Until now the fossil fuel industries have not had to account for the full costs to society of their products. Billions of dollars in climate-related expenses have been hidden inside the budgets for disaster recovery, health programs, national security and numerous other accounting sleights of hand that shield the rippling financial impacts of climate change from the press and the public.
But as the climate crisis intensifies, new studies are lifting the lid on the industry’s free pass, and revealing just how much society spends to keep fossil fuels flowing and responding to greenhouse-gas triggered extremes. One of them recently suggested the tab would be $70 trillion, or more than double the U.S. national debt.
That assessment appears in the peer-reviewed journal OneEarth, by Marco Grasso, a professor at the University of Milan, Italy, and Richard Heede, principal investigator for the Climate Accountability Institute. The authors call for “reparations” to those harmed by climate change. The money would go to public authorities who are often the first responders to the vast and expensive damage from petrochemical products. People no longer able to earn a livelihood from land degraded by droughts, floods or both could also be compensated, many of whom bear little responsibility for the emissions and have few resources with which to respond to their destructive impacts.
The call for “reparations” was backed up by a Climate Accountability Institute survey of 738 global economists, who assessed past patterns of climate-related expenditures and proposed $70 trillion as the figure that most closely approximates the coming costs from climate change through 2050.
The team started the clock on liability for climate pollution in 1988, the year that NASA scientist James Hansen testified to Congress about the human contribution to CO2 levels in the atmosphere, and the year that the U.N. created the Intergovernmental Panel on Climate Change, the global scientific body that has produced alarming assessments on the dangers of greenhouse gas emissions ever since. In 1988 the dangers from climate change were made clear, and the disinformation campaigns from the biggest oil companies began in earnest, and thus it’s the time, assert the authors, when the clock started ticking on liability for the damages.
They divided the $70 trillion figure among the three entities considered most responsible for climate damages: the world’s 21 top fossil fuel companies; the governments that permitted their pollution to continue; and the consumers who bought the fossil fuels. Each is liable for one-third of the damage. For each of the 21 companies listed as the world’s biggest emitters, they offer a detailed plan for payback between 2025 and 2050. Four of the companies are American, including ExxonMobil, which is assigned reparations over 25 years amounting to $478 billion. Similarly, based on their emissions since 1988, $330 billion is assigned to Chevron; $285 billion to Peabody Energy; and $208 billion to ConocoPhillips, to be paid down annually over the coming 25 years.
They also clarify that the payoff schedule for the companies would be doable, citing the enormous profits of the industry — $2.8 billion per day since 1970. They assert, for example, that ExxonMobil’s third quarter profit alone last year of $19.7 billion would be less than its yearly reparation payment of $18.4 billion.
The authors concede that the details as to how the payments would be collected and who would divvy them up are yet to be worked out. The U.S. government, as one of those that took decades before acting to aggressively slow greenhouse gas pollution, might both contribute to and receive from whatever fund is created. But the aim, say the authors, is to “lead to a fairer distribution of the burden of fighting climate change,” and direct the funds to mitigate emissions, fund adaptation and provide compensation to the victims harmed by climate extremes.
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