The dollar cost of emissions

A new study has just put a price tag on climate change – and it’s eye-watering.  

Carbon majors and the scientific case for climate liability, published in Nature journal has delivered one of the most damning receipts yet on the fossil fuel industry’s role in our overheating planet. The results are staggering. The research tracked 111 of the world’s biggest fossil fuel producers – companies such as Chevron, Gazprom, BP and ExxonMobil, as well as Australia-based Santos, Whitehaven, Woodside and BHP – to evaluate the true economic cost of their emissions.  

Most of the damage measured was due to extreme heat, so we’re talking about impacts like lost crops and livestock, and scorched infrastructure, which can be translated into direct economic losses.  

And the losses add up to trillions. That’s right – trillions, with twelve zeroes.   

They estimate that US$28 trillion (or $28 million-million – sorry, we’re still trying to get our heads around that number ourselves) in global economic losses since 1990 can be directly linked to heatwaves driven by fossil fuel emissions. In fact, every 1% of greenhouse gas put into the atmosphere since 1990 has caused US$502 billion in damage from heat alone. The world would be $28 trillion richer without these 111 fossil fuel firms.  

This is real, measurable harm pinned to real companies.  

Using emissions data from the public Carbon Majors database, two climate scientists from Dartmouth College in the US used 1,000 different computer simulations to map those emissions against changes in Earth’s average temperature, and compare it to a scenario without that company’s emissions. 

Because the study doesn’t include the extra billions of damage caused by cyclones, hurricanes, floods and other climate variables, the real costs are likely much higher. But it does directly connect economic harm to major emitters.  

Let’s break it down.  

Worst emissions record: Chevron 

At the top of the emissions leaderboard, oil giant Chevron is reportedly responsible for somewhere between US$791 billion and $3.6 trillion in damages. That’s just from one company.  

Thanks to Chevron’s emissions, our unique little blue planet has warmed by 0.025°C more than it would have without Chevron. This sounds small, but that’s the kind of nudge that turns ‘record breaking’ into ‘life threatening’ when it comes to heatwaves, coral bleaching and bushfire risk.  

And the pattern repeats. The paper’s authors calculated that every 1% of greenhouse gases added to the atmosphere since 1990 has caused about $502 billion in heat-related damages. We’re still struggling with the numbers here (they’re just too big for our mortal brains to cope with) but they tell a simple story: burning fossil fuels comes at an astronomic cost.  

Aussie emitters in the hot seat 

Australia’s top fossil fuel companies have made the wall of shame in this report, too. The authors found that emissions from just five Australia-based firms: BHP, Rio Tinto, Santos, Whitehaven Coal and Woodside Energy – have together caused around US$682 billion (more than A$1 trillion) in global climate damage.  

These companies sit quietly in the superannuation portfolios of most Australians, no questions asked. But this research reframes them not as index darlings, but massive liabilities. Every tonne of carbon they’ve spewed has added to a growing climate debt – that someone, someday, is going to have to pay.  

Climate damage = financial damage 

This study demonstrates what responsible investors have understood for years: climate change isn’t just an environmental or political issue. It’s hitting businesses and economies everywhere. But the price is being paid by people, communities and governments around the world – not by the companies who caused the damage.  

If these companies are racking up trillions in global damage, how long before they’re made to pay for it?  Several US states are already introducing charges on fossil fuel companies to help pay for things like climate adaptation, nature-based climate solutions and public health measures. Consumers, governments and investors are increasingly demanding accountability. 

Future Super does not invest in fossil fuel companies because we want to build a future worth retiring into.   

But even for those investors motivated only by profit, investing in high emitters like Chevron, BHP and Woodside  may look like poor value when you look at the potential legal, reputational and financial risks associated with their activities.  

So far, these top emitters have had nothing to say for themselves. But this kind of accountability matters. If we want a liveable future, investors can’t keep handing cash to the same corporations that are burning it down.  

This study is a loud reminder that in the long term, fossil fuel investments come with serious baggage.  

Joining a super fund that doesn’t invest in fossil fuel companies is one of the most powerful things you can do to combat climate change.  

See Ethical Investing for information about screening and investment processes, and what we mean by fossil fuel companies.