World’s Top 21 Fossil Fuel Firms Responsible For At Least $209bn In Annual Climate Change Damages : Study
21 largest oil, gas and coal firms are therefore responsible for $5,444 billion in expected lost GDP over 2025-2050
The study titled “Time to Pay the Piper” by Marco Grasso and Richard Heede, published in the peer-reviewed journal One Earth, proposes a morally-based responsibility for oil, gas, and coal producers to compensate for climate damages. It quantifies the annual payments owed by the top 21 fossil fuel companies from 2025 to 2050 for the expected economic costs of climate change.
According to the study, the top 21 global fossil fuel producers are collectively responsible for $5.4 trillion in expected economic costs from climate change over the period of 2025-2050, averaging $209 billion per year. These costs are attributed to the extreme weather events and other climate change damages caused by their operational and product emissions from 1988 to 2022.
The total global economic damages from climate change estimated by a consensus survey of 738 climate economists amount to $99 trillion between 2025 and 2050. After considering non-fossil fuel sources of warming, the study estimates that fossil fuel emissions will contribute to $69.6 trillion in economic damages during the same period. The authors conservatively attribute one third of these costs to the global fossil fuel industry, with one third each attributed to governments and consumers. Consequently, the global fossil fuel industry is held responsible for $23.2 trillion in expected GDP loss from climate change impacts over 2025-2050, equivalent to $893 billion per year.
To calculate the responsibilities of individual companies, the authors use their emissions data since 1988, the year the Intergovernmental Panel on Climate Change (IPCC) was established. They argue that scientific uncertainty about the consequences of carbon emissions is untenable since that date. Since about half of the warming experienced thus far has occurred since 1988, the authors assert that emissions produced since the late 1980s will significantly contribute to climate change impacts in the coming decades.
Based on the share of emissions from 1988 to 2022, the study holds the 21 largest oil, gas, and coal firms responsible for $5,444 billion in expected lost GDP over 2025-2050, averaging $209 billion per year.
The study proposes that companies could be eligible for reduced reparations if they take early action by ceasing the production of polluting fuels promptly or meeting verified net-zero targets.
The authors hope that their framework for quantifying and attributing reparations to major carbon fuel producers will serve as a starting point for discussions on the financial duty owed by the fossil fuel industry to climate victims. They acknowledge that their measure of GDP loss to 2050, while substantial, does not capture the full extent of long-term climate damages, mitigation costs, adaptation costs, and the value of lost ecosystem services, extinctions, human lives, and livelihoods not accounted for in GDP.
The Climate Accountability Institute, co-founded and directed by Richard Heede, engages in research and education related to anthropogenic climate change, the contribution of fossil fuel producers to carbon dioxide content, and the risks, liabilities, and disclosure requirements associated with greenhouse gas emissions. Their work encompasses the science of climate change, the civil and human rights associated with climate stability, and the impacts of emissions attributable to primary carbon producers.
The writer of this article is Dr. Seema Javed, an environmentalist & a communications professional in the field of climate and energy