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Fossil fuel firms owe $209bn a year for climate damage, new study reveals

UN Secretary-General António Guterres, has asked the G7 bloc of industrialised countries to be ‘central to climate action.’ PHOTO/UN


Researchers have for the first time put a price tag on climate damages owed by leading fossil fuel producers including Saudi Aramco, ExxonMobil, Shell, BP and Chevron.

Their study, published in journal One Earth, finds 21 coal, oil and gas companies responsible for $209 billion a year in compensation for extreme weather and other climate change impacts predicted to occur around the world between 2025 and 2050.

Emissions from these companies’ operations and the use of their products between 1988 and 2022 contributed significantly to that harm, the study concludes. Global emissions surged over that 34-year period, despite the IPCC’s increasingly urgent warnings about the need for concerted action.

According to Climate News, the study was led by Marco Grasso, professor of political geography at the University of Milan-Bicocca, and the Center for Climate Accountability’s Richard Heede. Heede produced the landmark Carbon Majors study, which in 2013 quantified for the first time the amount of historical carbon emissions attributable to the fossil fuel industry.

Building on the Carbon Majors database, which continues to record data on emissions from the largest polluters, and a survey of 738 climate economists, the new study estimates climate change will cause $99 trillion global economic damages between 2025 and 2050.

Of this, it attributes a “conservative” $23.2 trillion per year in GDP loss to the coal, oil and gas industry, and the rest to non-fossil polluters, governments and consumers. That works out at $893 billion a year. The study then focuses on the world’s 21 largest fossil fuel companies, pinning them down to a collective $209 billion annually.

By far the biggest sum ($43 billion) is attributed to Saudi Aramco, which produced the most emissions between 1988-2022. The researchers describe this as “substantial but low” compared to the $161 billion the company made in profit last year.

Exxon is next with attributed annual reparation payments of $18 billion.

However, the researchers exempted four state-owned fossil fuel companies in low-income states: National Iranian Oil Co, Coal India, Petroleos de Venezuela and Algeria’s Sonatrach. And they halved the liability for companies in six middle-income countries.

They did this to avoid penalising people in poorer countries who are more vulnerable to the impacts of climate change and have contributed much less historically.

Read the full story here.

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