The study makes the case for those most responsible for the climate disaster to compensate victims and, for the first time, assigns a monetary value to climate damages
The 21 largest oil, gas, and coal companies are accountable for $5,444 billion in predicted lost GDP between 2025-2050, or $209 billion per year, based on their proportion of emissions from 1988 to 2022. This research carried out by Marco Grasso (University of Milan-Bicocca) and CAI's Richard Heede, has been published in the peer-reviewed journal One Earth by Marco Grasso (University of Milan-Bicocca) and CAI's Richard Heede.
Saudi Aramco, which has the highest emissions from direct and product-related sources from 1988 to 2022, is assigned yearly liabilities of $43 billion, which is big but moderate in comparison to 2022 revenues of $604 billion and profits of $161 billion.
Exxon, the top investor-owned business, is expected to pay $18 billion in annual reparations, compared to $399 billion in revenues and $56 billion in profits in 2022.
The authors exclude four low-income enterprises, which include Coal India, and have halved the assessed obligations of six middle-income companies. The cumulative emissions from Coal India from 1988-2022 stand at 26,208 MtCO2e which translate into 2.33% of global emissions.
As an incentive for early action, the authors propose that corporations may be eligible for lower damages if they quickly stop manufacturing polluting fuels or reach their verified net zero commitments.
“This is only the tip of the iceberg of long-term climate damages, mitigation, and adaptation costs,” said co-author Richard Heede, co-founder and director of Climate Accountability Institute, “insofar as our measure of GDP loss to 2050, while substantial, ignores the value of lost ecosystem services, extinctions, loss of human lives and livelihoods, and other components of well-being not captured in GDP.”
The study makes an important point, “While the Global North’s historical carbon emissions have exceeded their fair share of the planetary boundary by an estimated 92%, the impacts of climate breakdown fall disproportionately on the Global South, which is responsible for a trivial share—Africa, Asia, and Latin America contribute only 8%—of excess emissions.1 At the same time, the world’s richest 1% of the population contributed 15% of emissions between 1990 and 2015, more than twice as much as the poorest 50%, who contributed just 7% but who suffer the brunt of climate harm.”
The subject of "who should pay for climate damages" is becoming more prevalent in the scientific literature, among climate activists, and in policy debates, particularly in relation to the Loss and Damage mechanism. This paper suggests an ethically based obligation for oil, gas, and coal producers to pay reparations, gives a systematic methodology for their implementation, and quantifies annual payments for the main fossil fuel firms from 2025 to 2050 for the first time.
“This is only the tip of the iceberg of long-term climate damages, mitigation, and adaptation costs,” said co-author Richard Heede, co-founder and director of Climate Accountability Institute, “insofar as our measure of GDP loss to 2050, while substantial, ignores the value of lost ecosystem services, extinctions, loss of human lives and livelihoods, and other components of well-being not captured in GDP.”
The study quantifies annual payments owed by the top 21 fossil fuel companies from 2025 to 2050 in compensation for the expected extreme weather and other climate change damages caused by their operational and product emissions from 1988 to 2022, based on the Carbon Majors Database, which records data on the emissions of the largest carbon polluters.
A consensus study of 738 climate economists estimated total global economic damages from climate change to exceed $99 trillion between 2025 and 2050.
To assess individual corporations' obligations, the authors used their emissions since 1988, the year the IPCC was created, claiming that "since 1988, claims of scientific uncertainty about the consequences of carbon emissions are untenable." About half of the warming since then has occurred, and the implications of climate change in the following decades will be mostly driven by emissions produced after the late 1980s.