Polluting firms must factor in climate litigation risk, says Dr. Friederike Otto

COP28 in Dubai saw a breakthrough with the operationalisation of a Loss and Damages fund to tackle climate change, with Friederike Otto, a pioneer in rapid weather attribution, recognised for her work.

“It’s the beginning of the end,” the U.N. Climate Change’s Chief, Simon Stiell, announced in the closing minutes of COP28 in Dubai, while admitting that it did not “fully turn the page on the fossil fuel era.”

The major fossil fuel-producing and burning countries are not obliged to start cutting emissions immediately. But big polluters, both firms and countries, are being increasingly held to account. This is being seen in two relatively new areas in a warming world. These are loss and damages due to the effect of climate change (the climate conference saw a breakthrough with the operationalisation of a Loss and Damages fund to which $792 million have been pledged and more expected) and climate litigation. 

Connecting financial losses to climate change is a new science of attribution of weather events and one of its pioneers, Friederike Otto, was at COP28. In an interview to this writer, Dr. Otto said, “If we hadn’t done attribution at the scale we are doing and so many studies, we would probably not have Loss and Damage as set prominently now in the negotiations, because when we started doing this work, it was still that people said, oh, you can’t attribute individual weather events to climate change. We have shown again and again and again that you can. And, I think that that has played an important role to make Loss and Damages more prominent.”

Dr. Otto’s areas of specialisation and work are rapid weather attribution, which means to identify how much extreme weather was made more likely because of global warming; currently, the global average temperature is about 1.2° celsius warmer than the pre-industrial times. For instance, Dr. Otto’s group, World Weather Attribution (WWA), found April 2023’s heatwave in India and Bangladesh to be 30 times more likely due to human-induced climate change. Dr. Otto has been recognised for her work in 2021 by the Time magazine’s list of 100 of the world’s most influential individuals and by the journal Nature as one of the top 10 people who made a difference to science the same year. 

Calling for a task force to pin accountability, Dr. Otto points out that major polluters and producers of fossil fuels have given little to the new Loss and Damages fund. Germany and hosts, UAE pledged $100 million each and the biggest historical polluter, the United States, just $17.5 million. 

“If we had a task force on impacts, then, the methods that we have developed in attribution would obviously play a big role in how we could measure this. Because, at the moment, we have the situation that we have a loss and damage fund, and then a country like the UAE or Germany puts $100 million in and celebrates themselves [on] how generous and amazing they are. But, when you would actually look at the comprehensive assessment of the losses that we have and that are [there] because of climate change, you would see that that is way too little money to get anywhere near what climate change is actually costing. So, just as an example, the Pakistan floods last year alone cost $40 billion, and that was one event.”

An analysis of over 100 climate-change lawsuits found that a filing or unfavourable court decisi n reduced a firm’s value by 0.41%. Lawsuits have been filed against big polluters, so-called ‘carbon majors,’ including Exxon, Shell and Volkswagen. The report says litigation is on the rise and is here to stay.