DE
DeutschFrançaisPage en allemand uniquementItalianoPagina solo in tedesco
Buch · Reparation for Climate Change: The Successes and Limits of Litigation 073, sui generis Verlag 2026

Reparation for Climate Change: The Successes and Limits of Litigation

Helen · 27. Februar 2026
‹Kapitel 6 von 25S. 63–78›
Angaben zum Werk
Herausgeber/innen
Helen Keller, Corina Heri
Reihe
Reparation for Climate Change: The Successes and Limits of Litigation 073
Verlag
sui generis Verlag
Sprache
Englisch
DOI
10.38107/073
Zitiervorschlag
Helen Keller, Reparation for Climate Change: The Successes and Limits of Litigation, Reparation for Climate Change: The Successes and Limits of Litigation 073, Zürich 2026, S. 63–78
Inhalt
TiteleiSeiten 1–9PrefaceSeiten 9–19AcknowledgmentsSeite 11Helen Keller and Corina HeriIntroductionS. 1–20Part One Modeling and Valuing Climate-Related HarmsS. 21–38Alberto MontiS. 39–61
Arden RowellS. 63–78
1.Psychological Challenges in Valuing Climate HarmsS. 632.Implications of the Psychology of Climate Harm for LitigationS. 66a.General ImplicationsS. 66b.Application to Loss and Damage in Scenario 1 / KlimaSeniorinnenS. 671.General dampening of perceived incentive to bring suit. Bringing suitS. 672.The possibility of sincere (if misguided) polluters. Decision-makersS. 673.The danger of undervaluation by all parties and the court. Courts faceS. 683.Responding to the Psychological Challenges of Estimating Climate HarmsS. 69a.The Impact of Quantification Methods on “How Much” Climate Harm is ValuedS. 714.Quantitative Climate Valuations in the US — the Social Cost of CarbonS. 73a.The US Social Cost of Carbon as a Quantified and Monetized Estimate of (Global) Climate HarmS. 73b.Ethical Choices Inside Valuations of Climate DamageS. 755.ConclusionS. 78Jason RudallS. 79–97Viktoriya GurashS. 99–108Part Two Litigation Strategies, Possibilities and RisksS. 109–134April Williamson, Joe Udell and FilippoS. 135–157CharlotteS. 159–196Hazhar JamaliS. 197–204Part Three Critical Perspectives on Remedies and ImplementationS. 205–228Usha NatarajanS. 229–250Linnéa NordlanderS. 251–269SaraS. 271–285Pranav GanesanS. 287–296Part Four Corporate Liability for Climate ChangeS. 297–319Josephine van ZebenS. 321–337Monika HintereggerS. 339–356Larisa AlwinS. 357–364Part Five The Successes and Limits of LitigationS. 365–3691.Preliminary RemarksS. 3672.Legitimacy of Institutions and Perceptions of (Procedural) JusticeS. 369–3813.The Way Forward — A Look at Brazil and the International SphereS. 381–3924.ConclusionS. 393–420
— S. 63 —

Arden Rowell

Chapter 3: Psychology and the Quantitative Valuation of Climate Loss and Damage

1.Psychological Challenges in Valuing Climate Harms

This section briefly summarizes key takeaways from research in law and psychology that explores the psychology of climate harms. It then flags ways in which the psychological challenges people face in valuing climate harms may interact with the ability of law — and of judges in particular — to effectively estimate those harms.

Past research in the psychology of environmental law suggests that people face systematic challenges in perceiving, understanding, and valuing environmental injuries in general, and climate injuries specifically.1 This can lead subconsciously to under-perception, under-estimation, and under-valuation of climate harms, even by sincere and otherwise well-informed individuals.2

Several of the characteristics of climate harm that trigger undervaluation are shared with other environmental harms. These include:

—diffusion, or the fact that climate harms tend to be spread across space

and time;3

—complexity, or the fact that climate damage exhibits complex and non-

linear impacts and relationships;4 and — S. 64 —— nonhuman character, in that many of the harms of climate change accrue to nonhumans and via nonhuman processes.5

1Arden Rowell and Kenworthey Bilz, The Psychology of Environmental Law (NYU Press 2021).

2Ibid. 219–261.

3The temporally and spatially diffuse consequences of climate change trigger a number of phenomena that tend to make climate change be perceived as less serious and less salient. These phenomena include nonidentifiability, the “unavailability heuristic,” out-group bias, and present bias. See ibid.; for a summary of related psychological research, see also ibid. 31–62.

4Among other factors, the extraordinary complexity of climate change generates a high cognitive and emotional load, creating an incentive to (over)rely on simplifying heuristics and triggering motivated cognition. For a summary of related psychological research, see ibid. 63–92.

From a psychological perspective, these characteristics tend to make climate change harms (alongside other environmental harms) prone to neglect. Notably, neglect of such harms is not necessarily purposeful or even conscious. Climate change exhibits the environmental qualities of diffusion, complexity, and a nonhuman character. Yet climate harms also exhibit other characteristics that make them especially psychologically “wicked” (alongside their economic, political, and ethical wickedness).6 These include the: — extraordinary magnitude of many climate harms;7 — unprecedented nature of climate change;8 and — the moral impacts,9 many of which relate to questions of reparations.

These characteristics altogether make cognitive and emotional processing of climate harms extraordinarily burdensome for individuals. These burdens, in turn, make decision-making vulnerable to a panoply of psychological heuristics, biases, and motivations. Notably, these processes can interfere with and even obstruct individuals’ ability to perceive climate harm; understand — S. 65 —complex climate science; attach emotional meaning to widespread, distant, foreign, or nonhuman harms; or value the impacts either of climate change itself or the laws and policies that seek to address it.10

5The nonhuman impacts of climate create barriers to empathy; furthermore, where empathy is overcome, emotional responses to the overwhelming scope of impacts may trigger denial. Humans may also struggle to process nonhuman processes and impacts via brains that are optimized to process (human) social processes (the so-called “social brain”). For a summary of related psychological literature see ibid. 93–116 and Arden Rowell, Kenworthey Bilz and Howard Jyun-Syun Li, ‘Environmental Law and Psychology’ in Rebecca Hollander Blumoff (ed), Handbook in Law and Psychology (Routledge 2025).

6Rowell and Bilz, Psychology (n 1) 219–261; Richard Lazarus, ‘Super Wicked Problems and Climate Change: Restraining the Present to Liberate the Future’ (2009) 94 Cornell Law Review 1154.

7The extreme high magnitude of potential impacts exacts a high cognitive and emotional load, and may trigger psychic numbing, while emotional responses may trigger or exacerbate denial and/or motivated reasoning. See Rowell and Bilz, Psychology (n 1) 219-261; Jonathan Wiener, ‘The Tragedy of the Uncommons: On the Politics of the Apocalypse’ (2016) 7(S1) Global Policy 67–80; Cass Sunstein, Averting Catastrophe: Decision Theory for COVID-19, Climate Change, and Potential Disasters of All Time (NYU Press 2021); Arden Rowell, ‘Regulating Best-Case Scenarios’ (2021) 50(4) Environmental Law 1105.

8The novelty of climate change undermines common tools for debiasing, and may make them seem less credible, in a “tragedy of the uncommons.” See Rowell and Bilz, Psychology (n 1) 219–261; Wiener (n 7).

9The disturbing moral quagmire presented by climate change may generate motivated cognition and cognitive distortions, and emotional responses may trigger or exacerbate denial and/or motivated reasoning. See Rowell and Bilz, Psychology (n 1) 219; Albert Bandura, Moral Disengagement: How People Do Harm and Live with Themselves (Worth 2016); Wouter Peeters, Lisa Diependaele and Sigrid Sterckx, ‘Moral Disengagement and the Motivational Gap in Climate Change’ (2019) 22 Ethical Theory and Moral Practice 425.

Importantly and ironically, the psychological distortions that make climate change hard to process can actually be exacerbated for individuals who feel a sense of personal, causal, or moral connection to climate harms (or who are being encouraged to feel that connection). This is because normal people tend to feel uncomfortable at harming others.11 As a result, they are prone to engage in a number of (subconscious) mental maneuvers known collectively as “moral disengagement” that minimize their discomfort12— but which also have the effect of making climate harms (subjectively) smaller and less concerning. As a result of moral disengagement, a polluter may erroneously undervalue the environmental impacts of their actions not because they are posturing,13 but because their sincere intuitions about the damage they have caused are distorted by their own responsibility.

How widespread are the psychological phenomena on which this research is based? One thing to note is that intelligence and expertise do not appear to grant immunity to human psychology; judges, for example, still exhibit psychological heuristics and biases in their approach to legal puzzles.14 That said, one limitation of psychological research is that it has historically depended upon so-called “WEIRD” — Western, educated, industrialized, rich, and democratic — experimental subjects, and that its extension to populations outside those categories is (thus far) less well-studied.15 Application beyond these populations — S. 66 —is thus more likely to falter. Another limitation, common to empirical research of all kinds, is that the findings are only so good as the methods on which they were based. Notably, however, the empirical research above suggests that non- empirical intuitive methods — for example, reasoning intuitively about climate perceptions, behaviors, or impacts without recognizing the potential impact of psychology — will be especially prone to subconscious error in regards to climate change harms.

10See Rowell and Bilz, Psychology (n 1) 219–261.

11See ibid.; Bandura (n 9); Wouter, Diependaele and Sterckx (n 9).

12These include minimization, displacement of responsibility, depersonalization and dehumanization, palliative comparisons, and moral justification. See Bandura (n 9); Shaul Shalvi and others, ‘Self-Serving Justifications: Doing Wrong and Feeling Moral’ (2015) 24(2) Current Directions Psychological Science 125; Wouter, Diependaele and Sterckx (n 9).

13Arden Rowell and Kenworthey Bilz, ‘The Psychology of Pollution Control’ (2022) 54 Arizona State Law Journal 899.

14Psychological research on this point — albeit primarily performed in the United States on domestic courts — finds that, for the most part, judges are subject to the same cognitive, emotional, and motivational challenges as other people. See Chris Guthrie, Jeffrey Rachlinski and Andrew Wistrich, ‘Inside the Judicial Mind’ (2000) 86 Cornell Law Review 777; Chris Guthrie, Jeffrey Rachlinski and Andrew Wistrich, ‘Blinking on the Bench: How Judges Decide Cases’ (2007) 93 Cornell Law Review 1; Jeffrey Rachlinski, Chris Guthrie, and Andrew Wistrich, ‘Inside the Bankruptcy Judge’s Mind’ (2006) 86 Boston University Law Review 1227; Andrew Wistrich, Chris Guthrie, and Jeffrey Rachlinski, ‘Can Judges Ignore Inadmissible Information? The Difficulty of Deliberately Disregarding’ (2005), 153 University of Pennsylvania Law Review 1251.

15Joseph Henrich, Steven J Heine and Ara Norenzayan, ‘Most People Are Not WEIRD’ (2010) 466 Nature 29; Rowell and Bilz, Psychology (n 1) 140–145.

2.Implications of the Psychology of Climate Harm for Litigation

The prior section flagged the psychological tendency to underestimate climate harms. What are the legal and institutional implications of this tendency for climate reparation, and for the possibilities and limits of litigation? This section addresses this question first by considering generalizable implications for law and policy that flow from a recognition that individuals struggle to perceive, understand, and value climate harms. It then sketches implications more specific to loss and damage through a discussion of scenario 1, which is based upon the KlimaSeniorinnen case.16

a.General Implications

One general takeaway of the research summarized above is that individuals’ intuitions about climate harms are limited in important and systematic ways. As noted, such intuitions are prone to incompletion and underestimation, and may be particularly deflated where the estimator knows themselves to have a causal connection to the harm. Intuitive estimations of climate harm should therefore be regarded as presumptively unreliable. This generates potentially troubling implications for the management of climate harms, including that:

—Markets that aggregate individuals’ valuations of climate and environ-

mental harms are likely to be systematically distorted, towards failing to recognize and/or minimizing climate harm.

—Bilateral negotiations and settlement agreements based upon the subjec-

tive perceptions of harm of both parties may lead to sincere underestimation of climate damage even in circumstances where all parties are acting in good faith.

— S. 67 —

—Multilateral negotiations (undertaken by humans) may be affected by

sincere underestimation of climate harm, especially (though not only) by states with higher emissions/contribution levels.

—Judges, who are human, may also be vulnerable to intuitive undervalu-

ation of climate harms.

It may also have important implications for the relative wisdom of qualitative and quantitative approaches to managing climate harm (as addressed further in the next section).

b.Application to Loss and Damage in Scenario 1 / KlimaSeniorinnen

Teasing out the implications of psychology on the management of climate loss and damage may be easier when applied to specific facts. Consider, on this front, the facts of scenario 1, or the KlimaSeniorinnen case, in which a group of elderly people brought suit in the European Court of Human Rights on the grounds that a state — Switzerland — was responsible for causing them climaterelated harms in violation of the European Convention of Human Rights. Plaintiffs sought to hold the respondent responsible for its inadequate mitigation measures, as well as a just satisfaction award as reparation.

From an environmental law and psychology perspective, this scenario triggers at least three concerns:

1.General dampening of perceived incentive to bring suit. Bringing suit

of any kind requires plaintiffs to recognize that they have been harmed — and the greater the perceived harm, the greater the incentive to bring that suit. General underestimation of climate harms acts as a subconscious dampener on perceived harm, however, meaning that the plaintiffs in climate suits must overcome their own individual tendencies to underperceive, underestimate, and minimize climate harms in order to perceive that they have been harmed. The plaintiffs in this (and other) cases may overcome psychological dampening enough to bring suit — but that does not necessarily mean that even they have accurately estimated the full extent of climate harms, and the zealousness of the pursuit of remedy may in many cases be chilled by marginal psychological impacts. Such impacts may help to explain the relative rarity — at least in the past — of claims of this type being brought.

2.The possibility of sincere (if misguided) polluters. Decision-makers

within Switzerland — or any state — may sincerely underperceive the climate harms that its actions (or inactions) cause. Such sincere underperception is easily misunderstood as political or pretextual posturing, but the psychological research suggests that in fact polluters face barriers to — S. 68 —perceiving the extent of the harm caused by their pollution. This can lead them to “over”-pollute,17 and also may lead to reduced subjective legitimacy for the ECHR of (even an accurate) just satisfaction award. The perceived legitimacy of courts like the ECHR who engage in climate reparations may be impacted because affected states (and their populace) may sincerely perceive even proportionate judicial response as disproportionate. It also problematizes the judicial choice to leave implementation decisions to the responsible state, given that the state’s own judgment of the harms it has caused is likely to be compromised.

3.The danger of undervaluation by all parties and the court. Courts face

intuitive cognitive and psychological challenges in attempting to calculate climate damage, and as noted above, even the plaintiffs may underestimate that damage because of the psychological complexity of the matter. Notably, where all parties may be affected, traditional safeguards such as a neutral arbiter and adverse parties may not be sufficient to ensure that all climate damage is perceived, valued, and addressed. This presents real challenges for courts like the ECHR whose decisions about whether climate action is adequate depend upon of the perceived harm caused by those (in) actions, and may lead to failing to recognize that important thresholds have been crossed, as well as to deflated estimates of damage. While in some cases — as with KlimaSeniorinnen itself — the harms may be so significant that actions appear inadequate even given the tendency towards underperception, in aggregate, these impacts will tend to subconsciously reduce the number of times that climate actions are found to be inadequate, as well as lowering the quantity of compensation that appears just.

In the KlimaSeniorinnen case, as in other climate reparations cases, legal questions for judges often depend upon the judge’s perception of the magnitude of the harm caused. In human rights cases, such determinations will often depend upon determining that a threshold has been crossed, for example that action was inadequate or insufficient (given the harm). For these cases, the risk of underperception of climate harms leads to a risk of underrecognition of human rights. Calculations of loss and damage can also lead to monetary estimates of harm, however, including via awards of just satisfaction. In these cases, the risk of underperception of climate harm leads to a risk of underestimating the quantity of compensation that is just. Both of these concerns are serious, and mean that grappling with the psychology of climate change harm has real legal consequences.

17See Rowell and Bilz, ‘Pollution’ (n 13).

— S. 69 —

3.Responding to the Psychological Challenges of Estimating Climate Harms

How should law respond to the psychological point that people’s intuitive estimations of climate harm are likely to be especially unreliable? One easy but dangerous response would be to accept the descriptive findings of psychology, but to reject any prescriptive impact — for example, by concluding fatalistically that there is nothing to be done about the existence of human psychology, so that we might as well continue on with legal and institutional approaches such as we have. This response is dangerous because it would perpetuate systematic underresponsiveness to climate harms generally and climate loss and damage specifically. Another — better — response would be to acknowledge the descriptive findings, and then to seek prescriptions for legal and institutional approaches to addressing the harm of climate change that account for (and where possible counterbalance) the distortions that human intuition can introduce.

What would it look like to prescribe a response to the unreliability of people’s intuitions regarding climate harms? One response, which may be particularly relevant to loss and damage where the danger of moral disengagement is especially high, is to systemize reliance upon third parties for the calculation of damages. Note, however, that even third-party intuitions will be subject to the constellation of psychological factors that affect valuation of diffuse, complex, nonhuman harms with extraordinary magnitude and an unprecedented nature. To address the psychological impacts of those characteristics, it will be important to adopt systems that move decision-making beyond reliance upon intuitive judgments of harm.

Developing reflective approaches to valuation of climate harms may, then, require legal valuations of climate harm away from the fast, intuitive systems of psychological processing — what psychologists sometimes call “System I” processes — that are especially vulnerable to intuitive misstep, and towards slower, deliberate “System II” processes that allow people to process information coolly, systematically, and reflectively.18 One way of doing this is to quantify.19 The systemized thinking required by quantification can act as a kind of psychological tonic to (some) of the psychological distortions that plague evaluation of climate harms. In this sense, quantified estimates of the harm of climate change may not only be valuable to legal processes from an — S. 70 —democratic, instrumental or pragmatic perspective — where they allow, for example, for the calculation of damages — but also from a psychological perspective. For a valuation of climate harm — likely to be so very vulnerable to intuitive distortion — these benefits may be considerable.

18Daniel Kahneman, Thinking: Fast and Slow (Farrar, Straus & Giraux 2013).

19Arden Rowell, ‘Quantitative Valuation in Environmental Law’ (2021) 96(4) Notre Dame Law Review 1539.

This is not to say that quantification of climate harms is a panacea. It is, of course, costly and complicated to develop quantified (and/or monetized) estimates of climate harm — costs and complexities that are only increased by the psychological challenges of the task. And the psychological impact of systemization can only go so far; System II thinking reduces the impact of heuristics and many biases but does not somehow transcend the limitations of human thought; phenomena such as motivated cognition may well still operate.20 Furthermore, it is clearly the case that some object to quantification — or even more, monetization — on philosophical grounds. Indeed, putting any explicit quantified — much less monetary — value on environmental harm, or on important impacts of climate change such as the loss of human life, is repugnant to many.21 For these people, the choice to monetize climate damages at all is a questionable ethical choice in itself. Not everyone ascribes to this view, of course; defenders of the ethics of monetization have suggested in the past that the practice is ethically appropriate because public policymakers’ decisions impact important risks — including mortality risk and risk to the environment — whether they explicitly monetize those risks or not.22 On this view, policymakers who refuse to explicitly monetize nevertheless implicitly value risks in money when they assign (or fail to assign) public or private resources to address those risks. In this sense, the choice is not between monetizing mortality (or environmental) risks or not, but rather between monetizing them implicitly or explicitly — and explicit valuation has important democratic23 and deliberative benefits.24

20Dan Kahan, ‘Ideology, Motivated Reasoning, and Cognitive Reflection’ (2013) 8(4) Judgment and Decision Making 407.

21Frank Ackerman and Lisa Heinzerling, Priceless: On Knowing the Price of Everything and the Value of Nothing (New Press 2004); Frank Ackerman and Lisa Heinzerling, ‘Pricing the Priceless: Cost-Benefit Analysis of Environmental Protection’ (2002) 150 University of Pennsylvania Law Review 1553.

22Cass Sunstein, Risk and Reason: Safety, Law, and the Environment (CUP 2004); Cass Sunstein, ‘The Limits of Quantification’ (2021) 102(6) California Law Review 1369.

23Cass Sunstein, Laws of Fear: Beyond the Precautionary Principle (2005).

24Sunstein, Risk (n 22); Matt Adler and Eric Posner, New Foundations of Cost-Benefit Analysis (Harvard University Press 2006).

— S. 71 —

What does an understanding of the psychology of climate harms add to this debate? Mostly, an additional reason to value the process of systemization that quantification requires. This does not mean, of course, that qualitative approaches to climate harm must always be rejected for every and all circumstances. It does mean, however, that any rejection of quantified approaches — including those based upon ethical grounds — must be strong enough to tolerate the increased psychological hazards of reliance on more intuitive methods.

a.The Impact of Quantification Methods on “How Much” Climate Harm is Valued

Quantifying climate harms may act as a partial tonic to some intuitive distortions in the valuation of climate harm. It also, importantly, allows for the tracking of the impact of others, and for identification of where and how different choices and methods in valuation can predictably affect the substance of that valuation. Indeed, past research on quantified valuation suggests that there are several methodological choices that will predictably drive apparent quantified value up or down.25 Consider, on this front, this abbreviated “guide”:26

Choices that Predictably affect Valuations of Climate Impacts Methods that Drive Valuations UP Methods that Drive Valuations DOWN

—Increase scope (spatial scope, time — Decrease scope (spatial scope, time

period of interest, and/or number of period of interest, number of targeted targeted goods). goods).

—Adopt a low discount rate. — Adopt a high discount rate.

—Elicit people’s willingness to accept — Elicit people’s willingness to pay for

climate losses. climate gains/improvements.

—Emphasize scarcity and uniqueness, — Dampen perceived scarcity and unique-

as well as perceived ties to identity. ness and ties to identity.

These factors can be used as tools for advocacy — by individuals or states wishing to make climate harms seem larger or smaller — or as tools for understanding, as for explaining how it is that different aspects or approaches to climate harms may generate substantially different (quantified) valuations.

How much does it matter that perceived climate harms may be substantially impacted by the methods used to measure them? Past research on quantitative valuation in environmental law suggests that environmental valuations — including climate valuations — are used in several different ways within — S. 72 —environmental law and policy.27 Different uses pose different methodological and informational needs, and are differently sensitive to small changes in either; this means that, depending upon the purpose to which a valuation is put, there will be more or less payoff for engaging with the methods of valuation. More particularly, this research suggests that quantified valuations are routinely used in at least three different ways:28

25Rowell, ‘Valuation’ (n 19).

26This guide is adapted from ibid. 1549.

1.to inform damage calculations (such as the calculation of the contributions to and disbursements from a loss and damage fund such as the one in scenario 4, or the calculation of damages such as in scenario 8),

2.to inform stringency (such as whether the next step in mitigation is justified/should have been required, as in scenario 5), and

3.to determine status or whether a threshold has been reached (such as whether state action to prevent climate harm was “adequate,” as per scenario 1/KlimaSeniorinnen; the yes/no determination of whether a state has been “specially affected” sufficiently to ground standing, as per scenario 7; or whether an absolute principle such as the “no harm” principle has been violated, as per scenario 10).

Of these uses, calculation of damage calculations is the most consistently sensitive to changes in valuation approach and method, because any change in quantified value will change the quantity of damages calculated. Such changes will be scalar, however, rather than discontinuous. The opposite is true for uses of valuation that inform stringency or status determinations. For these uses, whether a change in valuation methodology has a legal impact will depend upon whether the difference between methods justifies either a “jump” to a higher level of stringency or exceeds the threshold necessary to grant status. Attention to the way that a valuation is used may therefore pay dividends: in some cases, and for some uses, the choice of valuation method may change what the law requires.

When it comes to the quantitative valuation of climate harms, then, this research suggests that an important first step in trying to develop a quantitative valuation is to be clear about the purpose for which it will be used — as well as the sensitivity of that purpose to various valuation estimates. This can help match legal decisions with the level and specificity of valuation that is needed. This is helpful both in ensuring that more resources are not invested in quantitative valuation than are needed, and in ensuring that consequential legal decisions also do not rest on insufficiently specific valuations.

27Ibid.

— S. 73 —

4.Quantitative Climate Valuations in the US — the Social Cost of Carbon

The above section argued that adoption of quantified estimates of climate harms can be psychologically valuable by encouraging development of reflective, non-intuitive decision-making. That said, quantification can in practice also generate psychological and ethical issues of its own, especially where quantified estimates are transferred across legal and ethical applications. On this front, the US experience regarding quantification of climate harms is potentially useful for several reasons. First, it illustrates a way that litigation has significantly changed climate law and policy (in the United States specifically, though with some relevance to the rest of the world) by requiring that US government agencies account for climate harms in their policymaking. Because US government agencies have been legally required to account for climate harms, and because of US executive policy that requires those harms to be quantified and monetized, the US has invested substantial resources in calculating its quantified and monetized estimate of (global) climate harms. The resulting calculation — called the “Social Cost of Carbon” (SCC) or, occasionally, the “Social Cost of Greenhouse Gases” — is a seemingly helpful starting point for other legal decision-makers when they seek either a monetized estimate of (global) climate harm, or ideas for methods for calculating such estimates. That said, the specific ethical choices that were made to calculate the SCC can be instructive about the ethical decisions that underlie valuations of climate harm. This latter point is particularly important insofar as it illustrates that transferring quantified/monetized estimates of climate harm, such as the US’s SCC, necessarily import the ethical choices that underlie them into any new analysis into which they are brought. This may or may not be ethically and legally appropriate, and should at least be done knowingly rather than accidentally.

a.The US Social Cost of Carbon as a Quantified and Monetized Estimate of (Global) Climate Harm

The SCC is a standardized, monetized estimate of the harm caused by each incremental emission of a ton of carbon dioxide, and it is routinely used by US government agencies to inform policymaking in light of climate change. The SCC was first calculated in response to a 2007 legal case — Center for Biological Diversity v. National Highway Traffic Safety Administration — which held that it was illegal (arbitrary and capricious) for US agencies to ignore the climate impacts of their actions (even while monetizing the costs and benefits — S. 74 —of other impacts).29 To avoid having further regulatory actions overturned, then-President Obama directed the creation of an Interagency Working Group (IWG), and told them to calculate a “Social Cost of Carbon” based on the best available science.30 Notably, because this calculation is understood to be judicially required to satisfy US administrative law requirements, it — unlike much of US climate law and policy — is not entirely subject to changes in the US Presidency. During President Trump’s first administration, for example, agencies were still required to use an SCC when quantifying the impacts of proposed government actions31— though the methods for monetization were “adjusted” (for example, by being limited to domestic climate impacts, as discussed in some further detail below) to accord with the ethical/political preferences of the administration. When President Biden’s administration took over, he then returned calculation of the SCC to his preferred methods (eg by returning to the Obama-era policy of accounting for the global impacts of climate change).32

Under the Biden administration, estimates for the SCC ranged from USD 51/ton (by the IWG) to USD 190/ton (under the US Environmental Protection Agency).33 Historically, the monetized value has ranged even further, falling from as low as USD 3/ton (under the first Trump administration).

From the perspective of an international audience interested in the relationship between litigation and the valuation of climate harm, the SCC is an interesting example of an unusual (but still potentially important) type of litigation impact. Where a monetized estimate of the harm caused by each incremental emission of a ton of carbon dioxide is desired for judicial or other purposes, moreover, the US government’s calculation of the SCC can at least seem to be a valuable starting point. The US SCC calculations have, for example, been used by Canada, Germany, the United Kingdom, and Israel in various legal contexts.34 International uses and applications should, however, — S. 75 —be made while being aware of the ethical choices that are imbedded within the SCC’s calculation (as discussed in more detail below).

29Center for Biological Diversity v National Highway Traffic Safety Administration 538 F.3d 1172 (9th Cir 2008).

30Interagency Working Group on Social Cost of Carbon, ‘Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866’ (2010).

31Executive Order 13783 (28 March 2017).

32IWG, ‘Technical Support Document: Social Cost of Carbon, Methane, and Nitrous Oxide’ (February 2021).

33EPA, ‘Report on the Social Cost of Greenhouse Gases: Estimates Incorporating Recent Scientific Advances’ (November 2023).

34See eg Environment and Climate Change Canada, ‘A Healthy Environment and a Health Economy: Canada’s Strengthened Climate plan to Create Jobs and Support People, Communities, and the Planet’ (2020); The Israel Democracy Institute and the Minister of Environmental Protection, ‘Carbon Pricing in Israel’ (2022); German Environment Agency, ‘Methodological Convention 3.0 for the Assessment of Environmental Costs’ (2019).

b.Ethical Choices Inside Valuations of Climate Damage

Any valuation of climate damage used in any context — including in litigation — rests upon a determination of multiple ethical questions, including the appropriate temporal and geographic scope for the valuation (eg national or international), as well as multiple distributional questions such as how to account for the harms to old versus young, foreign versus domestic, and wealthy versus poor.35 Although such choices can be implicitly imbedded into qualitative measures of climate harm (and thus may be difficult to disentangle from other qualitative concerns), they can be explicitly identified and traced when incorporated into quantified and monetized estimates of harm such as the SCC.36 To show how such ethical choices are imbedded into valuations, this section therefore focuses upon how several such choices impact monetized valuation in the SCC. The main takeaways of this section are twofold: first, that it is important to be aware of the ethical choices that undergird climate valuations, whether quantified and monetized or not; and second, that use of a valuation such as the SCC imports whatever ethical choices were used inside of its calculation.

A few examples of the types of important ethical puzzles imbedded in (monetized) valuations may be useful. Consider, on this front, the decision of how much money to assign as a monetary “value” concomitant to the loss of a human life. (Set aside — for the moment — objections to monetization; here we are thinking of “how” to do this, and the choices imbedded in that, rather than “whether.”) The typical economic method used in the US for this is called the “Value of a Statistical Life,” or VSL, and relies upon calculating how much money people are expected to exchange — in fact, be “willing to pay” — to reduce their own chances of dying by a small increment, for example 1/10,000.37 This number is then multiplied out to give an average amount of money that — S. 76 —people would pay, in aggregate, to prevent the loss of one life. (The US government typically uses a figure of about 10 million USD, based upon a series of studies, mostly of US workers.) US government agencies then use these figures to determine questions like how stringent environmental protections must be to be “cost-justified.” If 10 lives would be saved by a regulation, regulators apply the USD 10 VSL to determine that that would be equivalent to a USD 100 million regulatory benefit.

35Arden Rowell, ‘Ethical Choices Inside Regulatory Cost-Benefit Analysis’ (2021) 19 The Georgetown Journal of Law and Public Policy 693.

36Arden Rowell, ‘Foreign Impacts and Climate Change’ (2015) 39 Harvard Environmental Law Review 371; Arden Rowell and Lesley Wexler, ‘Valuing Foreign Disasters in International Environmental Law’ in Jacqueline Peel and Davis Fisher (eds), Role of International Environmental Law in Disaster Risk Reduction (Koninklijke Brill 2016) 248.

37Kip Viscusi, Pricing Lives: Guideposts for a Safer Society (Princeton University Press 2018).

Readers may already be thinking of the ethical choices involved in calculating and applying such a number. There are many.38 To flag a few, however: whose lives are being valued? Do future generations have the same “value” as the lives of those living today?39 Is there a difference in the “value” of saving an elderly life, or a child’s life?40 Is there a difference in the value of saving the life of a poor person or a wealthy one (and if so, for which person should more resources be expended)?41 Should the same “value” apply regardless of whether lives saved are within a state’s borders — or those of an allied state?42 What about for lives within an enemy state?43

Climate change can be expected to cause significant loss of life; as a result, valuations of climate harm will typically include some valuation of lives. But similar questions arise when it comes to ecological harm. Consider, on this front, the question of “national” versus “international” valuations of harm. Should valuations of climate damage value harm differently depending upon where — within which political borders — the harm accrues?44 Are lives, or ecological damage, differently “valuable” depending upon where they are at threat? Are there uses or applications where nations are justified in valuing domestic harms differently than international or “foreign” ones — for example, when it comes to determining the cost-effectiveness of adaptation strategies, or to allocate domestic resources?

38Rowell, ‘Choices’ (n 35); Daniel Hemel, ‘Regulation and Redistribution with Lives in the Balance’ (2022) 89(3) The University of Chicago Law Review 651.

39Arden Rowell and Cass Sunstein, ‘On Discounting Regulatory Benefits: Risk, Money, and Intergenerational Equity’ (2007) 74(1) The University of Chicago Law Review 171; Richard Revesz, ‘Environmental Regulation, Cost-Benefit Analysis, and the Discounting of Human Lives’ (1999) 99(4) Columbia Law Review 941; Rowell, ‘Choices’ (n 35).

40Symposium: Mortality-risk Valuation and Age (2007), Review of Environmental Economics and Policy.

41Rowell, ‘Choices’ (n 35).

42Arden Rowell and Lesley Wexler, ‘Valuing Foreign Lives’ (2014) 48(2) Georgia Law Review 499; Rowell and Wexler, ‘Valuing Foreign Disasters’ (n 36).

43Rowell and Wexler, ‘Valuing Foreign Lives’ (n 42).

44Rowell, ‘Impacts’ (n 36); Rowell and Wexler, ‘Valuing Foreign Lives’ (n 42); Rowell and Wexler, ‘Valuing Foreign Disasters’ (n 36).

— S. 77 —

These are not merely rhetorical questions. They are questions that must — implicitly or explicitly — be answered in any scheme that attempts to value climate harms, whether qualitative or quantitative. And even quantitative aggregate measures, such as the SCC, can imbed the answers to these questions in ways that may be difficult for even savvy decision-makers in other jurisdictions and fields to detect.45

To see how this can work, consider what may be the most “obvious” way that the SCC makes an ethical decision: in deciding whether to include foreign impacts in its calculation, or whether to only estimate the harms of climate change to the United States.46 This was the primary difference between the executive policies of Presidents Trump and Obama/Biden — and was primarily responsible for the difference between Trump’s SCC estimates (as low as USD 3/ton) and Obama-era estimates of about USD 43/ton. (It is also a large enough difference that it was the primary justification Trump’s EPA gave for reversing Obama’s primary domestic action on climate change mitigation, the Clean Power Plan.)

Other imbedded ethical choices are even less obvious, however. In addition to varying based upon whether domestic-only or global harms were calculated, the SCC also imbeds choices about discount rate as well as the relative value of future and present lives (assuming that future lives are equally valuable to present ones, but that the present value of future life-saving declines according to the discount rate with how far out into the future the life is saved);47 that old and young lives are equally valuable; and that it is appropriate to “adjust” the value of a statistical life according to the wealth of the nation where the life is lived or lost, so that less monetary value is attached to poor lives than wealthy ones.48 These are important ethical choices that should be controversial, and it is important that they not be treated casually, or adopted unknowingly.

Again, it is worth recognizing that any form of aggregate valuation of climate harm will have to address similar (if not identical) ethical choices. That the SCC was quantified and monetized makes it possible to identify these choices — even when they were not explicitly or perhaps consciously addressed by those who were doing the valuing. But the fact that it may be possible to identify the ethical choices imbedded in monetized valuations of climate change does not mean that it is immediately apparent what those choices are, or that transferring those choices to other legal applications is necessarily appropriate.

45Rowell, ‘Choices’ (n 35); Rowell, ‘Impacts’ (n 36).

46Rowell, ‘Impacts’ (n 36).

47Rowell and Sunstein, ‘Discounting’ (n 39); Rowell, ‘Choices’ (n 35).

48Rowell, ‘Impacts’ (n 36); Rowell, ‘Choices’ (n 35).

— S. 78 —

At the least, it is important for legal decision-makers to ask what ethical choices underlie the valuations of climate change on which they rely. In the case of qualitative valuations, those ethical choices may be especially obscure — but even with quantitative valuations, it may require a technical analysis to uncover and understand what ethical choices are imbedded.

5.Conclusion

To be effective, climate reparations law must recognize and grapple with the psychology of climate harms generally, and the psychology of loss and damage specifically. Intuitive estimates of the harm caused by climate change are likely to systematically underestimate that harm, especially where the harm is estimated by the perpetrator of that harm. Where the law fails to address psychological underestimation of climate harms, it can generate insufficient response to climate change; inadequate and unjustly low compensation of damage to those who are harmed; and even failure to protect human rights. One important possibility for addressing intuitive underestimation of climate harms is to move towards deliberative quantitative estimates of harm. While quantitative estimates offer psychological benefits, however, they should be adopted mindfully so that they do not obscure the ethical choices imbedded in their estimation.

Quelle: suigeneris-verlag.ch · Reparation for Climate Change: The Successes…