Claiming Polluters' Profits: Unjust Enrichment Law as a Tool for Civil Environmental and Climate Enforcement

The climate crisis poses an unprecedented global threat, with Israel at particular risk due to its location in a climate "hotspot." While polluting industries continue to reap immense profits from greenhouse gas emissions, regulators struggle to restrain them. The crisis is largely driven by the production of fossil fuels, with a small number of "Carbon Majors" responsible for the vast majority of emissions; in Israel, for example, just 15 factories contribute 74% of all industrial emissions.

Despite existing legislation, regulatory enforcement is failing because fines are negligible compared to the profits derived from pollution, and current carbon taxes do not fully reflect external costs. Consequently, civil litigation has become a crucial tool in the fight against climate change, yet private lawsuits based on traditional tort law face significant hurdles, particularly the difficulty of proving a causal link between a specific polluter’s emissions and specific climate damages.

Facing these failures, we propose an innovative addition to the legal toolkit: suing for polluters' profits under the Law of Unjust Enrichment rather than focusing on damages under tort law. This paradigm shift moves the inquiry from proving complex climate damages to the simpler question of whether a polluter unjustly enriched itself at the public's expense. The advantage of this cause of action is that it does not require proving or quantifying specific damages. A key precedent is the "Dieselgate" case, where the Tel Aviv District Court ruled that Volkswagen unjustly enriched itself by deceiving regulators. The court determined that the company had to return profits made at the expense of the public’s right to clean air, without needing to prove specific health damages caused by the excess pollution.

This legal framework is particularly relevant to the fossil fuel industry, which is among the most profitable in the world. Liability can be established either through "wrongful enrichment"—where pollution involves legal violations or fraud—or through "unjust enrichment" derived from depleting the "Carbon Budget." The Carbon Budget represents the finite amount of emissions the atmosphere can absorb before catastrophic warming occurs; it is a public resource essential for human survival. When companies exhaust this budget for private profit, they are unjustly enriching themselves at the expense of the general public.

While regulatory measures remain vital, they are currently insufficient to deter pollution as long as profits exceed penalties. The proposed approach offers significant advantages over tort litigation: it focuses on quantifiable, current profits rather than diffuse, future damages, and it bypasses the high barrier of proving causation. By targeting the massive profits of the few corporations responsible for the crisis, unjust enrichment laws can make excess pollution economically unviable. This approach effectively implements the "Polluter Pays" principle, ensuring that companies bear the true cost of the environmental degradation from which they profit.

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