What did they know, and when did they know it? The municipal climate litigation, the fossil-fuel industry, and the municipal bond market

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Event Summary

Tuesday at AEI, experts discussed the lawsuits several municipalities have filed against major fossil-fuel producers and the underlying implications for the municipal bond market.
Niskanen Center’s David Bookbinder argued that ExxonMobil’s claim of certain municipal bonds not disclosing information about the risk of climate change is unsubstantiated by pointing to cases in which a municipal bond disclosure cites a study on predicted effects of climate change. He also stated that the bond price history suggests that investors do not believe the disclosures are inaccurate. Andrew Grossman from BakerHostetler raised the questions on the jurisdiction and enforceability of the recently filed cases, explained the weaknesses of the cases’ public nuisance claims, and stated that these lawsuits implicate policy decisions that can be made only by the political branches.

Climate Institute’s Michael MacCracken demonstrated that the frequency and intensity of many warm-side extremes are increasing and cautioned that infrastructure has to be adapted to the changing environment. Cato Institute’s Patrick J. Michaels expressed skepticism toward models predicting rapid climate change and showed evidence supporting that extreme weather has not become more frequent.
Wilmington Trust Investment Advisors’ Stephen Winterstein stressed the institutional investors’ reliance on disclosure regarding municipal bonds and cited a study concluding that better disclosure correlates with lower borrowing costs.

— Hao-Kai Pai

Event Description

Several municipalities have filed lawsuits against major fossil-fuel producers, arguing that they are responsible for increasing atmospheric concentrations of greenhouse gases; that they have known for years the climate dangers of that trend; that they are responsible for extreme climate effects and weather events past, present, and future; and that they should bear the financial costs of adaptation and the damage caused by specific weather impacts. However, the disclosure statements accompanying the municipalities’ bond offerings are far less specific about the potential damage from such extreme weather and the resulting implications for their respective tax bases — that is, their future ability to service their debts.

Join AEI as an expert panel addresses the legal and scientific issues this litigation raises, as well as the underlying implications for the municipal bond market.

Join the conversation on social media by following @AEI and @AEIecon on Twitter and Facebook.



1:15 PM

1:30 PM
Benjamin Zycher, AEI

1:35 PM
Panel discussion and presentation

David Bookbinder, Niskanen Center
Andrew M. Grossman, BakerHostetler
Michael MacCracken, Climate Institute
Patrick J. Michaels, Cato Institute
Stephen P. Winterstein, Wilmington Trust Investment Advisors

Benjamin Zycher, AEI

3:05 PM

3:30 PM

Event Contact Information

For more information, please contact Isabelle Staff at [email protected], 202.862.5885.

Media Contact Information

For media inquiries or to register a camera crew, please contact [email protected], 202.862.5829

David Bookbinder is the chief counsel at the Niskanen Center. He began practicing law at Paul, Weiss, Rifkind, Wharton & Garrison, where for many years he handled securities, mergers and acquisitions, product liability, white-collar criminal, intellectual property, and other matters. In the public interest sphere, he has litigated dozens of cases under all the major environmental statutes including, as Sierra Club’s chief climate counsel, initiating and managing Massachusetts v. EPA. Dealing with Congress and federal agencies, Mr. Bookbinder helped lead efforts on both global warming legislation and greenhouse gas regulation under the Clean Air Act and has testified in front of House and Senate committees on these issues. He has also advised states as to their greenhouse gas regulatory authority. Mr. Bookbinder was trained at Princeton University (summa cum laude) and the University of Chicago Law School.

Andrew M. Grossman is a partner in the Washington, DC, office of Baker & Hostetler LLP, where he practices appellate litigation; an adjunct scholar at the Cato Institute; and cofounder of the Free Speech in Science Project. As a litigator, he has served as counsel in many high-profile cases raising significant issues of federal authority, the constitutional separation of powers, and individual rights. As a scholar, he has written widely on law and finance, bankruptcy law, administrative law, and the constitutional separation of powers, and he is a frequent adviser to members of Congress on complex legal and policy issues, particularly concerning constitutional limitations on federal power. He has testified numerous times before both the House and Senate judiciary committees. In addition to articles in journals and professional publications, Mr. Grossman’s legal commentary has appeared in dozens of newspapers and periodicals, including The Wall Street Journal, USA Today, The Washington Post, and Los Angeles Times. He is also a frequent commentator on legal issues on radio and television, having appeared on Fox News Channel, CNN, MSNBC, CNBC, NPR and its affiliates, CBN, and elsewhere. Mr. Grossman is a graduate of Dartmouth College, the University of Pennsylvania’s Fels Institute of Government, and the George Mason University School of Law. He clerked for Judge Edith Jones of the US Court of Appeals for the Fifth Circuit.

Michael MacCracken has been volunteering as chief scientist for climate change programs with the Climate Institute in Washington, DC, since retiring from the University of California’s Lawrence Livermore National Laboratory (LLNL) in 2002. His current research interests include human-induced climate change and consequent impacts, climate engineering, and the beneficial effects of limiting emissions of non-CO2 greenhouse gases. From 1968 to 1993 he led studies at LLNL using computer models to evaluate the climatic effects of volcanic aerosols, land-cover change, nuclear war, and the increasing CO2 concentration. From 1993 to 1997, he served as the first executive director of the interagency Office of the US Global Change Research Program and then from 1997 to 2001 as executive director of the National Assessment Coordination Office for the first national US climate impacts assessment. He has also served as president of the International Association of Meteorology and Atmospheric Sciences (2003–07) and as an integration team member for the Arctic Climate Impact Assessment (2002–04). His legal declaration on standing based on the impacts of climate change on the United States was cited favorably by Justice Stevens in his majority opinion in the April 2007 landmark US Supreme Court decision of Massachusetts et al. v. EPA; since that time he has submitted legal declarations on roughly a dozen cases. Dr. MacCracken has an undergraduate degree from Princeton University and a Ph.D. from the University of California, Davis.

Patrick J. Michaels is the director of the Center for the Study of Science at the Cato Institute. He is a past president of the American Association of State Climatologists and was program chair for the Committee on Applied Climatology of the American Meteorological Society. He was a research professor of environmental sciences at the University of Virginia for 30 years. Dr. Michaels was a contributing author and is a reviewer of the United Nations Intergovernmental Panel on Climate Change, which was awarded the Nobel Peace Prize in 2007. His writing has been published in major scientific journals, including Climate Research, Climatic Change, Geophysical Research Letters, Journal of Climate, Nature, and Science, as well as in popular serials worldwide. He is the author or editor of eight books on climate and its impact, and he was an author of the climate “paper of the year” awarded by the Association of American Geographers in 2004. He has appeared on most of the worldwide major media. Dr. Michaels holds A.B. and S.M. degrees in biological sciences and plant ecology from the University of Chicago, and he received a Ph.D. in ecological climatology from the University of Wisconsin–Madison in 1979.

Stephen P. Winterstein is the chief municipal strategist and managing director of research at Wilmington Trust, with three decades of municipal fixed income portfolio management, trading, and research experience. He is responsible for establishing the municipal bond portfolio management and research processes. He also sets municipal bond strategy for the firm’s institutional and individual clients. Most recently he was managing director of municipal fixed income with PNC Capital Advisors LLC in Philadelphia for more than 12 years. Mr. Winterstein is the 2016 recipient of the National Federation of Municipal Analysts Industry Contribution award. In 2017, for the third consecutive year, he was elected to Smith’s Research & Gradings Municipal All-Star Team in the category of Municipal Strategist. He is a member of the board of governors for the National Federation of Municipal Analysts; a member of the advisory committee for the Brookings Institute’s Hutchins Center on Fiscal and Monetary Policy Annual Municipal Finance Conference; a member of the board of directors and membership chair for the Municipal Analysts Group of New York; a delegate of the S&P Municipal Bond Indices working group, which consists of several industry leaders who provide guidance on municipal index rules, structure, and product development; co-chair of the technical advisory committee for Municipal Bonds for America; an active member of the Investment Company Institute’s municipal securities advisory committee; president of the Philadelphia Area Municipal Analyst Society; and a member of the board of governors of the Bond Club of Philadelphia. He holds an M.B.A. from Lehigh University and B.A. in economics from Millersville University.

Benjamin Zycher is a resident scholar at AEI, a senior fellow at the Pacific Research Institute, a member of the advisory board of the quarterly journal Regulation, and a contributor to The Hill. He specializes in energy and environment policy, has testified before congressional committees numerous times, and has a lengthy list of publications in academic, policy, and media outlets. He was formerly an associate in the Intelligence Community Associates program of the Office of Economic Research, Bureau of Intelligence and Research, US Department of State; a senior fellow at the Manhattan Institute for Policy Research; a senior economist at the Rand Corporation; a member of the board of directors of the Western Economic Association International; an adjunct professor of economics at the University of California, Los Angeles; an adjunct professor of economics and business at the California State University, Channel Islands; a vice president for research at the Milken Institute; the founding editor of the quarterly public policy journal Jobs & Capital; a senior staff economist at the President’s Council of Economic Advisers; and a member of the advisory board of Consumer Alert. He holds a Ph.D. in economics from the University of California, Los Angeles, and a master of public policy from the University of California, Berkeley.

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