State actions and libertarian lawsuits

Lessons from Covid for the climate emergency

Featured in

  • Published 20210202
  • ISBN: 978-1-922212-56-6
  • Extent: 264pp
  • Paperback (234 x 153mm), eBook

IN SEPTEMBER 2020, for the first time in its seventy-­five-­year history, the annual meeting of the UN General Assembly was held virtually. In Le Corbusier’s vast General Assembly Hall, UN officials and a single masked representative of each member state sat in a socially distanced formation, leaving most of the 1,800 seats vacant. World leaders made their presentations in fifteen-­minute pre-recorded statements. Their appearances by video on two giant screens that dwarfed the room’s human inhabitants intensified the dystopian quality of the proceedings.

Addressing that largely empty auditorium, UN Secretary-­General António Guterres commented on this strange sight in ‘a world turned upside down’. However, he added, while COVID-­19 had changed the annual meeting beyond recognition, it had also made it more important than ever. The pandemic is ‘the kind of crisis that we will see in different forms again and again. COVID-­19 is not only a wake-­up call, it is a dress rehearsal for the world of challenges to come.’

Over the course of this long pandemic year, many of us have similarly linked the COVID-­19 pandemic with climate change, warning that the emergence of a deadly novel virus prefigured the types of challenges to which a warming planet would give rise and comparing the unprecedented mobilisation to slow the virus with the kinds of dramatic action that would be needed to avert the worsening effects of significant climate change. Yet if 2020 is a dress-rehearsal for the global response to the climate emergency, we need to hope that there is some wisdom in the old theatrical adage that a bad dress rehearsal means a great opening night.


ACT ONE. IN the early – and, in retrospect, relatively innocent – months of the pandemic, it seemed as if we were witnessing a significant shift in the way that individuals, institutions and governments approached the responsibility of states to protect their citizens. After decades of being told by governments across the Western world that there was simply no alternative to prioritising economic growth, competition, budget surpluses and the happiness of the ‘market’ over all other values, it was startling to see how quickly the limits of the politically possible could shift.

Around the world, states that had seemed committed to a tired set of neoliberal policy prescriptions began to transform. They reinvested in public health systems, engaged in logistical planning exercises on a scale rarely seen outside wartime, rediscovered a public role for scientific experts and offered sick leave to casual and precarious workers. They nationalised private health facilities, countenanced significant budget deficits and closed borders to inessential travel. They found housing for the homeless, suspended evictions, and built stockpiles of essential supplies and protective equipment rather than relying on volatile global supply chains. They required those who could to work from home, and paid those who couldn’t to stay at home while businesses were closed. These extraordinary measures were implemented in order to slow down the rate at which the virus spread and buy time for frontline medical workers to prepare for the coming disaster. Business as usual was suspended.

These regulatory responses not only marked a break with the dominant politics of deregulation, privatisation and austerity, but were also communicated in a language that had seemed lost to the public sphere, at least in powerful Western democracies. For decades, elites trained in business, economics and law had been immersed in the bleak scenarios imagined by rational choice, game theory, and law and economics, in which strategic rational actors of all shapes and sizes – from genes to individuals to states – would always and only act to pursue their self-­interest and take advantage of others without restraint or limit. Here, suddenly, were politicians willing to speak about protecting the vulnerable, supporting essential workers involved in keeping hospitals and vital systems running, and the need to put the common good above the demands of the market.

Those early months of the pandemic also saw some guarded optimism about the effect that the disruption of the global industrial economy was having on carbon emissions, air quality and water pollution. By April and May, reports of environmental scientists, activists and journalists began to document that the effects of the COVID-­19 pandemic on global carbon emissions were measurable after only a few months. Actions taken in February by China to contain the virus caused an estimated drop of 25 per cent in its carbon emissions. During April, with most countries shut down at the height of the first wave, global fossil-fuel emissions declined by almost 17 per cent. Subsequent international studies have shown that the reduction in energy consumption during the first half of 2020 led to the largest decline in carbon emissions in world history, significantly greater than during the financial crisis of 2008, the oil crisis of 1979, World War II or the Great Depression.

Individual and government responses to the COVID-­19 pandemic interrupted the cycle of increasing energy-­intensive manufacturing, transport, consumption and the discarding of products designed to be disposable. What if that experience had a long-­lasting effect on unsustainable habits, routines and behaviour, and revealed that a form of life conditioned upon the exhaustion of the planet’s fossil fuels, metals, minerals and water was, after all, negotiable? The mood at the end of that first act was captured well in a much-­cited essay by Arundhati Roy, published in the Financial Times in April. For Roy, pandemics throughout history had forced humans to ‘imagine their world anew’. She argued that COVID-­19 was no different. The pandemic was ‘a portal, a gateway between one world and the next’.


AND THEN, ACT Two. Initially, the speed with which the coronavirus spread and governments responded meant that vested interests had little time to develop campaigns aimed at resisting economic shutdowns and new regulations. Yet once the crisis really began to hit the UK and the US in particular, it became clear that the defenders of a more extreme version of libertarianism would only go down fighting. In that sense, this time of pandemic has also proved to be a dress-rehearsal for those seeking to resist any measures to protect life and health that might interfere with property rights or disrupt the current economic system.

As responses to the pandemic began to play a role in US election-­year politics, it did not take long for techniques drawn from the corporate playbook of crisis management to take centre stage. Debates over the role of governments in responding to such crises began to take on a more polarised tone. By mid-­2020, the full might of neoliberal resistance to state action and constraints on economic freedom had swung into operation, accompanied by a remarkably frank appeal to eugenics in the form of ideas about ‘herd immunity’ and the need to sacrifice the weak to allow the strong to prosper.

The backlash in the US began to resonate globally. The idea that governments needed to make hard choices between damaging the economy and seeking to preserve ‘almost every life at almost any cost’, in the words of former Australian Prime Minister Tony Abbott, became a staple of right-­wing think pieces and talk shows. The kind of denialism and anti-­science scepticism that had been a staple of climate change debates gained a new hold, spread by traditional and social media networks. Sweden became the unlikely poster child for right-­wing libertarians, who ignored the high degree of conformity, trust in government and stress on individual responsibility that allowed the Swedish government simply to ‘recommend’ that people socially distance, wear masks and work from home – and achieve significant behavioural shifts as a result. For anyone following US politics, scenes of libertarians and militias vocally protesting government measures to control the pandemic became very familiar.

But a less spectacular form of resistance to government pandemic responses was being played out in the American courts. Across the country, a flood of lawsuits was brought by private businesses, churches, activist groups, property owners – and even by (Republican) state legislatures against (Democrat) state governors. These cases challenged the authority of local, state or federal officials to issue emergency decrees, impose stay-­at-­home orders, mandate the wearing of face masks, close non-­essential businesses or require citizens to engage in social distancing, arguing that such measures violated the separation of powers between the legislative and executive branches of government or infringed constitutional rights and freedoms.

From a domestic US perspective, the cases widely believed to have the least chance of success were the numerous lawsuits claiming that the temporary closure of businesses or ban on owners travelling to their vacation homes constituted regulatory ‘takings’ of private property for public use that would require the payment of just compensation under the Fifth Amendment to the US Constitution. Constitutional scholars have suggested that these cases are likely to fail because the courts have not to date adopted a broad interpretation of the takings clause that would require governments that act to forestall serious threats to the lives, safety or property of others to compensate property owners for losses suffered as a result.

Nonetheless, Richard Epstein, the NYU law professor who had largely invented and popularised the libertarian reading of the takings clause on which such claims were based, proved highly influential in establishment debates over the need to limit government responses to the COVID-­19 pandemic. Already by mid-­March, conservatives and Trump administration officials had begun circulating an article by Epstein arguing that the world was overreacting to the coronavirus, public officials had gone overboard, and ‘[p]rogressives think they can run everyone’s lives through central planning, but the state of the economy suggests otherwise’. As Epstein made clear in an interview published in The New Yorker, his recommendations that governments should leave the virus to run its course were based on ‘evolutionary theory’ and ‘the principle of natural selection’.

While the libertarian approach to protecting private property against regulatory actions undertaken by governments in cases of emergency is still unlikely to find support in US courts, the situation is different in international law. International arbitration firms are gearing up to use international trade and investment agreements as a basis to challenge state regulatory responses to COVID-­19 that have had an effect on free trade or investor profits. This is taken out of the playbook that investors have used to push back against government regulations in relation to climate change. Investors are able to rely on a network of trade and investment agreements and a raft of asymmetrical dispute-­settlement mechanisms consolidated during the 1990s. This system of ‘investor-­state dispute settlement’ or ISDS allows investors to bring claims against states for ‘expropriation’ by regulation – grounded on precisely the libertarian theory of property rights that not even US courts will recognise. Broad interpretations of vague treaty provisions have served to protect investors against the effects on profits of routine government regulation aimed at protecting public health, the environment or consumer safety.

Already in March, as morgues overflowed and governments scrambled to access protective gear and ventilators, international law firms and arbitrators were touting for business. In briefing papers, blogs and – that pandemic year special – webinars, international law firms have encouraged multinational clients to consider the possibility that pandemic emergency measures could allow claims for compensation to be brought by foreign investors against governments. Law firms have pointed to a wide range of government actions or omissions that they consider to be challengeable under investment treaties. These include government measures that prevent private water suppliers from cutting supply to householders that cannot pay their bills in order to ensure access to clean water for handwashing, temporarily requisition private hospitals and hotels for use by the public health sector, compel companies to produce medical supplies, or fail to prevent protests or social unrest that result in harm to the property of foreign investors.

Arbitrators have good reason to consider that such investor-­state lawsuits may be successful. Many of the thousand-­plus ISDS lawsuits brought to date have involved disputes concerning government measures taken in situations of crisis, as well as numerous claims for compensation due to losses caused by environmental regulations. Such claims are often supported by third-­party funders, seeking and anticipating high returns – and for good reason: in ISDS proceedings already decided against the state and in favour of the investor, the average amount claimed is $1.3 billion and the average amount awarded $504 million. Activists have challenged both the resulting constraints and costs placed on states seeking to implement environmental, fiscal or public health measures and the empowerment of corporate actors in their role as foreign investors to challenge government decision-­making. The net effect of the system is to create a chilling effect on state regulation in the interests of local communities and the environment, and to transfer public assets from states to private actors as the price of regulating.

In this respect, the second act of the global dress rehearsal for climate change has a sobering message. It might seem self-­evident that global institutions and international law should have a role to play in shaping the response to climate change and related crises such as the COVID-­19 pandemic. The battle between China and the US over the priorities of the World Health Organization has been seen by many to represent a dangerous politicisation of a UN agency. Creating international treaties to govern issues such as global public health or the environment is widely seen as a potential solution to collective problems. Yet it is important to remember that international lawyers and institutions are already engaged in intervening in the climate emergency. By far the most effective role played by international lawyers to date has been in creating barriers to a green transition. Industry lobbyists have privileged access to shape the positions taken by powerful states in the negotiation of international agreements, while NGOs and the general public are provided with late access, if any. Decisions taken by governments in response to complex challenges such as the COVID-­19 pandemic and global warming will affect life on earth, but they will also affect entrenched property interests. This phase of the dress rehearsal gives a sense of how hard those battles will be fought by those empowered through their property rights to shape the choices made by governments.


AS ACT THREE opens, the audience is becoming tired and restless. Over the course of 2020, something seems to have happened to time itself. Those of us who grew up in a world made by capitalism, trained to act as the entrepreneurs of our own brand, are suddenly being called upon to live in a way that is almost unthinkable. We had learnt to imagine time as something constantly flowing from past to future – an empty medium in which the economy could grow, technology could progress, we would improve ourselves, the next big thing would arrive. Now we have been asked to play a new part. Stay. Wait. Stop moving. Be still. For those around the world living under extended – or reintroduced – lockdowns, there is no escape from the place in which we find ourselves. If this is a dress rehearsal, it is for one of those epic theatrical events that changes the experience of time for all involved. How, if at all, immersion in the world of such a play might change our lives once the lights go up and we wander out into the night is an open question.

Of course, the entitlement and ability to travel around the globe was already distributed extremely unevenly. One of the clearest markers of privilege in our global community is the freedom to move around the world – or even just around a city in which police mark out those they target on the basis of skin colour. The question of who is entitled to move and who is required to stay still will become even more important as the climate crisis progresses. For wealthy inhabitants of prosperous countries, the crisis will present itself as a geopolitical and strategic challenge. For those in countries rendered uninhabitable by climate change, it will present as a question of personal survival. How we think about the freedom to move and the need to stay still will be one of the most pressing questions of the coming era.

And yet for those privileged humans who are used to having the freedom to move, being forced to change routines and give up habits has been hard. Staying in one place, staying still, staying apart, feels unnatural. From that perspective, the implications of the impact of COVID-­19 restrictions on carbon emissions are sobering. In this year of lockdowns, the historically low levels of fossil fuel emissions produced by humans have nonetheless only had a miniscule effect on the concentration of carbon in the atmosphere. That gives a sense of the scale of disruption, particularly to the lifestyles of wealthier high emitters, that will be needed to address global warming. Perhaps this experience of stepping outside the forms of life that we have taken for granted is the rehearsal for living in a world remade by climate change. What is required of us may be more demanding than we’ve really understood until now. It may be that this is what we have to practise, like an actor learning a new role – this staying in place, this waiting, this standing our ground. As the visionary feminist scholar Donna Haraway has described it, the task ahead of us will be to learn ‘to stay with the trouble of living and dying together on a damaged earth’.

And even if the restrictions on production, consumption and movement we experienced in 2020 were maintained indefinitely, that alone would not be enough to avert catastrophic climate change. Personal ‘carbon footprints’ – a term popularised by BP in a 2005 ad campaign to direct attention about responsibility for climate change away from the oil and gas industry and onto individuals – are responsible for a tiny fraction of emissions. While the COVID-­19 pandemic has caused more disruption in the demand and consumption of energy than any other event in history, far more radical transformations in energy and resource use are yet necessary in order to avert the looming social and ecological challenges posed by significant global warming. Whether we see a more profound change in our energy and economic systems will depend on the decisions that are made by government leaders, corporate executives, financial institutions, investors, unions, party officials, consumers, activists, workers and voters now and in the years to come.

As the dress rehearsal plays out, the context in which such decisions will be made seems to have altered. While political leaders around the world take and defend radically different approaches to managing the pandemic, grim league tables have emerged setting out the numbers of cases and deaths in each country. Social media is a melange of medical commentary, stories from the frontline, forensic analysis of epidemiological successes or missteps, and conspiracy theories, along with expressions of despair, hope, bitterness, humour, patience, impatience, grit, courage, suspicion and absurdity. We have watched public health officers become celebrities; powerful men make increasingly desperate demands that governments stop prioritising saving lives over budget surpluses; people living in public housing blocks, migrant-­worker barracks and university dorms detained due to outbreaks; health workers cheered by their neighbours while being left vulnerable due to a lack of protective equipment; children and young people trying to continue their education from home (and online for those fortunate enough to have access to good internet and a device); lobbyists ensure that dirty industries profit from stimulus packages meant to avert a post-­pandemic recession – while intensive care wards fill up and empty out with the waves of the virus and the changes in the seasons.

The result is something that seems new, strange and on its best days even hopeful – a collective project of mutual learning on a global scale, in which the interactions of human and non-­human actors have created new worlds. While in the early months it seemed enough to say ‘we’re all in this together’, the politicians and health experts who have managed to keep the support of the people have abandoned any top-­down educational role and admitted that they too are learning every day. Much of the subtlety involved in managing the interaction between humans and this novel virus in countries that have succeeded in emerging from successive coronavirus waves has been lost because of the amount of bandwidth that the US and Europe continue to take up in Western media. There is still less serious attention given to the possibility that the models offered by places such as China, Singapore, Vietnam, Taiwan, South Korea, Hong Kong, Japan, New Zealand and (finally!) Melbourne – all outside North America and Europe – may be central to understanding the future. Politicians, public health officials and epidemiologists in those places focused on the readiness of public health systems and equipment, but also grasped that combating this virus would require taking care to protect the vulnerable, support essential workers, establish sophisticated testing and tracing systems, communicate public health messages in multiple languages, and create the trust that is needed to persuade people to make sacrifices in order to realise a collective good rather than insist on exercising individual freedoms. It is the combined effect of mundane, everyday trial and error, and the counterintuitive experience of showing our solidarity through enduring and waiting, that has seen the virus contained.

COVID-­19, like climate change, is presented to us as a global problem mediated through data collection and virtual technology. In the words of philosopher Timothy Morton, big data creates ‘hyperobjects’ for which there is as yet no equivalent ‘hyper’ political subject. No political institutions are adequate for the planetary scale of this problem, nor can any provide a basis for the kind of global regulation or governance that would be capable of addressing a problem conceived in planetary terms. Yet it may just be that as this pandemic plays out, we are witnessing the emergence of a process of collective thinking on a global scale, mediated by new forms of social media. Scientists and public officials are learning from each other and from the virus. Governments are being measured and compared by the people. The relationships between special interests and politicians are being spotlighted to unflattering effect.

In that context, the world has gained a new sense of the US as an outlier among prosperous countries. It seems clear, as it has seemed clear to those resisting the excesses of industrial capitalism for centuries, that a planet full of people exercising the kinds of liberty that the wealthiest Americans insist upon for themselves is not sustainable. While propertied elites in the US might win the battle over lockdowns and government support for those suffering during the resulting economic downturn, it is hard to avoid the conclusion that they might lose the war. The more that a small minority prosper during the crisis while the rest of the US suffers, the less legitimacy that system will retain for the rest of us. What that means domestically for US citizens will depend on the capacity of the winners to exclude the losers from fully participating in the political system. What it means for the rest of the world depends on the lessons we are able to learn as we watch this continuing dress-rehearsal unfold.

30 November 2020


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About the author

Anne Orford

Anne Orford is Redmond Barry Distinguished Professor and Michael D Kirby Chair of International Law at Melbourne Law School. Her latest book is International Law...

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