When considering the essence of law, it becomes evident that its fundamental purpose is to safeguard our safety and well-being. However, amidst the many challenges facing humanity, the law has fallen short in shielding us from one of the gravest threats to our lives and way of life – climate change. In a new thought-provoking piece, Climate Change as Unjust Enrichment, Maytal Gilboa, Yotam Kaplan, and Roee Sarel (hereafter referred to as GKS) offer a glimmer of hope. Where international treaties, regulations, and tort law have faltered, GKS propose harnessing the oft-forgotten doctrine of unjust enrichment as a means to rescue us from the dire consequences of climate change.
Climate change, aptly dubbed the “super wicked” problem, presents an overwhelming challenge. Its impacts include severe food crises, water scarcity, rampant infections, increased rainfall and flooding, and escalated violence, among other dire consequences. Moreover, the complex nature of climate change’s harms, distributed across vast populations and with long-term effects, poses formidable barriers to effective intervention.
Why does humanity persist on this perilous course? GKS’s answer to this question lies in a twofold reality. Firstly, powerful commercial actors reap immense benefits from activities contributing to climate change. Secondly, existing legal frameworks have proven inadequate in curbing their actions. GKS propose employing the law of unjust enrichment to ensure that polluting ceases to be a profitable endeavor.
Climate stability, the antithesis of climate change, represents a public good. However, markets tend to under-supply public goods, necessitating public authorities’ intervention to safeguard the collective interest. Measures at the national and international levels may include enforcement through criminal law, subsidizing private litigation, imposing production taxes, or directly regulating polluters’ actions. In their paper, GKS shed light on the failures of international efforts, country-level regulations, and, disappointingly — for me at least as a tort scholar — tort law in combatting climate change.
Let us start at the international level. Despite numerous attempts since the 1972 world conference on the environment, including the 1997 Kyoto Protocols, the 2016 Paris Agreement, and the 2021 Glasgo Climate Pact, the international community has failed to reach consensus and devise an effective legal and policy response to the climate crisis.
Domestic regulations have not fared well either. The Environmental Protection Agency’s efforts to reduce greenhouse gas emissions in the United States have proven insufficient to fulfill the nation’s climate obligations. Public choice theory explains the limitations of national regulatory frameworks, because the pursuit of individual welfare often clashes with optimal policies due to interference from private interest groups. Additionally, future generations lack political representation, leading to a regulatory preference for permitting immediate gains over avoiding future harms.
We are left with tort law, which on the surface may seem a suitable framework for climate litigation, enabling those harmed by climate change to sue the responsible parties. However, tort law also has its complexities. Polluters contributing significantly to global warming may not necessarily breach specific legal duties or regulatory standards. Moreover, tort liability requires proof of harm and causation, a daunting task when climate change’s effects result from the combined actions of multiple actors, spread over large populations, and extended into the distant future.
Sadly, even when scientists generally agree that manufacturing activities contribute to global warming, pinpointing the exact contribution of each emitter to the global processes remains challenging. Proposals for more relaxed theories of causation in climate litigation have faced controversy among tort scholars. One of these proposals, put forward by Ronen Perry and Yehuda Adar, was reviewed here last year.
Given the failures of international treaties, regulations, and tort law, can the law still shield us from climate change? GKS assert that unjust enrichment may hold the key to the solution. The core insight is straightforward: while the harms of global warming are future and abstract, profits from polluting activities exist in the present and are easier to identify and quantify. Therefore, utilizing the doctrine of unjust enrichment, society must develop legal tools to ensure that contributing to global warming ceases to be a profitable venture.
To apply the unjust enrichment doctrine, plaintiffs need to demonstrate (1) a benefit, (2) that this benefit is unjust, and (3) that it was obtained at their expense.
GKS illustrate that in some restitutionary claims, a defendant’s enrichment can be deemed “unjust” when acquired through wrongdoing, such as securities fraud, patent or copyright infringements, breach of contract, or criminal acts. In the context of climate change, GKS outline three categories of cases where polluters’ wrongdoing can give rise to an unjust enrichment claim: violation of environmental regulations, environmentally unreasonable conduct constituting a tort of gross negligence, and malicious circumvention of regulatory efforts or deceptive practices.
But recall that a major deficiency of tort law is its impotence in cases where defendants commit no wrong. Perhaps the biggest contribution by GKS is their attempt to tackle these situations. GKS provide doctrinal and theoretical explanations that justify liability in unjust enrichment even when no duty has been breached, but the defendant gains an undeserved windfall.1
GKS propose that a defendant’s enrichment be considered unjust, even without wrongdoing, under specific conditions that collectively signify disproportional enrichment through polluting activities: (1) the defendant significantly contributes to climate change, (2) the activity is highly profitable, and (3) the defendant benefits disproportionately more than others from this activity, meaning that the overall gains of the activity are disproportionately concentrated with the defendant.
This proposition raises intriguing possibilities, and one hopes that GKS will apply their framework to real-life scenarios, particularly existing case law, in future research. Among other things, I think more work is needed about how to identify which polluters must disgorge profits and how to quantify what they must disgorge. Moreover, GKS use as their prime example oil companies making enormous profits and emphasize the need to deter their conduct, thus treating them as wrongdoers; but this is too easy, at least as compared to GKS’s bolder argument that even if no wrong is committed, unjust gains should be disgorged. Indeed, the implications of the latter argument are quite dramatic. Should all manufacturers of nonelectric cars have to disgorge their profits? All companies that facilitate the consumption of meat? All airlines?
In the concluding segment of their paper, GKS explore potential plaintiffs for these unjust enrichment claims. Private plaintiffs, including neighbors of major polluters, can file individual or even aggregate claims, with a significant portion of awarded damages allocated toward environmental protection goals. This not only ensures justice but also deters defendants from contributing to global warming. Alternatively, public plaintiffs, such as state attorneys (historically using unjust enrichment claims for the public good) and NGOs advocating for the public interest or the environment itself, can also bring such claims. In some countries such as New Zealand, India or Ecuador, legal standing for natural resources as legal entities has emerged, further expanding the avenues for seeking justice.
In sum, GKS are not the first ones to offer the use of unjust enrichment to combat climate change, but they make an important contribution to the literature by rigorously demonstrating the application of the principle to climate litigation. To me at least this seems like a just application of unjust enrichment.
- Though some general harm may need to be shown to meet the “injustice” requirement, the core of the unjust enrichment doctrine lies in demonstrating the defendant’s disproportionate benefit from the activity.
