New Report Examines Economic Consequences of “Lawfare” on Energy, Infrastructure, and U.S. Competitiveness
Global Litigation Finance Market to Grow from $20 billion to
nearly $50 billion by mid-2023
Washington, D.C. — A new report from the American Council for Capital Formation (ACCF) Center for Policy Research finds that the increasing use of litigation to shape public policy—often referred to as “lawfare”—is becoming a growing economic force with significant consequences for U.S. energy development, infrastructure investment, and global competitiveness. Litigation as Policy: The Economic Consequences of Modern Lawfare, authored by ACCF Chief Economist Dr. Pinar Çebi Wilber, finds that strategic lawsuits are increasingly used not only to enforce laws but also to influence policy outcomes outside the legislative and regulatory processes designed to govern energy and infrastructure development.
The report also examines how the broader litigation ecosystem has expanded rapidly in recent years and is projected to grow from roughly $20 billion in the mid-2020s to nearly $50 billion by the mid-2030s, reflecting increasing financial incentives to pursue large-scale lawsuits targeting industries and major infrastructure projects. At the same time, climate-related litigation has surged worldwide, with 1,936 climate-related cases filed in the United States alone as of mid-2025, more than in any other country.
“Litigation plays a critical role in enforcing laws and protecting environmental standards,” said Dr. Pinar Çebi Wilber, Executive Vice President and Chief Economist at ACCF. “However, when litigation becomes a substitute for policymaking, it can introduce significant uncertainty into investment decisions and delay the development of infrastructure that is essential for economic growth and energy security.”
Three major categories of litigation are identified as increasingly shaping the U.S. energy and manufacturing landscape:
- Permitting and environmental review litigation, particularly under the National Environmental Policy Act (NEPA);
- Climate liability lawsuitsfiled by states, municipalities, and advocacy groups seeking damages related to climate change; and
- Legacy environmental liability litigation, including coastal damage suits tied to historical energy activity.
Through case studies of pipelines, transmission infrastructure, and critical mineral projects, the report demonstrates how litigation can extend project timelines, increase financing costs, and create long-term uncertainty for investors—even after projects receive regulatory approval.
According to the report, this growing reliance on litigation introduces uncertainty into investment decisions, raises the cost of capital for major projects, and can delay critical infrastructure investments that underpin energy security and supply chains. It identifies several measurable economic impacts associated with litigation-driven project delays:
- Litigation risk can reduce investment by 3–7 percent.Economic research shows firms facing heightened legal risk reduce capital spending and rely less on debt financing as a precautionary response.
- Energy infrastructure projects face years of delay from litigation.Analysis of environmental lawsuits shows energy projects experience an average 9-year delay due to legal challenges—even though agencies prevail in most cases.
- Environmental litigation is increasing significantly.Federal courts heard roughly 39 NEPA appeals cases annually between 2013 and 2022, a 56 percent increase compared to earlier periods.
- Most cases do not ultimately change regulatory outcomes.Agencies win about 80 percent of NEPA lawsuits, yet projects still face years of uncertainty while litigation proceeds.
- Legacy coastal litigation in Louisiana has created significant uncertainty for energy investment.Lawsuits seeking retroactive liability for historical energy activities have produced large verdicts and prolonged legal disputes, complicating long-term planning for offshore development and coastal restoration revenues tied to the state’s energy industry.
- Project delays can impose significant real-world costs.Litigation delaying the New England Clean Energy Connect transmission project increased costs for Massachusetts ratepayers by approximately $500 million due to inflation and schedule disruptions.
The report also highlights financial market effects associated with climate litigation. Research cited in the study shows that companies targeted by climate lawsuits experience an average 0.41 percent decline in stock returns following a filing or unfavorable decision, with even larger impacts for major fossil fuel producers.
“Even when projects ultimately prevail in court, years of litigation can raise costs, deter investment, and postpone the public benefits associated with energy and infrastructure development,” Dr. Wilber added. “Improving policy predictability—while maintaining environmental protections—will be essential to ensuring the U.S. can meet rising energy demand and remain globally competitive.”
READ THE FULL REPORT: Litigation as Policy: The Economic Consequences of Modern Lawfare
