How much do fossil fuel companies owe in climate reparations? - Quartz
How much do fossil fuel companies owe in climate reparations?
A new study by the environmental research group One Earth estimates the world’s top fossil fuel companies have emitted around 36% of all global emissions since 1988. That amounts to 403,092 metric tons of CO2 emissions, based on the group’s 2023 analysis that builds on the Carbon Majors 2018 data set.
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The aim of the study is to provide, for the first time, a methodology to quantify the economic impacts of individual companies’ damage to the climate. Estimates for the reparations are conservative, as they do not take into account factors including lives and livelihoods lost, species extinction, and biodiversity loss.
The impacts disproportionately affect poorer regions: Oxfam estimates that carbon emissions of the world’s richest 1% is more than double the emissions of the poorest half of the world.
Global economic damages resulting from the climate crisis are projected to be $99 trillion between 2025 and 2050, and fossil fuel emissions are responsible for $69.6 trillion of that. Around one-third of that number rests on fossil fuel companies, amounting to $23.2 trillion, or $893 billion annually.
A step towards climate justice
The top 21 fossil fuel-emitting companies owe $5.4 trillion, or $209 billion annually in reparations (excluding some companies such as those in Venezuela, which the study considers to be in too poor an economic situation to pay). Liability was also halved for producers in Russia, China, Mexico, Brazil and Iraq according to One Earth’s methodology.
Companies in countries that can afford to pay reparations include Saudi Arabia’s state-run oil and gas producer Saudi Aramco, which would owe the most at $43 billion annually, or about a quarter of its $161.1 billion profits in 2022.
In the US, ExxonMobil and Chevron would annually owe $18.4 billion and $12.8 billion respectively. ExxonMobil’s profits in 2022 alone were $56 billion, while Chevron made $35.5 billion in profits.
Shell and BP, each based in the UK, would owe $16.30 billion and $14.5 billion per year respectively. Their 2022 profits were $39.87 billion and $27.7 billion.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”