Should Fossil Fuel Giants Pay for Climate Change Damages?

“The battle for 1.5 degrees will be won or lost in the 2020s under the watch of leaders today.

“It all depends on the decisions those leaders take, or fail to take, especially in the next 18 months. It's climate crunch time.”

This was the message from UN Secretary General António Guterres in a special address on the state of the climate crisis on World Environment Day.

After criticising “finger pointing”, he has a direct message of action against fossil fuel giants.

“I call on advertising and PR companies to stop taking on new fossil fuel clients, from today, and set out plans to drop your existing ones,” he said.

“And I urge every country to ban advertising from fossil fuel companies, and every news media and tech company to stop taking fossil fuel advertising.”

Should polluters pay?

Vermont is a step ahead, as it takes strides to support its communities and infrastructure damaged by climate change. The American state saw catastrophic summer flooding and damage from other extreme weather that left communities devastated, roads ripped away and houses devastated. 

Part of the solution? The state is turning to fossil fuel companies to pay for the damage. 

“For too long, giant fossil fuel companies have knowingly lit the match of climate disruption without being required to do a thing to put out the fire,” says Paul Burns, Executive Director of the Vermont Public Interest Research Group. 

“Finally, maybe for the first time anywhere, Vermont is going to hold the companies most responsible for climate-driven floods, fires and heat waves financially accountable for a fair share of the damages they’ve caused.”

The new legislation will see a report created by the Vermont state treasurer, in consultation with the Agency of Natural Resources, to total the cost to the state and its people caused by the emission of greenhouse gases from January 1, 1995, to December 31, 2024. 

This will include the effects on public health, natural resources, agriculture, economic development, housing and other areas. The polluter-pays model then uses federal data to determine the amount of covered greenhouse gas emissions attributed to a fossil fuel company.

Naturally, the oil and gas industry is not happy.

“The legislation retroactively imposes costs and liability on prior activities that were legal, violates equal protection and due process rights by holding companies responsible for the actions of society at large; and is pre-empted by federal law,” says The American Petroleum Institute.

“This punitive new fee represents yet another step in a coordinated campaign to undermine America’s energy advantage and the economic and national security benefits it provides,” says Scott Lauermann, Senior Manager, Media Relations and Rapid Response at The American Petroleum Institute.

Energy targets are not in line with COP28 climate goals

This action against oil and gas companies comes as the International Energy Agency (IEA) reports that, despite commitments to transition to renewable energy, countries’ ambitions and implementation plans are not in line with goals set at COP28.

“By delivering on the goals agreed at COP28 – including tripling renewables and doubling energy efficiency improvements by 2030 – countries worldwide have a major opportunity to accelerate progress towards a more secure, affordable and sustainable energy system,” said Dr Fatih Birol, the IEA’s Executive Chairman.

“The IEA will continue to support governments around the world in efforts to achieve this.”

This comes is despite global investment in clean energy being set to reach almost double the amount going into fossil fuels in 2024. 

Total energy investment worldwide is expected to exceed US$3tn in 2024 for the first time, with US$2tn set to go toward clean technologies including renewables, electric vehicles, nuclear power, grids, storage, low-emissions fuels, efficiency improvements and heat pumps. The remainder, slightly over US$1tn, is going to coal, gas and oil.

“Clean energy investment is setting new records even in challenging economic conditions, highlighting the momentum behind the new global energy economy. For every dollar going to fossil fuels today, almost two dollars are invested in clean energy,” Fatih says. 

“The rise in clean energy spending is underpinned by strong economics, by continued cost reductions and by considerations of energy security. But there is a strong element of industrial policy, too, as major economies compete for advantage in new clean energy supply chains. 

“More must be done to ensure that investment reaches the places where it is needed most, in particular the developing economies where access to affordable, sustainable and secure energy is severely lacking today.”

Can we expect hard action on gas and oil at COP29?

October will see leaders from around the world gather at COP29 to explore climate action and put legislation in place to attempt to meet the warming targets set in the Paris Agreement.

“Our future rests on us coming together to build the fair and ambitious solutions needed to cut greenhouse gas emissions and build a resilient world,” said COP29 President-Designate Mukhtar Babayev this week at the Bonn Climate Change Conference.

While energy was discussed, there seems to be no strong action against gas and oil companies planned.

“We have organised high level dialogues with the International Energy Agency to deliberate on energy outcomes of the Global Stocktake,” said COP29 Lead Negotiator Yalchin Rafiyev.

“The Global Stocktake found that adaptation efforts are not on track to achieve our long-term goals. The COP29 Presidency acknowledges this urgency and is emphasising the importance of adaptation in all its engagements.”

This comes after the leadership of COP28, held in Dubai at the end of 2023, was under scrutiny – the President, Dr Sultan Al Jaber, is head of the Abu Dhabi National Oil Company. The COP29 President has also spent most of his career working in the oil and gas industry.

Environmentalists have questioned if these leaders are in the best position to make the firm decisions that the UN and IEA are calling for.

“I believe that COP29 will be a litmus test for the Paris Agreement and global climate action,” Yalchin said.

******

Make sure you check out the latest edition of Sustainability Magazine and also sign up to our global conference series - Sustainability LIVE 2024

******

Sustainability Magazine is a BizClik brand

******