Why measuring methane matters
Methane emission rates reported by major oil and gas companies are 94% lower than indicated by independent estimates of the…
Rising global temperatures impact the frequency and intensity of extreme weather events outside the boundaries of natural variability. While not the sole cause of the intensification of extreme weather, recent events such as heatwaves, droughts and floods would not have happened at the same frequency and intensity without the fossil fuel-driven influence on climate change.
More than 500 attribution studies have linked individual extreme weather events to climate change. Attribution science compares models of a world with and without increased greenhouse gas emissions using observed climate data to assess the extent to which climate change impacts extreme weather.
These studies have confirmed that heatwaves are now stronger and more likely due to human-caused climate change. Studies have also shown that climate change has driven the occurrence of compound events, including simultaneous heatwaves and floods, which have been particularly damaging to people and crops in affected regions.
With nearly 20 years of attribution studies to refer to, and evidence on the physical science behind climate change, it is now possible to link many extreme weather events to climate change without undertaking a dedicated study on a specific event (Table 1).
A larger proportion of attribution is certain in the Global North due to limited data in the Global South, where climate impacts are felt more severely. Researchers warn this may lead to underestimating the role of climate change in data-poor regions.
Climate change is caused by the emission of greenhouse gases which absorb energy, slow heat loss to space and act as a blanket trapping heat in the atmosphere. Human-caused greenhouse gas emissions get released into the atmosphere through burning fossil fuels (coal, oil and natural gas), deforestation and farming.
Fossil fuels account for around 69% of global carbon dioxide emissions since the industrial revolution. Of this, 80% is the output of the Carbon Majors.[1]Carbon Majors is the name applied to 122 large oil, gas, coal and cement firms whose production data has been tracked from the start of the industrial revolution in 1854.
In 2018, researchers reported that just 20 fossil fuel companies were responsible for over a third of global carbon dioxide (CO2) and methane emissions – 480 billion tonnes of CO2 equivalent – since 1965, when it is documented that the environmental impacts of fuels were known to industry leaders.
Without significant efforts to stop burning fossil fuels, we risk exceeding the Paris Agreement target of 1.5 degrees celsius, which will increase the prospect of earth systems reaching a climate tipping point, catalysing large and often irreversible changes to the climate. The United Nations Environment Programme’s (UNEP) 2023 production gap report found that more than double the amount of fossil fuel production is planned in 2030 than would be consistent with limiting warming to 1.5 degrees celsius.
The impacts of an increasingly warming world and the extreme weather events that come with it are experienced globally, but are particularly onerous for low-income countries. Research has found that “global warming has very likely exacerbated global economic inequality”. GDP per capita in tropical countries has fallen by a quarter since the 1960s relative to a world without climate change. Globally, a 1 degrees celsius increase in temperature could lead to a 12% decline in GDP.
The polluter pays principle is a widely accepted practice of placing the responsibility of negative externalities[2]A negative externality is when one party incurs the costs of a negative effect resulting from actions taken by another. In the last 20 years, moves have been taken to impose the costs of … Continue reading onto emitters, that is the fossil fuel companies whose products emit greenhouse gas. The principle can be applied through different approaches. One approach is a “carbon price”, which is leveraged through policy instruments such as a carbon tax or emissions trading system. Other approaches can include windfall taxes on excessive profits and legally mandated payments to cover loss and damage costs.
Based on the social cost of carbon (using an estimate of USD 185 per tonne), climate science and policy think tank Climate Analytics finds that the “dirtiest dozen” Carbon Majors are responsible for around USD 15 trillion in economic damages for production between 1985 to 2018, a period in which they earned USD 21 trillion in profits.[3]The methodology conservatively estimates that producers are responsible for one third of damages caused by fossil fuels’ greenhouse gas emissions.
The profits of fossil fuel companies are such that earnings in 2022 of seven of the largest carbon majors – including Aramco, ExxonMobil and Shell – were almost twice the calculated damages for that year, at USD 497 billion against USD 260 billion. And earnings continue to grow. In the aftermath of the 2022 gas crisis, Saudi Aramco’s CEO claimed the company had “probably the highest net income ever recorded in the corporate world”, with operational cash flow of USD 186 billion.
While research continues linking the emissions of the fossil fuel industry to estimates of monetary climate damages, the approach of holding the industry accountable is being put into practice through legal routes. More and more legal connections are being made between extreme weather and the fossil fuel industry, litigating and legislating to demand payments for loss and damage.
In May 2024 the US state of Vermont, hit by extensive flooding in 2023, passed a law that aims to force the fossil fuel industry to pay into a fund for climate damages that have hurt public health, agriculture, housing and other areas. The state could collect money from companies that emitted more than 1 billion tons of CO2 around the world from 1995 to 2024.
Those companies with a certain threshold of business activity in Vermont would be charged according to their percentage of global emissions, with the funds to be used to rebuild and upgrade infrastructure such as stormwater drainage systems, roads and bridges. Other states reportedly considering a similar approach include Massachusetts, Maryland and New York.
According to the LSE Grantham Research Institute on Climate Change and the Environment, liability for damages sustained in extreme weather events based on the polluter pays principle is an area of growing climate litigation. It cites the ongoing case Municipalities of Puerto Rico v. Exxon Mobil Corp, which makes “extensive arguments about the ‘compounded losses’ sustained by Puerto Rican communities as a result of Hurricane María in 2017 and Hurricane Fiona in 2022” to argue that fossil fuel companies are liable for losses incurred during these storms as well as ongoing economic impacts.
In May 2022, after a seven-year investigation into whether 47 of the world’s largest fossil fuel companies in the world had violated the human rights of Filipinos, the Philippines Commission on Human Rights found that climate change is a human rights issue and that the world’s largest fossil fuel companies knew about the impacts of climate change and attempted to obstruct efforts to address climate change.
A case filed in 2015 by a Peruvian farmer against RWE, one of Germany’s largest electricity producers which has used coal-burning power stations, alleges the power company is liable for climate damages in Peru caused by a melting glacier. The case appears to be nearing conclusion, though no verdict has been issued as of mid-2024.
Alongside this there are over 20 lawsuits from states and municipalities in the United States seeking damages for extreme weather events from large oil companies for allegedly concealing their own scientific knowledge about climate change and thus deceiving the public about the danger of global warming caused by their products.
There is momentum building in this area. In June 2024 California’s attorney general announced it was seeking damages from large oil companies under a new state law that allows the administration to claim profits earned by companies that violated unfair competition and false advertising laws.
And in the same month, the Supreme Court asked the US solicitor general for its opinion on whether a legal case from Hawaii suing the oil industry for deceptive advertising can be heard under federal or state law. In 2023 the Hawaii state supreme court ruled the case could go to trial under state law, but this was appealed by the oil industry, including companies such as ExxonMobil and Chevron. The final decision on where to try the case could lead to the other 20+ lawsuits going to trial.
There is a growing body of evidence that the fossil fuel industry knew decades ago that the burning of fossil fuels was a driver of climate change. Newly released documents indicate the oil industry funded climate change research as early as 1954. Shell’s scientists internally warned about the dangers of climate change in the 1980s, according to media reports.
Peer reviewed academic research has found that Exxon knew about climate change in the 1970s but continued to make public statements regarding climate science that were in direct contradiction to its own scientific data, which closely matched global warming forecasts of independent academic and government models. Other studies find that Total also knew about climate change in the 1970s but engaged in denial of climate science in the 1980s and 1990s.
Despite its early knowledge about climate change, the fossil fuel industry has used a range of strategies to oppose government-led efforts to reduce greenhouse gas emissions for decades. One of the most well known was to fund and promote the denial of climate change as an urgent threat that needs addressing.
Trade associations in particular have lobbied to undermine the conditions that would have enabled rival green technologies to flourish. In the United States and Europe new evidence shows oil and gas industry trade associations have lobbied since the 1960s to delay the uptake of solar and wind energy, and electric vehicles. In Asia the fossil fuel industry has pressured the Japanese government to prioritise fossil fuel technologies such as coal, LNG and ammonia co-firing. In the US the oil industry is suing the federal government for emission standards that seek to advance the adoption of clean technologies.
Research by the US Senate into the scale of this agenda culminated in a May 2024 hearing to discuss the oil and gas industry’s “Campaign of Climate Denial, Disinformation, and Doublespeak”. Based on internal documents from industry firms, the staff report found that:
The world’s preeminent authority on climate change science – the UN’s Intergovernmental Panel on Climate Change (IPCC) – has stated clearly that global greenhouse gas emissions need to peak before 2025 and be reduced by 43% by 2030. Fossil fuel companies are moving slowly or obstructing climate action. Government policies to reduce supply and demand of fossil fuels would be required to achieve this reduction.
The contribution of fossil fuels to global warming was finally recognised by all countries at COP28 where nations agreed to “Transitioning away from fossil fuels in energy systems, in a just, orderly and equitable manner, accelerating action in this critical decade, so as to achieve net zero by 2050 in keeping with the science”.
Action needs to be taken on fossil fuel supply to stay inside the 1.5°C carbon budget threshold. To achieve this, almost 40% of already developed reserves of oil, gas and coal needs to stay in the ground and new fields should not be opened. Looking ahead, the International Institute for Sustainable Development finds that by 2030 oil production needs to fall by 15% and gas production by 30% (compared to 2020 levels) to stay within the 1.5°C budget, based on the International Energy Agency’s (IEA) Net Zero Emissions by 2050 (NZE) scenario.
Some countries are already leading the way in this area. Colombia has stopped approving new exploration licences for oil, gas and coal since 2023. In Europe, France, Ireland, Spain and Denmark have banned the exploration and extraction of fossil fuels. These countries, alongside sub-national administrations such as the Canadian province of Quebec and the US state of Washington, have joined together to create the Beyond Oil & Gas Alliance, which advocates for more countries to follow their lead in reducing production towards a just, equitable and managed phase out. Another approach being championed by a number of national governments, cities and civil society leaders is the Fossil Fuel Non-Proliferation Treaty.
Alongside supply measures, demand for fossil fuels must be curtailed and replaced with other technologies. The IEA Net Zero Roadmap recommends achieving the following milestones:
Along these lines, governments have acted to reduce future demand by announcing they will phase out the sale of internal combustion engine vehicles and water heaters. According to the IEA 20 countries have announced they will ban the sale of internal combustion engine vehicles. There are also a growing number of EU countries that have committed to phase out the sale of fossil fuel powered water heaters.
Governments are deepening policies to reduce demand for fossil fuels, including by accelerating the use of solar and wind energy for electricity generation through subsidies, enabling access to land, and research and development to increase efficiencies and lower costs. This has been a factor in the tumbling costs of solar panels, wind turbines and batteries that have helped make solar and wind energy some of the cheapest options for new electricity generation. Together these have contributed to the increasing share of renewable energy in electricity generation in a number of countries. In 2023 global renewable capacity additions reached almost 510 GW, which is the fastest growth rate in the last two decades.
In the European Union ever more ambitious directives on the binding renewable energy target (currently at 42.5% by 2030) are contributing to the rising use of renewable energy. This has increasingly displaced fossil fuels for electricity generation, resulting in a 24% reduction in emissions from power plants across the bloc in 2023.
Advances in reducing the use of fossil fuels can be seen in the generation mix across a number of high-consumption countries. The Energy Institute tracked generation across 21 countries that collectively account for 80% of global consumption and found that of the ten most decarbonised electricity systems, 40% generate less than a third of their power from fossil fuels. In Brazil, that figure falls to less than 10%. Germany, the Netherlands and Spain generate roughly a third of electricity from solar and wind power.
China in particular has vastly accelerated its use of renewable energy, although the significant size of China’s energy use means that it still relies heavily on fossil fuels. Between 2014 and 2023 China’s solar capacity increased from 28 GW to close to 610 GW and wind energy from 96 GW to 4,441 GW. To give an idea of the scale of this shift, in 2023 China commissioned the same amount of solar PV as the rest of the world did in 2022. This meant that by 2023 China accounted for 14% of installed solar PV capacity globally.
In the area of transportation, policies such as subsidies in China and stricter auto emissions standards and tax credits in the US through the Inflation Reduction Act (which also apply to clean energy and buildings), promote the use of electric vehicles (EVs) to reduce oil demand. This has led to a jump in the number of EVs from around 300,000 in 2013 to just over 28 million in 2023. Globally, the sales of EVs displaced around 0.9 million barrels per day (Mb/d) of oil in 2023, when total oil demand grew by 2.1 Mb/d.
Looking ahead, another area of focus are the reforms needed to reduce the size of global fossil fuel subsidies, which amounted to over USD 1.5 trillion in 2022, according to the Organisation for Economic Cooperation and Development (OECD) and International Institute for Sustainable Development (IISD).
The impacts of climate change are set to worsen as global temperatures rise. Extreme weather events are likely to continue to get more frequent and more severe as a result. Climate science is clear that fossil fuels, and the emissions from the largest fossil fuel companies, are responsible for these changes. Only reducing the supply and use of fossil fuels can limit the rise in global temperatures and the extent to which these impacts worsen.
References
| ↑1 | Carbon Majors is the name applied to 122 large oil, gas, coal and cement firms whose production data has been tracked from the start of the industrial revolution in 1854. |
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| ↑2 | A negative externality is when one party incurs the costs of a negative effect resulting from actions taken by another. In the last 20 years, moves have been taken to impose the costs of externalities on the producer |
| ↑3 | The methodology conservatively estimates that producers are responsible for one third of damages caused by fossil fuels’ greenhouse gas emissions. |
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