States and localities have filed waves of lawsuits against the fossil fuel industry to make energy companies pay for damages that communities face from climate change. Threatened with potentially huge financial penalties, industry and its supporters recently turned to the Supreme Court for help โ without success. Now, Sen. Ted Cruz, the Texas Republican, has launched a new line of attack that could help industry by focusing on the money that's allegedly behind the climate cases.
At a June hearing on Capitol Hill, Cruz accused China of funding the lawsuits in order to cripple U.S. oil and gas producers and to strengthen Beijing's position in global energy markets. If the community court cases succeed, Cruz said U.S. energy production would fall and prices would rise. "And the biggest winner in all of this: China, who's paying the bills," he said.
However, Cruz's office has not offered evidence that China or a China-linked nonprofit that Cruz identified by name has funded climate lawsuits in the United States. A spokesperson for Cruz, Macarena Martinez, provided NPR with a response from ChatGPT that reads, in part: "What's not publicly demonstrated (so far) is a direct, documented grant-to-lawsuit pipeline."
Cruz's unsubstantiated claim is part of a yearslong effort by the fossil-fuel industry and its allies to fight lawsuits that state and local governments have filed against oil and gas companies, according to environmental advocates and Democratic lawmakers. The litigation alleges that corporations misled the public for decades about the dangers of burning fossil fuels, the primary cause of climate change. The lawsuits seek money to help communities cope with the risks and harms from global warming, including more extreme storms, floods and heat waves.
For years, Republican lawmakers have probed the funding sources for America's environmental movement. That scrutiny has focused more recently on climate litigation as cases proliferated around the country. This summer, a group of Republican state attorneys general called for a federal law to protect energy companies from "activist-funded climate lawsuits."
Ryan Meyers, general counsel for the American Petroleum Institute, a trade group for the oil and gas industry, said in a statement to NPR that the climate lawsuits are "baseless" and a "coordinated campaign" against energy companies. "Climate policy belongs in Congress," Meyers said, "not a patchwork of courtrooms."
The American Petroleum Institute would not comment on the record about Cruz's allegation that China is funding the lawsuits.
John Chung-En Liu, an associate professor of sociology at National Taiwan University who has studied Chinese climate propaganda on social media, says framing U.S. climate litigation as a China-funded campaign is "an easy tactic" to whip up opposition.
"China doesn't have a very good name in Washington, D.C.," Liu says, and Beijing does try to influence politics and public opinion globally on a range of issues.
China's embassy in Washington did not respond to messages seeking comment for this story.
'We should be very careful to actually know what's real and what's not'
The alleged funding scheme that Cruz described in June revolves around a nonprofit called Energy Foundation China. Headquartered in San Francisco with an office in Beijing, the group is led by a former official at China's National Center for Climate Change Strategy and International Cooperation. Last year, GOP lawmakers asked Energy Foundation China for documents related to its funding of U.S. organizations.
At the Senate hearing this summer, Cruz said Energy Foundation China is "one of the primary vehicles" for an international alliance between "leftist billionaires, radical environmental organizations and the Chinese Communist Party."
"And this money isn't going to tree-planting campaigns or to science fairs," Cruz said. "It's flowing directly to aggressive litigation outfits, like the Natural Resources Defense Council, the Rocky Mountain Institute and the World Resources Institute."
Energy Foundation China has given money to all three of those groups, according to tax filings. But Sen. Sheldon Whitehouse, a Democrat from Rhode Island, said at the June hearing that Cruz hadn't provided evidence that the money was used to pay for U.S. lawsuits โ as opposed to trying to cut climate pollution in China.
"If it turns out that China is supporting lawsuits in the United States, that would be extremely troubling. And so I think we should be very careful to actually know what's real and what's not," says Ilaria Mazzocco, a senior fellow who focuses on Chinese business and economics at the Center for Strategic and International Studies.
A spokesperson for the Rocky Mountain Institute, Adam Beitman, said in a statement to NPR that the nonprofit does not participate in litigation, and that all of the funding it has received from Energy Foundation China "is focused squarely on the energy transition inside of China."
A spokesperson for the World Resources Institute, Alison Cinnamond, said her organization does not participate in litigation, nor does it direct legal action by other groups. "WRI's work in China focuses on issues like air quality, sustainable cities, energy efficiency, and resilience โ areas that are essential for global well-being," Cinnamond said in a statement.
Michael Wall, the chief litigation officer for the Natural Resources Defense Council, says the nonprofit has used funding from Energy Foundation China exclusively for programs to cut climate pollution in China. In the U.S., NRDC has sued government agencies and corporations that have violated environmental laws, Wall says, and the nonprofit is defending state laws in New York and Vermont to force fossil fuel companies to help cover the costs of climate change.
An executive at Energy Foundation China, Vance Wagner, said in a statement that the nonprofit is an independent organization that funds research and other initiatives to address climate change in China, which is the biggest source of heat-trapping pollution globally. Wagner said the group doesn't fund or engage in activism, litigation or lobbying in any country.
Republican attorneys general want to shield energy companies from lawsuits
Days before Cruz accused China of bankrolling the climate cases, more than a dozen Republican state attorneys general sent a letter to U.S. Attorney General Pam Bondi asking the Justice Department to recommend federal legislation to give energy companies a "liability shield" to protect them from climate litigation. The Justice Department's Office of Policy and Legislation is charged with developing legislative proposals, among other duties. Earlier this month, for example, the department sent Congress proposed legislation that would prohibit doctors from providing gender-affirming care to children.
In the letter to Bondi, the Republican attorneys general wrote that the legal protection they want to create for energy companies is similar to a 2005 law called the Protection of Lawful Commerce in Arms Act, which generally shields gun manufacturers and dealers from civil lawsuits when firearms are used in criminal activity.
Kansas Attorney General Kris Kobach, a Republican who signed the letter to Bondi, then served as an expert witness at Cruz's hearing about China. "I think that where Congress can be helpful in these [climate] cases is in getting to the bottom of where the money is coming from," Kobach said at the hearing.
Cruz's allegation of Chinese funding was designed "to create political cover" for Congress to give fossil fuel companies legal immunity from climate litigation, says Richard Wiles, president of the Center for Climate Integrity, which supports climate lawsuits against the fossil fuel industry by filing legal briefs and providing plaintiffs with documents.
The Justice Department did not respond to messages seeking comment.
So far, the climate lawsuits filed by states and localities have had mixed results. Some cases have been dismissed by judges who ruled that climate pollution is an issue for the federal government to deal with. But other lawsuits are moving toward trial. In January, the Supreme Court rejected an effort by oil and gas companies to block a climate lawsuit filed by Honolulu. And in March the justices turned down a request by Republican attorneys general to stop climate lawsuits filed by states including California, Connecticut, Minnesota and Rhode Island.
"All these communities are asking is that the oil industry pay their fair share of the damages that they knowingly cause," Wiles says. "It's completely reasonable."
In a legal brief challenging a lawsuit that Boulder, Colorado filed against oil and gas companies, the Justice Department recently told the Supreme Court that allowing climate litigation to move forward in state courts exposes energy companies to billions of dollars in damages, as well as a confusing assortment of local regulations.
Lawsuit critics say oil and gas companies are victims of Big Philanthropy
Opponents of the climate lawsuits have long claimed that activists and deep-pocketed philanthropies have been colluding with Democratic politicians to hurt U.S. oil and gas companies. In 2023, Cruz and Rep. James Comer, a Kentucky Republican, asked for financial information from Sher Edling, a law firm that's filed many of the climate lawsuits brought by states and localities.
Last year, The Free Beacon, a conservative news site, published a Congressional memo that detailed funding that several nonprofits have given to Sher Edling. Since that money came from tax-exempt organizations, taxpayers effectively have been "bearing the cost" of Sher Edling's legal work, according to the memo, which was written by Republican staffers on the Senate Commerce, Science and Transportation Committee and the House Committee on Oversight and Accountability.
The memo added: "Although not illegal, this structure allows the green mafia to achieve its political goals while lowering its tax bill."
The Congressional memo names three nonprofits that gave money to Sher Edling: New Venture Fund, the Tides Foundation and Resources Legacy Fund. Tax filings show that all three got funding from Energy Foundation China, but two of them got those grants before they started funding Sher Edling.
Of the three, Resources Legacy Fund in 2017 got $185,00 from Energy Foundation China, according to an Energy Foundation China tax filing. The money was meant "to promote education and analysis to build markets for clean, affordable energy that protects public health." That same year, Resources Legacy Fund gave Sher Edling about $432,000 for "land or marine conservation," according to a Resources Legacy Fund tax filing.
Resources Legacy Fund did not respond to messages seeking comment. Neither did the Tides Foundation. New Venture Fund declined to comment.
Sher Edling declined to comment for this story.
Wall of the Natural Resources Defense Council rejected the idea that philanthropic funding has unfairly disadvantaged oil and gas companies in court. "There's simply no comparison between the resources the oil industry has and the resources that nonprofits have," he says. "Litigation is a way for people to participate in the governmental process by working to ensure that the laws that protect them are enforced and carried out."
In a letter to Cruz and Comer last year that was obtained by NPR, a lawyer for Sher Edling wrote that fossil fuel companies that are defendants in the climate cases "fear that the communities will prevail in those lawsuits โ and so they now hope that you will run interference for them. Respectfully, you should not."
When Cruz accused China of funding U.S. climate lawsuits this summer, he said Beijing's goal is to establish "global energy dominance and control." China is the world's biggest producer of green technology, like solar panels and electric vehicles. And Republican lawmakers and conservative activists for years have argued that climate policies that shift the U.S. away from fossil fuels would make America dependent on Chinese supply chains.
But Liu of National Taiwan University says Beijing is probably content to have the U.S. focus on oil and gas, rather than to challenge China in other parts of the energy market.
"China wants to be the leader in the key technology in the future, so that they don't have to be controlled by the West," Liu says, adding: "If we are following this train of thought, then they will prefer [the] U.S. not taking climate very seriously, and let China take over all the EVs, take over solar and wind."
Copyright 2025 NPR
