The business case for renewable energy and CO2 reduction is changing as carbon tracking and court cases shift focus from carbon emitters to the ultimate producers of coal, oil and natural gas … to the “carbon majors.”
A 2013 study published in the journal Climatic Change cites 90 companies by name and responsible for 63% of human induced greenhouse gas emissions since the beginning of the industrial revolution. National industrial plans (NIPs) and energy companies from the US and Europe dominate the list with familiar names like ChevronTexaco, ExxonMobil, Saudi Aramco, British Coal, and RWE.
Qatar Petroleum (QP) is listed as a carbon major, ranking 44 out of 90 in the long-term historic data, but as high as 20 using benchmark data for 2010 only. The new study to assign blame for carbon emissions and climate change is largely academic … for now. But the report has significant implications for climate negotiations and lawsuits:
- Damage claims against carbon majors have started.
- Energy Intelligence states “We’re in the early stages, much like cigarette litigation in the 1960s.” Independent lawyers commenting on the new cases state “the legal arguments against the carbon majors will gain ground and traction, and be successful.”1
- The website of the Climate Justice Program lists prior and new lawsuits against carbon majors. Claims start at $400MM. New and emerging plaintiffs include island nations, Indian tribes, and national health plans;
- THE UN Framework Convention on Climate Change typically assigns blame on a country level, but has cited the report.
- The Warsaw Mechanism for Loss and Damages lists the report as primary evidence for multi-national climate change compensation.
Initiating litigation is one ting, but securing cash could be complicated. Prior cases to date have failed, not on merit, but legal technicalities. At the same time, according to Richard Heede, the reports author, “determining responsibility in any kind of moral or legal sense depends on when consensus emerged on climate change. Nobody is blaming companies for production in the 1920s or the 1950s, before climate science was even born.” He also states “the scientific consensus materialized in the late 1970s or 1980s and that is where you want to start the clock.”2 The report was commissioned by nonprofit groups Climate Justice Programme and Greenpeace International.
The data behind the Climactic Change study reveals:
- 914 gigatonnes (Gt) of CO2 equivalent was produced by the 90 carbon majors since 1854:
- 315 Gt can be traced to public companies and 288 Gt to state-owned companies;
- 89% of the CO2 is linked to marketed oil, gas and coal products;
- 7.5% is “fugitive methane” released in energy production; and
- 2.0% is from methane flaring, vented CO2, or own fuel use.
The new data provides another lens to examine energy and climate policy. The report highlights the latent risks to be mitigated when New Energy technology is core to company and national business models.