Policies Anticipate Internalized Costs, Indicating

They Are Prepared for Internalized

Costs ................................................. 15

3.

Liability Amounts Will Not Be Sufficiently Large to Negatively Affect the

U.S. Economy, Whereas Unabated

ii

Climate Change Would Have a Notable Negative Impact ......................... 17

CONCLUSION .......................................................... 24

iii

TABLE OF AUTHORITIES

Page(s)

Cases

People v. Exxon Mobil Corp., 119 N.Y.S.3d

829, 2019 NY Slip Op 51990(U) (N.Y.

Sup. Ct. 2019) .................................................... 15

Other Materials

A. C. Pigou, The Economics of Welfare

(1920) ................................................................... 4

Chris Lane & Amanda Glassman, Corrective Taxes to Save Lives, Ctr. for Global

Dev. (Nov. 17, 2021) ............................................ 6

Cong. Budget Off., Effects of a Carbon Tax

on the Economy and the Environment

(2013) ................................................................. 20

Daniel P. Kessler, The Economic Effects of

the Liability System, Hoover Inst., (June

1, 1999) ................................................................ 7

Ellen Chang & James Stock, The Future of

Carbon Pricing in the U.S., Harv. Bus.

Sch. Inst. for Bus. in Glob. Soc’y (Dec.

10, 2024) ............................................................ 12

Environmental Protection Agency, EPA Announces Action to Address Costly

Obama, Biden “Climate” Measurements

(Social Cost of Carbon) (Mar. 12, 2025) ............. 9

iv

Environmental Protection Agency, Report

on the Social Cost of Greenhouse Gases:

Estimates Incorporating Recent Scientific Advances (2023) ................................. 3, 8, 10

Exec. Order No. 14154, Unleashing American Energy, 90 Fed. Reg. 8353 (Jan. 29,

2025) .................................................................... 9

Frances C. Moore, et al., Synthesis of evidence yields high social cost of carbon

due to structural model variation and

uncertainties, Proceedings of the National Academy of Sciences (2024) ................... 10

Guido Calabresi, The Costs of Accidents

(1970) ................................................................... 6

Howard Shelanski, Refining Estimates of

the Social Cost of Carbon, White House

(Nov. 1, 2013) ...................................................... 9

J.-J. Laffont, Externalities in Allocation, Information and Markets (John Eatwell,

Murray Milgate & Peter Newman, eds.,

Palgrave Macmillan, 1989) ................................. 5

James R. McFarland, et al., Overview of the

EMF 32 Study on U.S. Carbon Tax Scenarios, 9 Climate Change Economics

1840002 (2018) ............................................ 20, 21

v

Kimberly A. Clausing, Janice C. Eberly, Samantha Gross, Jón Steinsson & Catherine Wolfram, How Much Is Climate

Change Costing U.S. Households?,

Brookings (Oct. 23, 2025) ................................... 8

NOAA Nat’l Ctrs. for Env’t Info., U.S. Billion-Dollar Weather and Climate Disasters (2025) ............................................................ 8

Robert A. Becker, Fundamental Theorems

of Welfare Economics in Infinite Dimensional Commodity Spaces in Equilibrium

Theory in Infinite Dimensional Spaces

(M. Ali Khan & Nicholas C. Yannelis,

eds., 1991)............................................................ 5

Ronald Coase, The Problem of Social Cost, 3

J.L. & Econ. 1 (1960)........................................... 6

Susan Crawford & Daevan Mangalmurti,

Managing Climate Risk: Implications for

Local Governments, Carnegie Endowment for Int’l Peace (Aug. 20, 2025) ................... 8

William Nordhaus & Lint Barrage, Policies,

Projections, and the Social Cost of Carbon: Results from the DICE-2023 Model,

121 Proc. Nat’l Acad. Sci. U.S.A.

e2312030121 (2024) .............................. 19, 20, 22

1

INTEREST OF AMICI CURIAE1

Amici curiae are Lawrence H. Goulder,

Shuzo Nishihara Professor in Environmental and Resource Economics (Emeritus) at Stanford University;

Vijayendra Rao, Roberta Buffett Distinguished

Scholar-Practitioner in Residence at Northwestern

University; and Gernot Wagner, climate economist

at Columbia Business School and faculty director of

its Climate Knowledge Initiative.

Amici are economists whose research addresses

environmental economics, climate policy, and economic development. They have published extensively

on the theory of externalities, the design and evaluation of policy instruments to address the impacts of

externalities, and the economics of institutions and

public action.

Amici submit this brief in support of Respondents to address the discrete economic premise advanced by Petitioners and other amici that allowing

damages liability in this setting would impose destabilizing costs on the energy sector and the national

economy. Amici’s interest is to ensure that the Court’s

consideration of that premise proceeds from an

1 Pursuant to Supreme Court Rule 37.6, amici curiae state that

no counsel for any party authored this brief in whole or in part,

and that no entity or person other than amici curiae or their

counsel made any monetary contribution toward the preparation

and submission of this brief.

2

accurate understanding of the economic concepts the

parties and other amici invoke. The legal questions

before the Court—whether federal law precludes Respondents’ state-law claims, and whether this Court

possesses statutory and Article III jurisdiction—turn

on materials outside amici’s professional expertise.

This brief instead provides foundational economic information relevant to the arguments advanced in the

case: the nature of externalities, the role of tort liability among the instruments used to address them, the

status of climate change as an unpriced externality,

and the economic costs of internalizing it.

SUMMARY OF ARGUMENT

Externalities arise when some or all of the costs

of an activity fall on parties outside the transactions

that generate it. They are a well-established source of

market inefficiency, recognized in economics for over

a century. When neither producers nor consumers

bear the full social cost of a product, the resulting externalities and their associated harms exceed the economically efficient level. Economists have long identified a standard toolkit for correcting this failure, including corrective taxes, tradable permits, regulation,

and liability for damages. Tort law predates the formal economic identification of the concept of externalities and remains one of the oldest instruments

through which legal systems require those who cause

harm to bear its cost.

Climate change is a well-documented example

of an externality not fully borne by the producers and

3

consumers who contribute to it. Anthropogenic greenhouse gases in the atmosphere impose costs, through

effects on health, agriculture, property, and infrastructure, that are borne globally and across generations. The federal government’s most recent comprehensive assessment, conducted by the Environmental

Protection Agency in 2023 under procedures recommended by the National Academies of Sciences, Engineering, and Medicine, estimated this cost at $120 (at

a near-term market interest rate of 2.5 percent) to

$340 (1.5 percent) per metric ton of carbon dioxide released in 2020. Environmental Protection Agency, Report on the Social Cost of Greenhouse Gases: Estimates

Incorporating Recent Scientific Advances 2, 4 (2023).2

Today, the vast majority of climate change-causing activities in the United States are not priced to reflect

these costs.

Finally, the economic evidence does not support

the claim that internalizing the climate externality

through damages liability would destabilize the

American economy. That conclusion follows from

three related points. Oil and gas companies support

measures that would internalize costs, and they have

adopted policies that anticipate such measures in the

future. Because compensatory damages are necessarily limited to responding only to measurable and

provable harms, they are minimal relative to the revenues of the Petitioners and to national output. And

Available

at:

https://www.epa.gov/system/files/documents/2023-12/epa_scghg_2023_report_final.pdf.

2

4

perhaps most crucially, in the limiting case in which

every jurisdiction required producers to bear the full

social cost of carbon, the peer-reviewed modeling literature finds aggregate effects on economic output

that are modest: reductions in the growth rate measured in fractions of a percentage point, within an economy that continues to grow substantially in every

modeled scenario. This stands in contrast to the economic effects of unabated climate change itself, which

models show would have a negative impact.

ARGUMENT

A. EXTERNALITIES ARE A WELL-RECOGNIZED SOURCE OF MARKET INEFFICIENCY, AND LIABILITY FOR

DAMAGES IS A LONGSTANDING INSTRUMENT

FOR

CORRECTING

THEM

An externality is a cost or benefit of an activity

that falls on parties who are not participants in the

transactions generating that activity. The concept is

among the oldest and least controversial in economics.

Arthur Pigou formalized it more than a century ago,

observing that when private and social costs diverge,

market prices transmit inaccurate signals and resources are misallocated. A. C. Pigou, The Economics

of Welfare (1920).3 A factory that emits smoke without

bearing the cost of soiled laundry and impaired health

in the surrounding neighborhood will produce more

Available at: https://oll.libertyfund.org/titles/pigou-the-economics-of-welfare.

3

5

smoke, and more of the underlying product, than an

accounting of all costs would justify.

It is well-settled that externalities cause market inefficiencies. The First Fundamental Theorem of

Welfare Economics, which states that competitive

markets allocate resources efficiently, expressly assumes the absence of externalities. See, e.g., Robert A.

Becker, Fundamental Theorems of Welfare Economics

in Infinite Dimensional Commodity Spaces in Equilibrium Theory in Infinite Dimensional Spaces 124 (M.

Ali Khan & Nicholas C. Yannelis, eds., Springer-Verlag Berlin Heidelberg GmbH, 1991)4; J.-J. Laffont, Externalities in Allocation, Information and Markets 112

(John Eatwell, Murray Milgate & Peter Newman,

eds., Palgrave Macmillan, 1989).5 When that assumption fails, markets fail with it, and there is no presumption that the resulting allocation of resources is

efficient. This is a statement about the logic of markets rather than a policy preference; it is taught in

every introductory economics course and disputed by

no serious school of economic thought.

The same basic economic logic underlies the

principal instruments economists recognize for restoring the alignment between private and social costs.

Each shifts costs back to producers and consumers,

thereby reducing the burden associated with

4 Available

at: https://link.springer.com/chapter/10.1007/978-3662-07071-0_5.

5 Available at: https://link.springer.com/chapter/10.1007/978-1349-20215-7_11.

6

externalities that third parties would otherwise bear.

Corrective taxes set a per-unit charge equal to marginal external damage, raising the internal price of

the harmful activity and discouraging overproduction.

Chris Lane and Amanda Glassman, Corrective Taxes

to Save Lives, Center for Global Development, Nov.

17, 2021, https://www.cgdev.org/blog/corrective-taxessave-lives. Cap-and-trade systems fix the aggregate

quantity of the harmful activity, such as emissions,

and let markets set the price for allowances within

that cap. How cap and trade works, Environmental

Defense Fund, Jan. 22, 2020, https://www.edf.org/climate/how-cap-and-trade-works. This limits total externalities through the cap while encouraging efficient allocation of abatement among producers. Command-and-control regulation prescribes technologies

or performance standards, requiring producers to invest in reduction of externalities and thereby raising

internal costs. Command-and-Control Regulation in

Principles of Economics (Rice University, 2016),

https://pressbooks-dev.oer.hawaii.edu/principlesofeconomics/chapter/12-2-command-and-controlregulation/. Tort liability follows the same logic. It requires those who cause harm to compensate those who

suffer it; as Judge Guido Calabresi’s foundational

work recognized, tort liability can best be understood

as a mechanism for placing the costs of harmful activity on the parties best positioned to weigh those costs

against the benefits of the activity. Guido Calabresi,

The Costs of Accidents (1970); see also Ronald Coase,

The Problem of Social Cost, 3 J.L. & Econ. 1 (1960).

7

Tort liability is therefore not an economic outlier. Economists recognize that the expectation of tort

liability operates as a cost for a producer whose activity creates an externality. Daniel P. Kessler, The Economic Effects of the Liability System, Hoover Institution, June 1, 1999, https://www.hoover.org/research/economic-effects-liability-system. A producer

facing the prospect of a damages award equal to the

harm its activity causes will incorporate that expected

liability into its costs the same way it incorporates the

price of labor or raw materials. Legal systems have

long relied on liability to achieve this effect. See William Aldred’s Case, 9 Co. Rep. 57b, 77 Eng. Rep. 816

(K.B. 1611) (holding that odors from a neighbor’s pigsty constituted an actionable nuisance). Nuisance,

trespass, and related doctrines have for centuries performed the function that economists later described

analytically: requiring polluters, in appropriate circumstances, to bear costs they would otherwise impose on neighbors. Which institutions may deploy this

instrument, and under what circumstances, are policy

and legal questions on which amici take no position.

B. CLIMATE CHANGE IS A WELL-DOCUMENTED EXAMPLE OF AN UNPRICED EXTERNALITY

Impacts from greenhouse gas emissions fit the

textbook definition of an externality. Carbon dioxide

mixes uniformly in the atmosphere, so effects from local activities are spread across the globe and persist

for centuries. See, e.g., Understanding the basics of

8

carbon dioxide, NOAA Research, June 28, 2024.6 Producers capture the full benefits of the activities that

generate these effects while bearing only a vanishing

fraction of their costs. Those costs are extensively documented in the scientific and economic literature:

heat-related mortality and morbidity, reduced agricultural yields, sea-level rise and coastal damage, increased wildfire and extreme-weather losses, and expenditures on adaptation by households and governments. Environmental Protection Agency, Report on

the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances 52, 87 (2023).

Monetarily, these externalities are reflected in increased consumer prices, costs of government responses to climate disasters, costs of local governmental initiatives to address the effects, and projected

losses to local economies. See, e.g., Kimberly A.

Clausing, et al., How much is climate change costing

US households? Brookings, Oct. 23, 2025; 7 BillionDollar Weather and Climate Disasters, National Centers for Environmental Information, 2025; 8 Susan

Crawford & Daevan Mangalmurti, Managing Climate

6 Available

at: https://research.noaa.gov/understanding-the-basics-of-carbon-dioxide/.

7 Available at: https://www.brookings.edu/articles/how-much-isclimate-change-costing-us-households/.

8 Available at: https://www.ncei.noaa.gov/access/billions/.

9

Risk: Implications for Local Governments, Carnegie

Endowment for International Peace, Aug. 20, 2025.9

Economists summarize these costs in a single

metric, the social cost of carbon (SCC). The SCC is defined as the monetized value of the net harm to society

from adding one additional metric ton of carbon dioxide to the atmosphere in a given year. See, e.g., The

Social Cost of Greenhouse Gases (Carbon Dioxide, Methane, Nitrous Oxide), Harvard Law School Environmental & Energy Law Program, Jan. 30, 2026.10 The

SCC has been developed through over four decades of

peer-reviewed research and was used in federal regulatory analysis systematically from 2010 until President Donald Trump issued Executive Order 14154 in

January 2025, which eliminated such calculations

from federal permitting or regulatory decisions. See

Howard Shelanski, Refining Estimates of the Social

Cost of Carbon, The White House: President Barack

Obama, Nov. 1, 2013, https://obamawhitehouse.archives.gov/blog/2013/11/01/refining-estimates-socialcost-carbon; EPA Announces Action to Address Costly

Obama, Biden “Climate” Measurements (Social Cost

of Carbon), Environmental Protection Agency, Mar.

12, 2025, https://www.epa.gov/newsreleases/epa-announces-action-address-costly-obama-biden-climate-

Available

at:

https://carnegieendowment.org/research/2025/08/managing-climate-risk-implications-for-localgovernments.

10 Available at: https://eelp.law.harvard.edu/tracker/the-socialcost-of-carbon/.

9

10

measurements-social-cost; Exec. Order 14154, 90 Federal Register 8353 (2025).

However, the analysis produced shortly before

Executive Order 14154 offers guidance on recent and

accepted SCC estimates. In November 2023, the Environmental Protection Agency issued its most recent

comprehensive estimates, following recommendations

of the National Academies of Sciences, Engineering,

and Medicine and external peer review. That assessment placed the social cost of a metric ton of carbon

dioxide released in 2020 at $120, $190, or $340, depending on the discount rate applied to future damages (2.5, 2.0, and 1.5 percent, respectively), with the

$190 figure serving as the central estimate. Environmental Protection Agency, Report on the Social Cost

of Greenhouse Gases: Estimates Incorporating Recent

Scientific Advances 4 (2023). Other more recent examples from experts, such as one from December 2024,

place the mean cost at $283 per ton for 2020. Frances

C. Moore, et al., Synthesis of evidence yields high social cost of carbon due to structural model variation

and uncertainties, Proceedings of the National Academy of Sciences (2024).11

Amici do not suggest or ask the Court to adopt

any particular value for the social cost of carbon, nor

do they endorse the estimates mentioned for carbon

prices or proxy pricing. Administrations and experts

differ in the estimates they employ for such

Available

https://www.pnas.org/doi/epub/10.1073/pnas.2410733121.

11

at:

11

calculations. That uncertainty, however, does not affect the economic point relevant here. The damages

from greenhouse gases are real economic costs, measurable within recognized bounds of uncertainty, and

large in aggregate. Without a price, tax, or liability

corresponding to these costs, the wedge between the

private cost and the social cost of fossil fuel energy is,

from an economic standpoint, a subsidy conferred by

the absence of internalization, with the difference

borne by third parties, including local governments

that fund adaptation and disaster response.

C. INTERNALIZING THE CLIMATE EXTERNALITY WOULD NOT DESTABILIZE THE UNITED STATES ECONOMY

Parties and amici in climate litigation, including certain amici in support of Petitioners here, frequently assert that permitting damages claims of the

kind at issue here would impose ruinous costs on the

energy sector and, by extension, the national economy. See, e.g., Brief for the Petitioners, Suncor Energy

(U.S.A.) Inc. v. County Commissioners of Boulder

County (2026) (No. 25-170); Brief of Washington Legal

Foundation, et al. as Amici Curiae Supporting Petitioners, Suncor Energy (U.S.A.) Inc. v. County Commissioners of Boulder County (2026) (No. 25-170);

Brief of Amicus Curiae Professor Jason Johnson in

Support of Petitioners, Suncor Energy (U.S.A.) Inc. v.

County Commissioners of Boulder County (2026) (No.

25-170); Amicus Curiae Brief of the Buckeye Institute

in Support of Petitioners, Suncor Energy (U.S.A.) Inc.

12

v. County Commissioners of Boulder County (2026)

(No. 25-170).

The industry trends and economic modeling do

not support the conclusion that disruption of that

magnitude would occur. The point is not that internalization is costless; it is that the evidence does not support the leap from internalization to economic destabilization. First, oil and gas companies themselves

support carbon pricing as a way to internalize SCC

costs. Second, even absent that measure at the federal

level in the United States, such companies have accounted for anticipated SCC internalizations in their

investment pricing. Finally, models show minor overall impact of internalized SCC on the U.S. economy,

and that the benefits in terms of avoided climate damages significantly outweigh the costs.

1. Oil and Gas Companies Support Other Efforts to Internalize the Social Cost of Carbon,

Indicating Those Efforts Are Economically

Viable

As discussed in Part A, liability is one of several

instruments through which producers can internalize

the costs of externalities, but there are other options

as well. In the oil and gas sector, one widely discussed

option is “carbon pricing,” i.e., a fee or tax on emissions—a policy adopted by most advanced economies

(but not the U.S.). Ellen Chang & James Stock, The

future of carbon pricing in the U.S., Harvard Business

13

School, Dec. 10, 2024.12 Industry participants and experts are widely aligned in their support of such

measures, indicating that they view these costs as economically manageable. For example, supporters include the Climate Leadership Council (CLC), a United

States-based coalition of environmental organizations, bipartisan “opinion leaders,” and companies

such as Shell Oil Company, TotalEnergies, and ConocoPhillips, Our History, Climate Leadership Council,

https://clcouncil.org/about/our-history/ (last visited

July 31, 2026); Partners, Climate Leadership Council,

https://clcouncil.org/about/partners/ (last visited July

29, 2026).13 The CLC credited the carbon tax as “the

most cost-effective lever to reduce carbon emissions at

the scale and speed that is necessary,” therefore “correcting a well-known market failure.” Economists’

Available at: https://www.hbs.edu/bigs/the-future-of-carbonpricing-in-the-us.

13 ExxonMobil was also a founding member, but was suspended

in 2021 over an Exxon lobbyist’s comments indicating the company wasn’t fully dedicated to carbon pricing. Exxon suspended

from climate advocacy group it helped form, Reuters, Aug. 6, 2021,

https://www.reuters.com/business/exxon-suspended-climate-advocacy-group-it-helped-form-2021-08-06. An Exxon spokesman

said the suspension would “in no way deter our efforts to advance

carbon pricing that we believe is a critical policy requirement to

tackle climate change.” Exxon Mobil suspended from the Climate

Leadership Council, following secret Greenpeace recording,

Washington Post, Aug. 6, 2021, https://www.washingtonpost.com/business/economy/exxon-mobil-suspended-fromthe-climate-leadership-council-following-secret-greenpeace-recording/2021/08/06/2db6da3e-f6a6-11eb-9068bf463c8c74de_story.html.

12

14

Statement on Carbon Dividends, Climate Leadership

Council (Jan. 17, 2019), https://clcouncil.org/economists-statement/. Among the Four Pillars of its carbon dividends plan, the CLC includes a carbon fee,

with net proceeds “returned to the American people.”

The Four Pillars of Our Carbon Dividends Plan, Climate Leadership Council, (Sept. 2019), https://clcouncil.org/archive/our-plan/. Specifically, it recommends

a $40 per ton fee on emissions starting in 2017, which

would then increase every year at five percent above

inflation. The Four Pillars of Our Carbon Dividends

Plan, Climate Leadership Council, (Sept. 2019),

https://clcouncil.org/archive/our-plan/.

In 2021, Petitioner ExxonMobil likewise voiced

support for the American Petroleum Institute’s steps

to put a price on carbon:

An explicit price on carbon would be transparent, incentivize behavior to reduce emissions,

allow the market to function efficiently, and

stimulate the cross-sector opportunities needed

to uncover the largest emission reduction opportunities at the lowest cost.

Darren W. Woods, Why ExxonMobil supports carbon

pricing, ExxonMobil (Mar. 29, 2021), https://corporate.exxonmobil.com/news/viewpoints/supports-carbon-pricing.

15

2. Oil and Gas Companies’ Policies Anticipate

Internalized Costs, Indicating They Are

Prepared for Internalized Costs

Even in the absence of federal carbon pricing in

the United States, oil and gas companies have anticipated an increase in internalized costs in the future,

again showing that the industry is prepared for and

can withstand liability. Oil and gas companies have

adopted “proxy” or “shadow” pricing, meaning they

have built expected future costs into their assessments, such as for potential investments. Vanora Bennett, What is shadow carbon pricing? European Bank

for

Reconstruction

and

Development,

https://www.ebrd.com/home/news-andevents/news/2019/what-is-shadow-carbon-pricing.html. Indeed, as the Supreme Court of New York

recognized, in the mid-2010s Petitioner ExxonMobil

used an $80 per ton proxy carbon cost, which was

meant to incorporate the potential impacts of climate

policies:

The evidence adduced at trial, including the

testimony of former ExxonMobil CEO Rex Tillerson, confirmed that for planning and budgeting purposes, ExxonMobil incorporates proxy

costs with its assessment of future energy demand, and the proxy cost is therefore embedded

in the price bases that are used to evaluate new

investment opportunities.

People v. Exxon Mobil Corp., 119 N.Y.S.3d 829, 2019

NY Slip Op 51990(U), at *12 (N.Y. Sup. Ct. 2019).

16

ExxonMobil confirmed this in its 2026 report on

“climate solutions,” stating that it uses “various tools

and assumptions, including a proxy cost of carbon.”

ExxonMobil, Advancing Climate Solutions 35

(2026). 14 For “advanced economies,” greenhouse gas

emissions prices were set at $9 to $150 per metric ton

for the period of 2025 through 2050. ExxonMobil, Advancing Climate Solutions 35 (2026). For the period

between 2025 and 2030, the pricing was based on “currently stated existing or anticipated policies,” while

the pricing for 2030 through 2050 “reflect[ed] presumed regional policies for both advanced and emerging economies.” ExxonMobil, Advancing Climate Solutions 35 (2026).

Likewise, in a 2014 report from Carbon Disclosure Project, Suncor, parent company of Petitioners

Suncor Energy (U.S.A.) Inc. and Suncor Energy Sales

Inc., was reported to use “a shadow carbon price that

is significantly above current regulatory costs and applies a stress test to that price.” Carbon Disclosure

Project, Global corporate use of carbon pricing: Disclosures to investors 41 (2014).15 In its 2025 Annual Information Form, Suncor noted:

As part of its ongoing business planning, Suncor estimates future costs associated with

Available

at:

https://corporate.exxonmobil.com/-/media/global/files/advancing-climate-solutions/2026/2026-advancing-climate-solutions-report.pdf.

15

Available at: https://eco-financas.org.br/wp-content/uploads/2014/09/global-price-on-carbon-report-2014.pdf.

14

17

[greenhouse gas, or GHG] emissions in its operations and in the evaluation of future projects.

These estimates use the company’s outlook for

the carbon price under current and pending

GHG regulations, and under various plausible

scenarios, to test the company’s business strategy against a range of policy designs.

Suncor, Annual Information Form 31 (2026).16

Crucially, the use of these proxy costs means

that ExxonMobil and Suncor continue to make investments even after accounting for anticipated carbon

costs; the adjusted pricing is not sufficient to dissuade

them from pursuing projects, let alone to meaningfully affect corporate profitability. This is not, of

course, dispositive on the effects of tort liability. But

it is probative of the central economic point: the industry already treats carbon costs of similar magnitude

as manageable business inputs rather than existential threats. Damages awards would presumably alter

company behavior only if they were significantly

higher than the amounts already considered in

shadow pricing—and there is no reason to expect that

outcome in this litigation.

3. Liability Amounts Will Not Be Sufficiently

Large to Negatively Affect the U.S.

Available at: https://www.suncor.com/-/media/project/suncor/files/investor-centre/annual-report-2025/2025-aifen.pdf?modified=20260226213040&created=20260225170203.

16

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Economy, Whereas Unabated Climate

Change Would Have a Notable Negative Impact

Respondents seek compensatory damages only

for their share of local costs of climate adaptation and

response. Viewed from a broader economic standpoint,

conceivable awards would be negligible relative to the

revenues of Petitioners, which are measured in billions of dollars annually.17 The comparison to carbon

pricing reinforces the point. Tort liability would internalize far fewer costs than comprehensive carbon pricing because it applies only where emissions cause

measurable and provable harm, and only where plaintiffs are willing and able to initiate costly and often

prolonged litigation. By contrast, the CLC’s approach

of using carbon fees aims at “a net-zero future,” Our

Approach, Climate Leadership Council (last visited

July 29, 2026), https://clcouncil.org/archive/our-approach/, meaning that comprehensive pricing would

internalize far greater costs than tort liability alone

could ever produce.

17 Suncor reported $5.9 billion net earnings in 2025. Suncor, 2025

Annual Report 12 (2026), https://www.suncor.com/-/media/project/suncor/files/investor-centre/annual-report-2025/2025-annual-report-en.pdf?modified=20260226213013&created=20260225170203. ExxonMobil reported $28.8 billion earnings in 2025. ExxonMobil, 2025 Annual Report 1 (2026),

https://investor.exxonmobil.com/sec-filings/annual-reports/content/0001193125-26-147617/0001193125-26-147617.pdf.

19

A damages award also differs from an economywide loss. In the first instance, it is a transfer from the

defendant to the plaintiff, not a destruction of productive capacity. Its broader economic effects operate prospectively through the incentives that expected liability creates. Furthermore, those prospective economic

effects do not exist in a vacuum. Consistent with the

social costs of carbon discussed in Part B, unabated

climate change itself would have a negative economic

impact. See, e.g., William Nordhaus & Lint Barrage,

Policies, projections, and the social cost of carbon: Results from the DICE-2023 model, 121:13 Proceedings

of the National Academy of Sciences (2024). Actions

undertaken in response to expected liability that

would serve to mitigate climate change would also

help mitigate climate change’s negative economic effects.

The economic viability of damages awards

holds even under a far more aggressive internalization scenario. If liability, taxation, and regulation

combined to confront every producer with the full social cost of carbon, that scenario would far exceed any

outcome available in this litigation. Yet even then, the

evidence does not show catastrophic economic effects.

The macroeconomic consequences of carbon pricing at

this scale have been studied intensively, including in

multi-model comparison exercises such as the Stanford Energy Modeling Forum, in analyses by the Congressional Budget Office, and in the integrated assessment literature associated with the Nobel-recognized

work of William Nordhaus. See, e.g., John Weyant,

EMF36: Carbon Pricing After Paris (CarPri), Stanford

20

Engineering Energy Modeling Forum 18 ; Congressional Budget Office, Effects of a Carbon Tax on the

Economy and the Environment (2013) 19 ; William

Nordhaus & Lint Barrage, Policies, projections, and

the social cost of carbon: Results from the DICE-2023

model, 121:13 Proceedings of the National Academy of

Sciences (2024).20

The consistent finding is that economy-wide

carbon prices reduce the growth of gross domestic

product by fractions of a percentage point per year relative to baseline. For example, an Energy Modeling

Forum study gathered eleven modeling teams to run

stylized scenarios, looking at “how environmental and

economic outcomes depend on the initial carbon tax

rates, the rate at which the tax escalates, and how the

government uses the revenue collected by the carbon

tax.” James R. McFarland, et al., Overview of the EMF

32 Study on U.S. Carbon Tax Scenarios, 9:1 Climate

Change Economics (2018).21 The study found:

The most important takeaway from this figure

is that in every policy scenario, in every model,

the U.S. economy continues to grow at or near

18 Available

at: https://emf.stanford.edu/emf-36-carbon-pricingafter-paris-carpri.

19 Available at: https://www.cbo.gov/publication/44223.

20

Available

at:

https://economics.yale.edu/sites/default/files/2024-03/barrage-nordhaus-2024-policies-projectionsand-the-social-cost-of-carbon-results-from-the-dice-2023model.pdf.

21

Available

at:

https://pmc.ncbi.nlm.nih.gov/articles/PMC6913042/.

21

its long-term average baseline rate, deviating

from reference growth by no more than about

0.1% points. We find robust evidence that even

the most ambitious carbon tax is consistent

with long-term positive economic growth, near

baseline rates, not even counting the growth

benefits of a less-disrupted climate or lower ambient air pollution.

James R. McFarland, et al., Overview of the EMF 32

Study on U.S. Carbon Tax Scenarios, 9:1 Climate

Change Economics (2018).

Rather than producing substantial effects on

the economy as a whole, carbon pricing shifts investment and consumption within the energy sector, including toward renewable energy sources and technologies. James R. McFarland, et al., Overview of the

EMF 32 Study on U.S. Carbon Tax Scenarios, 9:1 Climate Change Economics (2018). This is unsurprising

as a matter of accounting, since fossil fuel extraction

and refining constitute a low single-digit share of national output. Value added by Industry as a Percentage of Gross Domestic Product, U.S. Bureau of Economic Analysis, last visited July 29, 2026 (showing

mining overall as consistently under 1.5 percent of the

share of the overall GDP from 2024 to present). 22

Available

at:

https://apps.bea.gov/iTable/?reqid=1603&step=2&Categories=GDPxInd&isURI=1&_gl=1*18yr04m*_ga*MTczNjYyMTM

22

22

Meanwhile, the estimated external damages, while

large in absolute terms, are modest relative to an over

$30 trillion economy. GDP Update, United States

Congress Joint Economic Committee (last visited Aug.

1,

2026),

https://www.jec.senate.gov/public/index.cfm/republicans/gdp-update (showing a $32.475

trillion GDP as of July 30, 2026).

This evidence again underscores why the economic analysis cannot consider internalization costs

in isolation. As discussed above, climate change itself

would have a negative overall effect on the economy if

left unabated:

The updated results imply a 1.6% GDP-equivalent loss at 3 °C warming over preindustrial

temperatures, up from 1.2% in the review for

DICE-2016. It is important to note that surveyed studies generally omit many climate

change impact channels, such as biodiversity

loss, ocean acidification, extreme events, and

social unrest.

William Nordhaus & Lint Barrage, Policies, projections, and the social cost of carbon: Results from the

5Ni4xNzg1Mjc5MDY2*_ga_J4698JNNFT*czE3ODUyNzkwNjYkbzEkZzEkdDE3ODUyODAxMzEkajU1JGwwJGgw#eyJhcHBpZCI6MTYwMywic3RlcHMiOlsxLDIsNF0sImRhdGEiOltbImNhdGVnb3JpZXMiLCJHRFB4SW5kIl0sWyJUYWJsZV9MaXN0IiwiVFZBMTEwIl1dfQ==.

23

DICE-2023 model, 121:13 Proceedings of the National

Academy of Sciences (2024).

Of course, climate change and global warming

come from many sources beyond oil and gas companies. However, arguments that reject internalization

of externalities based on feared harm to the overall

U.S. economy fail to account for the countervailing

economic harm that climate change itself inflicts

when costs remain externalized. The relevant economic comparison is therefore not between liability

and a cost-free baseline; it is between internalization

and continued externalization of climate-related

harms.

Amici emphasize what these findings do and do

not establish. They do not establish that internalization is costless. A price of $190 per ton is economically

meaningful, particularly for emissions-intensive sectors. Nor do the findings speak to which level of government, or which institution, should administer internalization; that allocation is a legal and constitutional question outside amici’s expertise. What the

findings establish is a bound on the stakes. Arguments premised on the claim that recognizing liability

of this kind would destabilize national energy markets or the broader economy assert an empirical proposition, and that proposition is inconsistent with the

peer-reviewed evidence on the economic effects of pricing carbon, even at levels of internalization far beyond

anything this case could produce. Finally, even if policymakers conclude that some reallocation is

24

warranted, the economic effects of liability are gradual and bounded—leaving ample room for legislative

adjustment. The ramifications of liability will not be

so catastrophic as to prevent such a deliberative process.

CONCLUSION

Amici respectfully submit this brief to assist

the Court. The questions presented are legal, and economics does not answer them. The Court’s resolution

of those questions should proceed, however, from an

accurate account of the underlying economics: externalities are a standard market failure, liability is a

standard corrective instrument, climate change is a

substantially unpriced externality, and the aggregate

economic effects of internalizing it are bounded and

modest, particularly when compared with the costs of

leaving climate harms externalized.

Respectfully submitted,

NICHOLAS RENZLER

Counsel of Record

GEESU LEE

FOLEY HOAG LLP

1301 Avenue of the Americas

New York, NY 10019

(212) 812-0400

nrenzler@foleyhoag.com

CELESTE KMIOTEK

Counsel for Amici Curiae

AUGUST 3, 2026