Time to pay the piper: Fossil fuel companies’ reparations for climate damages: One Earth


The calls for climate reparations are rapidly growing in the scientific literature, among climate movements, and in the policy debate. This article proposes morally based reparations for oil, gas, and coal producers, presents a methodological approach for their implementation, and quantifies reparations for the top twenty-one fossil fuel companies.

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Human-caused climate change has long been acknowledged as essentially an ethical issue that threatens humanity and ravages the planet. While the Global North’s historical carbon emissions have exceeded their fair share of the planetary boundary by an estimated 92%, the impacts of climate breakdown fall disproportionally on the Global South, which is responsible for a trivial share—Africa, Asia, and Latin America contribute only 8%—of excess emissions. 1
At the same time, the world’s richest 1% of the population contributed 15% of emissions between 1990 and 2015, more than twice as much as the poorest 50%, who contributed just 7% but who suffer the brunt of climate harm. 2
This inequity is exacerbated by poorer societies’ lack of resources to adapt to climate impacts and by the persistent reluctance of the Global North to provide them with the necessary funding and assistance as required by the principle of common but differentiated responsibilities and respective capabilities (CBDR-RC) of article 3 of the UNFCCC.
The climate crisis and its rapidly increasing economic burdens bring to the forefront a question that has been poorly investigated, but bluntly recalled in the 2022 IPCC report on impacts, adaptation, and vulnerability 3
: who should bear the cost of the harm caused by anthropogenic climate change? Is it states, or affected individuals, families, and businesses? Is it future generations, who had no role in creating the harm? Or should the burden fall on those agents that have contributed the most to global climate disruption, while in the meantime greatly profiting?
The costs of anthropogenic climate change are chiefly borne by states that compensate their own citizens harmed by climate impacts or contribute to international adaptation finance, by insurance companies with regard to their insureds, and by uncompensated victims of climate change. We argue that other agents bear substantial responsibility for the cost of redressing climate harm: the companies that engage in the exploration, production, refining, and distribution of oil, gas, and coal. The recent progress in climate attribution science makes it evident that these companies have played a major role in the accumulation and escalation of such costs by providing gigatonnes of carbon fuels to the global economy while willfully ignoring foreseeable climate harm. 4
All the while they successfully shaped the public narrative on climate change through disinformation, misleading “advertorials,” lobbying, and political donations to delay action directly or through trade associations and other surrogates. 5

Fossil fuel companies have a moral responsibility to affected parties for climate harm and have a duty to rectify such harm. 6
Moral theory 6
and common sense—as well as international environmental agreements through the polluter pays principle embodied in article 16 of the 1992 Rio Declaration, which calls for the “internalization of environmental costs”—demand that historical wrongdoing must be rectified. A direct way to do so is through payment of reparations to wronged parties, 8
which in the context of the climate crisis are a historically informed account of distributive justice. 9
In the case of the carbon fuel industry, reparations require that companies relinquish part of their tainted wealth to provide affected subjects with financial means for coping with climate harm, consistent with the climate justice movement’s core demand that fossil fuel companies repay their impacts debt. This is the moral rationale for reparations in the form of financial rectification by fossil fuel companies in the context of climate change. 10
Additionally, on a practical level the insufficiency of funding for adaptation under the UNFCCC Green Climate Fund and the lengthy process for the operationalization and the adequate financing of the Loss and Damage fund—so far the only tangible outcome of the 2013 Warsaw International Mechanism (WIM)—established at the 2022 Sharm El Sheikh COP 27 require other culpable agents—e.g., fossil fuel companies—to complement state-centric international governance to cope with the cost of climate damages.

Here, we reframe the debate on international funding to tackle climate impacts by focusing on the financial responsibility of fossil fuel companies for climate harm. We argue that fossil fuel producers contributed to climate harm through their operational and product emissions, have a documented history of climate denial 11
and of discourse and practices of delay, 12
disinformed the public and their shareholders on climate science and corporate risks, are complicit in slowing down or defeating climate legislation, and must be held accountable for climate harm by paying reparations. To this end, we present a morally grounded methodological approach for implementing reparations and quantify them for the top twenty-one fossil fuel producers based on their operational and product-related emissions from 1988 to 2022 and on the economic situation of the people in the countries where they are based.
The following analysis is a starting point for open discussion of shared responsibility for climate harm and in particular of the financial duty owed by the fossil fuel industry to climate victims. Our work aims to lay the groundwork for further investigation into the role of the fossil fuel industry in climate change and should not be understood as a fully fledged policy proposal. While crucial, for purposes of this analysis we ignore a thorough identification of climate victims, the mechanisms of compelling payment of reparation funds, the governance and distribution of collected reparations, as well as the political feasibility of the approach developed and its relationships with the UNFCCC. A global reparations scheme, as proposed here, complements and is neither a substitute for climate finance under the UNFCCC nor for climate-related litigation filed in numerous jurisdictions based on varying legal theories against major oil, gas, and coal companies.

…(read more).

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