Big Oil must pay for climate change. Now we can calculate how much

Sep 10, 2017 by

It is possible for scientific evidence to help apportion responsibility for climate damages among fossil fuel producers. Our paper shows how

harvey flood
‘As we found in the 2008 financial crisis, allowing companies to make private profits while society at large underwrites the risk ends badly for everyone.’ Photograph: Scott Olson/Getty Images

As communities in coastal Texas and Louisiana confront the damage wrought by Hurricane Harvey, another hurricane, Irma, fueled by abnormally warm waters, is barreling into the Caribbean and threatening Puerto Rico and Florida.

We know that the costs of both hurricanes will be enormous and that climate change will have made them far larger than they would have been otherwise. How much larger? Careful studies will take time but the evidence that climate change is warming ocean waters, increasing both sea level and the risk of extreme precipitation in these regions is well established.

On 29 October 2012, when Hurricane Sandy slammed into America’s east coast, a storm surge of more than nine feet caused extensive flooding damage throughout the affected region. Researchers have since determined that the damage from that storm surge was greatly worsened by climate change.

Sea level along the East Coast has risen by about eight inches since 1900, as oceans have warmed and expanded in response to rising concentrations of carbon dioxide and other heat-trapping gases in the atmosphere, with subsiding land adding insult to injury. According to one study, sea level rise increased Sandy’s flood damages to property in New York City alone by $2bn – more than $230 per New Yorker.

Such costs from storm damage attributable to climate change are just one piece of the story. New York City estimates that it will spend an estimated $19.5bn to prepare for climate change impacts through 2030. And researchers say developing countries most vulnerable to rising seas and increasing extreme weather will need between $140bn and $300bn annually by 2030 to help them cope.

Who should pay these costs? In the United States, the default assumption is that costs of climate damages and adaptation should be borne by taxpayers, through flood insurance programs, federal disaster relief funds and the like, as well as by affected individuals, families and private businesses.

This assumption is now being challenged in the courts. Lawsuits filed in July by three coastal California communities against ExxonMobil, Chevron, BP and other large fossil fuel companies argue that the companies, not taxpayers and residents, should bear the cost of damages from rising seas.

They draw on extensive evidence that fossil fuel companies, knowing that their products contributed substantially to climate change, engaged for decades in a coordinated campaign to publicly disparage climate science to avoid limits on emissions.

These lawsuits build on a vigorous and growing debate in the court of public opinion and among company shareholders about the responsibilities of fossil fuel giants for their contributions to climate change.

This is a debate fueled by high-profile evidence of some companies’ deception, the growing and devastating human and economic costs of climate change, and the recognition that even today fossil fuel companies maintain business models that assume the continued global reliance on their products that would drive heat-trapping emissions and temperatures well above the Paris agreement limits that some of the same companies profess to support.

Today, we and several colleagues are publishing a peer-reviewed paper in the journal Climatic Change that shows it is possible for scientific evidence to help apportion responsibility for climate damages among fossil fuel producers.

Using a simple, well-established climate model, our study for the first time quantifies the amount of sea level rise and increase in global surface temperatures that can be traced to the emissions from specific fossil fuel companies.

Strikingly, nearly 30% of the rise in global sea level between 1880 and 2010 resulted from emissions traced to the 90 largest carbon producers. Emissions traced to the 20 companies named in California communities’ lawsuits contributed 10% of global sea level rise over the same period. More than 6% of the rise in global sea level resulted from emissions traced to ExxonMobil, Chevron and BP, the three largest contributors.

We have the data needed to link the emissions traced to products sold by a fossil fuel company to a specific share of changes in temperature and sea level rise. Determining who should pay what for climate damages is a social and political question. But this kind of scientific work can help inform public and policy debate over the issue and potentially offers an approach that can help juries and judges to monetize damages in cases like the California communities’ lawsuits.

Plainly, companies should not be at liberty to persist for decades in selling products as safe to use when they know they are harmful and have alternatives available to them. Upon learning of the risks of their products, companies could have used their considerable technical and financial resources to greatly accelerate carbon storage and clean energy technologies.

Many, even within the fossil fuel industry itself, are arguing they can still change course, but it is hard to justify the immediate cost to shareholders when just using the atmosphere as a waste dump and leaving impacted communities, taxpayers and future generations to deal with the consequences appears to be a risk-free alternative. But, as we found in the 2008 financial crisis, allowing companies to make private profits while society at large underwrites the risk ends badly for everyone.

It may take tens to hundreds of billions of dollars to support disaster relief and recovery among Gulf coast communities affected by Hurricane Harvey. ExxonMobil, Chevron and BP have collectively pledged only $2.75m.

As scientists further identify the role that climate change has made to exacerbating this tragedy, courts of law and public opinion should judge whether they are paying their fair share.

  • Peter C Frumhoff is the Director of Science and Policy at the Union of Concerned Scientists. Myles R Allen is Professor of Geosystem Science in the School of Geoography and the Environment, University of Oxford

1 Comment

  1. It seems ever more likely that counties and organisations can win compensation claims in Court. This especially against Corporations that deliberately have deceived the Public. If subjective culpability can be established, compensation claims for damages can be substantial. However, even Corporations that have not deceived anybody, risk having to pay for damages based on objective liability. Fossil fuel Companies should expect to have to pay for damages simply because their business Activity entails damages.

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