Money & The EconomyOpinion

In New Jersey, misguided climate lawsuits could harm state economy

As the chapter closes on another Atlantic hurricane season, we are reminded how severe weather events have increasingly become serious challenges for the New Jersey coast.

With so much on the line, the debate about the right and wrong ways to adapt to changing weather conditions is important. Swift and comprehensive action is needed but it is important that political leaders in the Garden State do not let bad politics get in the way of good policy. Counterproductive climate-change lawsuits like the recent one filed by New Jersey’s attorney general, for example, will not move the needle on protecting the state and will harm our economy. We need real solutions.

Despite its many flaws, the bipartisan infrastructure bill signed by President Joe Biden in November 2021 helped make some encouraging progress. The bill provided $3.5 billion in grants through the Federal Emergency Management Agency to make federal funds available through the Flood Mitigation Assistance program to reduce or eliminate the risk of repetitive flood damage. This more than triples the usual funding, helping communities in New Jersey and beyond address extreme flooding and shoreline erosion.

In addition, FEMA will make available $500 million in loans and grants to provide hazard-mitigation assistance to local governments to reduce risks of disasters and natural hazards, especially flooding and shoreline erosion. These disbursements allow local governments to mitigate the impact of natural disasters.

Some New Jersey towns are already benefiting. Atlantic City secured $5.12 million to improve the Baltic Avenue Canal, making it capable of handling stormwater runoff and decreasing flooding in the city. Bayonne got $2.21 million for new catch basins, a new stormwater storage system underneath the Oil Cottage Street Park and increased combined sewer pipes. The program also provided $2 million to the Port Newark-Elizabeth Marine Terminal to elevate the electrical and mechanical equipment in the Port Authority of New York and New Jersey’s Building 111, which sits in a flood-prone area.

In addition, technology such as NJ FloodMapper — an interactive mapping tool built by Rutgers University researchers, which allows users to evaluate flood exposure — is helping New Jersey communities prepare for natural disasters. These practical solutions help safeguard the state from extreme weather.

Antagonistic and ineffective

On the other hand, the state of New Jersey, along with some individual coastal communities across the U.S., including Hoboken, has taken the antagonistic and ineffective approach of filing climate lawsuits. In 2020, Hoboken followed cities such as San Francisco by filing a lawsuit against a handful of energy companies, in this case alleging that energy companies violated the state’s Consumer Fraud Act and should pay for climate-related damages. This claim falls apart when one considers that Hoboken officials have relied on energy products for decades, using them for their transportation, electricity, and heating and cooling needs.

On Oct. 18 of this year, New Jersey again threw itself into the fray when Attorney General Matthew Platkin filed a case in Superior Court arguing that energy companies like Exxon Mobil, Shell and others violated New Jersey’s consumer fraud laws.

It makes little sense for Hoboken and others to allege “deception” by energy providers for selling products we need to keep our economy moving. Chevron recently pointed this reality out in an answer to Honolulu’s lawsuit, a copycat of the cases brought by the New Jersey attorney general and Hoboken. The brief reminded the court that federal officials have recognized that petroleum and natural gas are vital to modern life and, dating back to the 1950s, have weighed this against any potential climate-change risks by using ample data to make informed policy decisions.

For example, then U.S. Rep. Al Gore stated in 1981 that the connection between fossil-fuel use and climate change “would seem to be quite obvious.” More recently, President Biden appealed to America’s domestic oil and gas industry to restart capacity to address supply challenges — an acknowledgment of the central role of fossil fuels that implies we should be teaming with energy producers, not suing them for “deception.”

There’s a choice to be made

Where do we go from here? The 3rd U.S. Circuit Court of Appeals in August directed Hoboken’s lawsuit to proceed in state court, although history says both the New Jersey and Hoboken lawsuits are likely to fail on merit. That’s because judges in similar cases have found them sorely lacking. For example, in its dismissal of a New York City lawsuit, the 2nd Circuit Court of Appeals noted that “emissions in [New York or] New Jersey may contribute no more to flooding in New York than emissions in China.” Ironically, Justice Elena Kagan, in her dissent in West Virginia v. EPA, argued, “Whatever else this Court may know about, it does not have a clue about how to address climate change.”

New Jersey communities have a choice to make about how to adapt to severe weather. The best path is innovative technology and infrastructure investment — practical solutions that protect us and will help bolster our economy. Suing the companies that meet our energy needs is the wrong approach. Let’s hope our leaders take note.

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Michael Busler

Michael Busler, Ph.D. is a public policy analyst and a Professor of Finance at Stockton University where he teaches undergraduate and graduate courses in Finance and Economics. He has written Op-ed columns in major newspapers for more than 35 years.

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