Making Polluters Pay: Estimates for corporate climate debt and reparations
The question of who pays for climate change is fundamental to climate justice. Within the UNFCCC, it has long been recognised and agreed that rich and lower income countries have “common but differentiated responsibilities” for climate change (meaning that all should take action but some bear a greater responsibility than others), and that rich countries should transfer finance as an obligation to the global south. Yet the current levels of financial transfers are completely insufficient to support adaptation and mitigation in the global south, there is no funding for the loss and damage caused by climate change, and the question of who pays within rich countries has been left unresolved.
This paper argues that fossil fuel corporations in the global north have a distinct responsibility for creating and accelerating climate chaos, and as such should make reparations to affected communities. One key element in any such reparative process would be to tax corporations significantly more, and to use at least some of the funds to provide increased financial transfers to the global south.
Below, we find that:
- The Big 5 oil companies (Chevron, ExxonMobil, BP, Shell and TotalEnergies), who have reported over $170 billion in profit in 2022 alone, are collectively responsible for 11.38% of global historic CO2 emissions, or 11.19% of historic CO2e emissions [Table 1].
- The historic emissions of these five companies are more than 4 times the historic CO2 emissions of the 150 least emitting countries combined, and more than 28 times the collective emissions of the Least Developed Countries [Table 2].
- Based on these historic emissions, BP could be responsible for an estimated $6.5-$13 billion of loss and damage to the global south each year by 2030. Similarly, Shell could be responsible for $6.2-$12.4 billion a year by 2030 [Tables 3 and 4].
- Collectively, the Big 5 could be responsible for $32.5-$64.9 billion a year of loss and damage to the global south by 2030, and $1.7-$3.1 trillion in total between 2020 and 2050 [Table 4].
- When the costs of mitigation (reducing greenhouse gas emissions) and adaptation (adapting to climate impacts) to the global south until 2050 are also taken into account, the Big 5 would be responsible for approximately $7.8-$8.6 trillion [Tables 5-7].
- At the very least, BP’s responsibility for those costs would be approximately $1.56 trillion, while Shell’s would be $1.49 trillion [Table 7].
In support of reparative climate justice and a partial atonement for this climate debt, the operations of fossil fuel corporations must be drastically reduced, while ‘climate justice taxes’ should be introduced on corporate profits, carbon emissions and financial transactions supporting fossil fuel companies.