Disruption of Earth’s climate system is a physical phenomenon, not a theoretical one. Disruption of the climate system is happening, now, in real time, in all regions. It is caused by specific chemical compounds that trap heat, the so-called “greenhouse effect”. Already costs are spiraling to unthinkable levels: 

• Over the 10 years 1980-1989, the United States spent roughly $220 billion on disasters costing $1 billion or more.
• Between mid 2024 and January 2025, the US experienced at least two disasters that will cost more than $250 billion apiece.

More evidence has been gathered and analyzed with regard to this question than to any other in human history. Tens of thousands of serious scientists have provided that evidence and analysis, and the world’s highest court has found that nations have a legal obligation to act to reduce climate risk and harm. 

In the United States, the First Amendment makes it unlawful to abridge the right to seek redress for grievances. This means even if Congress were to pass a law purporting to shield polluters from liability, that law would likely be deemed unconstitutional by federal courts—if not right away, then eventually, as it would violate the clear letter and meaning of the First Amendment. 

This is important for future planning of business operations, business-related policy advocacy, and for risk mitigation strategies across industries. More and more localities will be hit with unaffordably costly disasters made worse by global heating pollution (GHP). GHP is adding cost across sectors, across societies, and across regions; in many, if not most cases, affected parties will be entitled to public support and will have standing to pursue damages. 

The more aggressively a firm goes about pursuing revenues linked to global heating pollution, the more evident it will be that the firm was preparing for a carbon bubble moment, and trying to stock up on funds that might pay for GHP liability. Active campaigning to undo climate crisis response, climate science, and climate-resilient development policies, will also serve as evidence of responsibility for related harm.

Pollution liability is not a political question; it is a question of how and when that liability turns into material cost. Firms that act as if that liability should not be a concern now are effectively gambling that they will be able to outrun pervasive market change, when it comes, as late as possible. Investors, and financial institutions, including governments that issue subsidies, should all be looking for evidence of real-world preparation for that kind of eventual high-pressure moment of rapid change.

Climate pollution liability is linked not only to geophysical impacts and related harm and cost to third parties; it also links to questios of policy change, cost of capital, insurability, and the risk of a sudden dropoff in projected market value, as economies shift to clean technologies. These are sometimes called transitional risks, but they include a wide variety of economic and financial risks, including risk of falling behind technologically. 

Whole nations face pollution liability risks as well—again, not only from potential litigation or other court proceedings, but from the potential disappearance of affordable capital, insurance, and financial services. More effective pricing of pollution-related risk is essential, to ensure pollution-dependent companies, governments, and national and local economies, can plan for an optimal economic future. 

With fiscal stability risks getting worse, and pollution-related risks increasingly difficult to avoid, subsidies that prioritize polluting practices are likely to undergo significant rapid change. The International Monetary Fund already finds subsidies for polluting fuels (which cost $7 trillion per year, globally) can undermine fiscal health and resilience. As technologies and policies evolve and markets shift, dependence on such costly economic development strategies can leave a country with no bridge to a stable economic future.

Any government that is currently treating polluters as if they do not need to worry about these extensive and rapidly worsening risks—in perpetuity—is acting in bad faith. The risk of serious liability for harm caused by climate pollution will only increase, and it will rise most significantly for those firms that “double down” or work to compel society to accept a pollution-centered economy. 

Such material risk denialism is potentially putting the future of those companies and other dependent supply chains and industries at risk. There have always been voices of reason among pollution-dependent industries—those who recognized that the best future strategy would be a coordinated transition with steady, predictable policy support, and enhanced access to capital for leaders and innovators.

Whether through sudden market shifts, subsidy shifting, policy change, or liability related to climate pollution and its harmful impacts, aggressive pursuit of future revenues from global heating pollution will eventually result in major, and possibly unmanageable, cost to the firms in question. There are pollution pricing strategies that would allow for a planned, coordinated, competitive transition, where innovation and enterprise would be rewarded, while the wider economy improves. 

Some cynical political figures claim authority to alleviate pollution liability or the obligation to compete for future earnings. They should not be trusted. Businesses and industries, and countries, that lead the development of a clean future economy will be the ones favored by future market, financial, and legal conditions.