COST OF CATASTROPHE
The Trillion-Dollar Toll — world’s largest fossil fuel companies on the hook for unprecedented damages: study
The study found that the planet’s largest fossil fuel companies are responsible for R275-trillion in damages caused by climate change.
A landmark report released by climate research group Climate Analytics contains a staggering finding: The world’s largest fossil fuel companies, known as the “carbon majors”, are responsible for a combined $15-trillion (about R275-trillion) in damages caused by climate change.
This figure represents just a fraction of the total economic and human costs incurred as a result of their unabated emissions. The report also notes that “economic damages from climate change will reach $1.7-trillion per year by 2025, and roughly $30-trillion [R551-trillion] per year by 2075 if the current warming trend continues”.
The report, titled “Carbon Majors’ Trillion Dollar Damages”, delves into the historical emissions of these companies and their associated financial gains. It finds that the 12 highest-emitting fossil fuel companies, both state-owned and private, collectively amassed $21-trillion in profits from their operations between 1985 and 2018. Yet, these same companies have simultaneously caused an estimated $15-trillion in damages due to their role in exacerbating climate change.
It had used “a well-established methodology – the social cost of carbon – to calculate damage estimates from the 25 biggest-emitting oil and gas companies in the world from 1985 to 2018, and compare it with the financial gains made over the same period. We look at Scopes 1, 2 and 3 emissions in our estimate of the total damages resulting from emissions attributable to fossil fuel companies.”
Rather than acting based on the evidence, or perhaps even less ambitiously, not covering it up, many companies instead chose to promote and spread false and misleading climate change claims.
The 12 highest-emitting fossil fuel companies, according to the report, are: Aramco, Gazprom, National Iranian Oil Co, ExxonMobil, Pemex, Shell, BP, Chevron, PetroChina, Abu Dhabi NOC, Petroleos de Venezuela and Kuwait Petroleum Corp.
The report explains that many of these companies have not only profited from the causes of human-induced climate change, but have also purposefully obfuscated their role in causing the crisis and delaying and preventing action to stop it.
“ExxonMobil produced projections of global warming as early as 1977. Rather than acting based on the evidence, or perhaps even less ambitiously, not covering it up, many companies instead chose to promote and spread false and misleading climate change claims, undermining scientific and political consensus. Evidence from internal emails shows that this was driven by a desire to protect their oil and gas business.
“Shell, TotalEnergies and others also produced confidential internal reports and were privy to climate science information as early as the 1960s, and yet pursued a global, coordinated effort to dispute climate science, push back against carbon regulation and protect their business models. This included the creation of the Global Climate Coalition in 1989, an industry-funded body that lobbied against climate legislation throughout the 1990s.”
The report’s findings underscore the profound injustice of climate change, where the polluters, primarily wealthy corporations, have reaped immense profits while leaving vulnerable communities and developing nations to bear the brunt of the consequences. The disproportionate impact on the world’s most impoverished regions further highlights the urgency of climate justice and accountability.
The report comes nearly a year after negotiators at COP27 in Egypt agreed to establish a loss and damage facility. A milestone in climate negotiations, it is designed to provide support for vulnerable nations facing irreparable harm from the impacts of climate change. It aims to hold responsible parties accountable and facilitate the flow of funds towards adaptation, recovery and reconstruction efforts.
Read more in Daily Maverick: COP27 makes history with agreement on ‘loss and damage’ fund for vulnerable countries impacted by climate change
The report explains that, to operationalise the facility, “a transitional committee was established consisting of representatives from 24 member states: 14 from developing countries, including two small island developing states and two least-developed countries. The committee has provided recommendations to COP28 for the establishment of the fund as a new and independent entity under the Convention and the Paris Agreement with an interim operationalisation period at the World Bank.”
As the world prepares for COP28 in Dubai this year, the findings of the Climate Analytics report serve as a powerful reminder of the moral and financial obligation of the fossil fuel industry to provide reparations for the damages they have caused. DM