In 2022 Aramco announced what its CEO called “probably the highest net income ever recorded in the corporate world.”

Supply disruptions resulting from the illegal invasion of Ukraine by Russia - the largest gas supplier to Europe - led to huge spikes in price for gas, which then bled into demand for other fossil fuels, tightening energy markets around the world and pushing up prices for goods across supply chains.

Meanwhile, unprecedented disasters fuelled by climate change made the case for a robust funding mechanism for loss and damage more pressing. The 2022 United Nations’ climate conference saw a breakthrough, with the agreement to establish both a new fund for loss and damage and new funding arrangements.

In this report we explore who could pay for loss and damage through the lens of responsibility for historic emissions, and the financial gains generated from selling oil and gas.

We use a well-established methodology - the social cost of carbon - to calculate damage estimates from the 25 biggest emitting oil and gas companies in the world from 1985 to 2018, and compare it with the financial gains made over the same period. We look at Scopes 1, 2 and 3 emissions in our estimate of the total damages resulting from emissions attributable to fossil fuel companies.

To account for the potential responsibility of other actors such as consumers and policymakers, we also explore an established approach that uses a clean third split between producers, emitters and policymakers. We refer to this as partial damage allocation.

Between 1985 and 2018, we estimate partial damages of the combined CO2 emissions from 25 companies - oil and gas carbon majors - of about 20 trillion USD. Over the same time period, their financial gains were about 50% larger - roughly 30 trillion USD.

Carbon majors could have paid for their damages and still made 10 trillion USD.

The dirtiest dozen

The dirtiest dozen of the carbon majors account for about 15 trillion USD in damages and 21 trillion USD in gains.

Carbon majors figures — Estimated partial damages linked to emissions attributable to the 12 highest emitting fossil fuel companies and their respective financial gains between 1985-2018 by company and country in 2020 USD trillions.

Saudi Arabia, Russia, Iran, China and the United Arab Emirates are home to the largest state-owned carbon majors with both the largest financial gains and damages incurred. Of the private companies, ExxonMobil, Shell, BP, Chevron and TotalEnergies were responsible for the highest damages and saw the biggest financial gains.

For a subset of seven carbon majors including Aramco, Exxon Mobil, and Shell, we provide estimates for 2022. These seven carbon majors together amassed 497 billion USD in financial gains in 2022 compared to 260 billion USD in partial damage estimates. In other words, financial gains were almost twice the estimated partial damages.

Self-perpetuating fossil wealth

Several countries channel parts of their fossil fuel gains into some of the biggest sovereign wealth funds world-wide. The sheer size of the funds, and their returns, points to the persistence of fossil-accumulated wealth well beyond extraction.

The United Arab Emirates is home to the biggest combined sovereign wealth funds in the world. Half of its funds could pay for the damages associated with its oil and gas industry, and it would still have 700 billion USD in wealth.

The United Nations Secretary General and leaders of vulnerable countries have called for the use of windfall taxes to redistribute huge profits from carbon majors (which look set to continue) for loss and damage funding. Governments that are home to these carbon majors, or perhaps the companies themselves, could well be called on to contribute to a loss and damage fund. It’s clear they are good for it.

Loss and damage

Publications

Calculating the loss and damage finance gap: a scoping and feasibility exercise

At COP28, delegates agreed to operationalise a fund to compensate vulnerable countries coping with loss and damage caused by climate change. This report proposes a method for how to calculate how much finance the Global South needs for loss and damage.

Economic and non-economic loss and damage: a harmful dichotomy?

Loss and damage is treated as comprising separate ‘economic’ and ‘non-economic’ dimensions. This commentary argues that the two are inextricably linked and applied research should account for the multifaceted and cascading nature of loss and damage.

How can event attribution science underpin financial decisions on Loss and Damage?

With climate extremes hitting nations across the globe, disproportionately burdening vulnerable developing countries, funding for loss and damage is an acute need. Attribution science can provide useful information for decision makers.

Using existing databases to report on loss and damage in Biennial Transparency Reports under the UNFCCC

Calculating financing needs to respond to loss and damage requires response activities to be costed. However, comprehensive assessments of current and future loss and damage costs are largely unavailable. This briefing proposes using existing databases as proxies in the interim.

A review of loss and damage in the Caribbean (1994 to 2024)

Loss and damage from climate change has been the lived reality of Caribbean small island developing states (SIDS) for decades. Despite efforts to adapt, it is reversing development gains, leaving lasting financial stress, and causing irreparable damage, including the loss of cultural heritage. This report is the first to provide a systematic overview of how Caribbean countries are framing and reporting on loss and damage.

The impacts of multiple tropical cyclone events and associated precipitation on household income and expenditures

Climate change-fueled tropical cyclones have already reduced household incomes across the Philippines by 7% on average, according to a new study. This figure rises to more than 20% in some provinces.

The 1.5°C limit and risks of overshoot

This briefing looks at what the 1.5°C limit means in terms of adaptation and loss and damage for the most vulnerable countries and regions. It finds that slowing down warming is critical to buy us time to adapt and also to avoid irreversible loss and damage. Even if warming rises above 1.5°C (overshoot) we can bring it down again with ambitious emissions reductions.

Le seuil de +1,5°C et le risque de dépassement de ce seuil

Ce rapport examine ce que la limite de 1,5 °C signifie en termes d'adaptation et de pertes et dommages pour les pays et régions les plus vulnérables. Il constate qu'il est essentiel de ralentir le réchauffement pour nous donner le temps de nous adapter et pour éviter des pertes et des dommages irréversibles. Même si le réchauffement dépasse 1,5 °C, nous pouvons le faire baisser à nouveau en réduisant les émissions de manière ambitieuse.

Climate justice: loss and damage and the right to development

Our Submission to the Special Rapporteur on the Right to Development 2024 offers advice on how to set up the administration and operationalisation of the Loss and Damage Fund with a human rights-based approach and a climate justice lens that supports the right to development.

Climate justice and loss and damage: perspectives from the global south

This article outlines the loss and damage debate through a climate justice lens with particular emphasis on Small Island Developing States and Least Developed Countries. It examines the latest developments of the new loss and damage fund including operationalisation.

Coastal loss and damage for small islands

This commentary on a paper in Nature Sustainability reviews how the study quantifies the impacts of sea-level rise on small island states and estimates the impacts in terms of cost, land loss and population exposure across all small islands worldwide.

The effects of political knowledge use by developing country negotiators in Loss and Damage negotiations

This article traces how developing country negotiators used knowledge to further their interests in loss and damage negotiations from 2003 to 2013.

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Carbon majors’ trillion dollar damages