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The profits made by the world’s 25 biggest oil and gas companies easily cover the climate damage caused by their emissions, a new report has found.

The damages caused between 1985 and 2018 amounted to $20tn, while the profits made totalled $30tn, according to research by the think tank Climate Analytics.

The top 12 emitters – Aramco, Gazprom, the National Iranian Oil Co., Exxon, Pemex, Shell and BP – accounted for $15tn of the damages and $21tn of the profits.

“These oil and gas majors have known about climate change for decades, yet they have doubled down on their business model”, said lead author Dr Carl-Friedrich Schleussner.

“They have reaped massive financial gains, while climate change has intensified and left vulnerable peoples, and particularly developing countries, footing the bill.”

Damage caused and profits made by 12 highest emitting fossil fuel companies 

Company Damage ($tn) Profit ($tn)
Saudi Aramco 2.8 5.4
Gazprom 2.2 2.9
National Iranian Oil Co. 1.4 2.4
Exxon Mobil 1.2 1.2
Pemex 1.1 1.2
Shell 1.1 0.9
BP 1.0 0.7
Chevron 0.9 0.6
PetroChina 0.9 1.3
Abu Dhabi National Oil Co. 0.7 1.7
Petroleos de Venezuela 0.7 1.1
Kuwait Petroleum Corp. 0.6 1.4

Last year, when fossil fuel prices shot up, in part due to the Russian invasion of Ukraine, the profits made by seven majors were almost twice the cost of the damages that year – $497bn vs $260bn. This was the year when the boss of Aramco said the company had made “probably the highest net income ever recorded in the corporate world”.

Cover up

Climate Analytics said the numbers were calculated using a “middle of the road” estimate for the social cost of carbon of $185 per tonne of CO2. Only one third of the total cost of global damages associated with emissions from the majors was attributed to them. Equal responsibility was shared with policymakers and consumers. Had full responsibility been attributed to the majors, the damage caused would have been $60tn.

The report highlighted how fossil fuel companies had been aware of the environmental implications of their business for decades. Not only did they refuse to act, nor even simply cover up the truth, but they actively promoted false and misleading climate change claims, undermining scientific consensus, the report said. “Evidence from internal emails shows that this was driven by a desire to protect their oil and gas business”, it added.

The report also looked at sovereign wealth funds (SWFs), created largely on the back profits from oil and gas extraction. For example, the UAE, home to COP28 kicking off later this month, has the largest SWFs combined. Half its funds, the report found, could pay for the damages caused by emissions from the country’s oil and gas industry between 1985 and 2018, and still have $700bn left over.

Given the global impact of fossil fuel emissions, the report questioned whether SWFs should contribute to a loss and damage fund to assist developing countries in dealing with the impacts of climate change.

Loss and damage

Loss and damage will be one of the key issues discussed at COP28. Barbados Prime Minister Mia Mottley has specifically called for a 10% tax on oil and gas companies with the proceeds paid into a loss and damage fund.

“After last year’s super profits some of these companies are walking back their climate commitments, showing that we can’t rely on them to do this on their own – certainly not at the pace that we need”, said Schleussner. 

“Governments should step in and tax polluters to pay for the loss and damage they are causing.