Who pays for the damage caused by the climate crisis? This is the question that inspired a groundbreaking study just published in the peer-reviewed journal One Earth. A question that is also dramatically topical in Italy these days because of the floods that devastated Emilia-Romagna, causing not only victims but also huge economic damage. The study is the first of its kind in the world and is based on a simple and stringent logic: since it is now clear that by far the main cause of global warming and therefore of the climate crisis is the use of fossil fuels (coal, oil and gas), in order to pay for the damage caused by the climate gone mad, we must go beating the drum to those who extract, produce and circulate this 'poison', climatically speaking. Namely Big Oil, the major oil and gas companies and the fossil fuel industry in general. On which the study estimates in fact its focus.

The 21 largest fossil fuel companies in the world, according to the study, would be collectively responsible for an expected $209 billion per year in damages resulting from the climate crisis in the period 2025-2050. Over the entire period, the figure would touch USD $ 5.4 trillion. The study goes into detail for the individual companies. To Saudi Aramco and Exxon, for example, would be attributed annual liabilities of about $43 billion and $18 billion in damages, respectively. To Russia's Gazprom over $20 billion. Then Shell ($16.3 billion), BP ($14.5 billion), Chevron ($12.8 billion), Total Energies ($9.4 billion).

But how do we arrive at these figures? On the one hand, the study was based on data from the Carbon Majors Database, which takes into account the cumulative CO2 emissions (operational and product) of the most polluting companies on the planet, considering the period 1988-2022. On the other hand, an analysis conducted by almost 750 international climate economists quantified the expected global economic damage due to the climate crisis between 2025-2050 at USD $ 99 trillion. The value of the damage was then allocated to fossil fuel companies based on their respective cumulative emissions, calculated as a percentage of the emissions attributable to the global fossil fuel sector.

The figures, already huge, could have been even bigger if the study had not made a number of very conservative assumptions, i.e. if it had not been particularly cautious in allocating the 'blame' for the damages and thus the responsibility for paying them back. For example, from the $99 trillion mentioned above, the study dropped to $69.6 trillion by eliminating non-fossil fuel sources of global warming.

Of this, one-third was attributed to government action (or, rather, inaction), one-third to consumer behaviour, and only one-third ($23.2 trillion over the period, or $893 billion per year) to the global fossil fuel industry. Then there is the moral assumption that fossil fuel companies from low-income countries (such as National Iranian Oil or Coal India) have been exempted, and the liability of those from middle-income countries (Brazil's Petrobras, Mexico's Pemex, Gazprom itself) has been halved: This is in deference to a 'principle of need', i.e. taking into account the fact that, even in the context of an overt climate crisis, the populations of the least developed countries need to maximise the contribution to development (in terms of e.g. tax revenues, employment) offered by fossil companies.

The next question to be asked is how the results of this study can now be used, again with a view to obtaining reparations for the damage caused by the climate crisis. "With a study like this in hand," answers Professor Marco Grasso, University of Milan-Bicocca, lead author of the study together with Richard Heede, co-founder and director of the Climate Accountability Institute, "a judge has a solid basis to support a claim for damages, because this is the first time that objective numbers based on a scientific estimate of the damage of climate change have been put on paper. Lawsuits against fossil fuel companies are increasing all over the world. In the United States there is now open talk of claims for compensation for damages, but it could also happen in other systems”.

The ascertainment of damages, for example, is among the objectives of civil suit brought against Eni by Greenpeace, ReCommon and twelve Italian citizens for damages resulting from climate change to which the company is alleged to have contributed. "It is becoming increasingly refined," adds Professor Grasso, "that branch of climate science called attribution science linking a single extreme event to a specific source of climate-changing emissions: in the future it will be possible to make direct connections to attribute responsibility for the damage. When thinking about who should pay, one usually thinks of states, regional governments, insurance companies. But 'the elephant in the room' are the fossil fuel companies, who have very clear responsibilities and could help pay for the damage”.

Finally, it should be borne in mind that the study only considered the damage that can be calculated in terms of lost GDP (Gross Domestic Product): loss of life and livelihood, loss of ecosystem services, species extinctions, and other dimensions of well-being were not calculated. It is evident that by widening the view 'beyond GDP' the damage of the climate crisis will take off.

See, Clima, le prime 21 compagnie fossili mondiali ci costano 209 miliardi di dollari l’anno