€8 Trillion in Damage by Five Oil Firms

A new study shows for the first time how much economic damage specific oil companies have caused through their harmful emissions. According to the study, just five oil and gas companies are responsible for costs of €8 trillion. That is twice as much as the entire world spent on development aid over 30 years. But the corporations are not paying for the damage. While they make huge profits with their harmful practices, the public is left with the cost of the climate crisis. For now – because studies like this one could hold them accountable in court in the future.

A new American study published in the journal Nature shows for the first time to what extent individual corporations are responsible for the economic damage of the climate crisis. Researchers Christopher Callahan and Justin Mankin calculated that between 1991 and 2020, just five companies caused €8 trillion in damage through greenhouse gases. These are the oil and gas companies Saudi Aramco, Gazprom, Chevron, ExxonMobil, and BP. That is about twice as much as was spent worldwide on development aid in the same period.

In total, the researchers examined 111 corporations. Based on their emissions, they are responsible for climate damage totaling €24 trillion ($28 trillion). That is significantly more than the entire EU produced economically last year.

First Time: Global Climate Damage Attributed to Individual Oil Corporations

The study marks a milestone in climate research: For the first time, the link between emissions from individual corporations and the economic damage they caused is scientifically quantified. The researchers used a model that allowed them to trace regional economic losses caused by extreme heat back to the emissions of specific fossil fuel companies. Since there are fluctuations in the damage caused, the study used an average value. According to the study, oil giant Saudi Aramco is responsible for damage totaling €1.8 trillion – with a fluctuation range between €747 billion and €3.2 trillion.

The total amount of climate costs could be even higher. That’s because the authors only analyzed costs resulting from extreme heat. Other natural disasters connected to global warming, like flooding or sea level rise, were not included in the calculation.

Climate: Corporations Could Face Lawsuits

The new study is an important step in answering a key question: Who is responsible for the climate crisis? And who should ultimately pay for the damage? In the early 2000s, scientists began asking whether this responsibility could ever be proven. They wanted to know if it was possible to link emissions from individual companies directly to climate change.

“Just over 20 years later, we can answer that question with yes,” says study author Justin Mankin. “Our framework can provide robust emissions-based attribution of climate damages at the corporate level.”

This has not just scientific importance, but legal meaning too. Because the ability to attribute climate damage to specific companies could create a legal lever to hold them liable. In the U.S. states of Vermont and New York, there are already laws targeting major fossil fuel companies. These laws require them to help cover the costs of disasters that can be clearly linked to their CO₂ emissions. There are still lawsuits challenging these laws, but studies like this one could pave the way for more climate justice in court. This could also mean that in Europe, the biggest climate offenders might soon be held financially responsible – not just morally.

Study Author: Oil and Gas Companies Are Responsible for the Damage

So far, large corporations have profited from their climate-damaging products – but contributed nothing to cover the costs of the climate crisis. Unlike governments and the general public. People do use oil and gas products in daily life, but they are left alone to pay the price of climate change. Study author Christopher Callahan says that the wealth of the Western world is built on fossil fuels:

“But just like a pharmaceutical company isn’t excused from the negative effects of a drug – just because it also brings benefits – fossil fuel companies shouldn’t be let off the hook for the damage they caused, just because their products led to economic growth.”