Fossil Fuel Companies Make Billions in Profit as We Suffer Billions in Losses: 2024 Edition

by nuclearafrica

Above: Lahaina, Hawai’i after the devastating August 2023 wildfire that killed more than 100 people and destroyed 2,700 homes.

Last year, I wrote that fossil fuel companies made billions of dollars in profit during 2022 as people around the world suffered billions of dollars in damage from climate and weather related disasters. The climate impacts people around the world experience are connected to the fossil fuel industry’s record-breaking profits:

“The profits made by the oil and gas majors come at the direct expense of all of us and our shared planet. These companies continue to extract more fossil fuels from the ground, lobby for their interests, deceive and misinform the public about climate change, and build new infrastructure to lock us into this continual cycle of extraction, combustion, and the dire consequences it brings. They need to be held accountable for these actions.”

Now that all the numbers are in for 2023, we can say that, tragically, this trend continues. Last year was one of extremes, yet again breaking the record for hottest year with an annual temperature 1.48°C above the preindustrial average. Records were smashed in terms of extreme air and ocean temperatures; people around the world experienced wildfires, floods, severe storms, and other disasters. While fossil fuel industry profits were down from their 2022 earnings, these companies still pulled in a dizzying amount of money in 2023, with the combined profits of ExxonMobil, Chevron, Shell, and BP totaling over $100 billion. The CEO of Chevron bragged about the company’s record profits and fossil fuel production levels, saying: “In 2023, we returned more cash to shareholders and produced more oil and natural gas than any year in the company’s history.” The comment shows an atrocious disregard for the fossil fuel industry’s harmful impacts on the world and for global efforts to confront climate change and prioritize human rights.

US disasters and disaster response

In 2023, the United States suffered 28 separate weather- and climate-related disasters, the highest number of such events recorded in a single year that each caused over $1 billion in economic damages. Taken together, these disasters caused $92.9 billion in damage. This monetary damage is just a crude measure that doesn’t fully account for the loss of life, cultural heritage destroyed, trauma endured, and other types of damage that cannot be described in economic terms. These calamities tragically caused the deaths of 492 people. That figure doesn’t capture the full extent of the trauma experienced by survivors of these disasters, many of whom face myriad difficulties in recovering emotionally, physically, and financially long after the time when the news cycle has shifted away from the aftermath of catastrophe. 

One of these billion-dollar disasters was the wildfire that devastated Lahaina, Hawai’i. That fire alone killed more than 100 people, destroyed important cultural heritage sites and 2,700 homes, and severely impacted local ecology. The fire also left toxic ash in its wake, the disposal of which has proven problematic. While the role of climate change hasn’t been quantified for this fire, we know that climate change is making wildfires more frequent and severe. The history of colonization that still shapes the land to this day also played a role. While the media had only limited coverage of the role of fossil fuels in creating the conditions for such an unusual fire, Maui County is suing fossil fuel producers for deceiving the public about climate change harms they knew their products would cause. The lawsuit notes, for example, that wildfire season is no longer a season, but rather a year-round struggle. Unfortunately, as things currently stand, the fossil fuel companies likely won’t have to pay for any of the recovery efforts from the devastation in Lahaina.

In the United States, recovery efforts after disasters are paid for in part by funds from the Federal Emergency Management Agency (FEMA). But with a growing number of disasters and the rising cost of recovery, FEMA does not have enough money to meet the growing need. Vastly underfunded, FEMA has relied on Congress for emergency supplemental funding in recent years to shrink its multi-billion dollar deficit. As my colleague Shana Udvardy wrote, this funding deficit means FEMA has to preserve limited funds for immediate life-saving needs while stalling projects to help with recovery from disasters that happened in previous years. Such deferrals in Congressional appropriations for disaster recovery most severely impact underserved people, including people who are unhoused, displaced, and historically disadvantaged.

Disasters and disaster response around the world

Major climate and weather disasters occurred across the world last year, including the record-breaking cyclone Freddy which devastated parts of Mozambique and Malawi, catastrophic flooding in Libya, severe floods and drought in Kenya, and many more. Thousands of people were impacted by these events and face a long road to recovery.

Global efforts to assist in this recovery are desperately needed and movement is starting to happen. At COP28, the long-awaited loss and damage fund was operationalized. The purpose of this fund is to provide compensation to those impacted by disasters. While operationalizing the fund is a positive step, the funds pledged so far by nations are severely lacking, with a paltry $400 million in the fund so far. This is a drop in the bucket compared to what is needed as climate change continues to make the world less safe. The United States has pledged $17.5 million—an embarrassingly low sum from the world’s largest historic emitter and the nation where many of the world’s largest fossil fuel companies are headquartered.

Climate Analytics presented a new analysis putting the need for pledges to the loss and damage fund alongside profits of the world’s largest oil and gas producers. Their research shows that, in just over three decades (1985-2018), fossil fuel producers made $30 trillion in profit while a partial accounting of damages linked to their products was $20 trillion. This implies that they could have paid for all the climate damage associated with their products—and still walked away with $10 trillion in profit.

It is clear that people around the world are suffering from the harms of fossil fuels, and it is clear that these companies have the money to compensate for economic damages. The question remains, does the political will exist to bridge these issues?

Profiting off climate damage and conflict

While disaster recovery efforts around the world struggle to keep up with community needs, the fossil fuel industry has money to spare, paying out record amounts to shareholders and conducting stock buybacks. This is occurring simultaneously with rollbacks to their climate pledges as we see them again taking the path they have chosen too many times before to prioritize profit over the planet.

The fossil fuel industry’s high profits come primarily from the world’s continued addiction to its products, which the companies themselves lobby to maintain. But the profits are also buoyed by global conflict. An analysis from Global Witness recently found that, since Russia’s invasion of Ukraine, the five largest fossil fuel companies in the United States and Europe have raked in a quarter of a trillion dollars as the conflict drove up energy prices.

While fossil fuel companies profit, people suffer.

It’s time to change course

In 2023, heat-trapping emissions from fossil fuels increased by 1.1%. This may sound like a small amount. But, in a world where we have known for decades that these emissions need to decline and that we are far off track from meeting emissions reduction goals, any increase represents a threat to life on this planet. Increases in the fossil fuel production that drives climate change will continue to wreak havoc. Such increases will allow fossil fuel companies to continue making jaw-dropping profits while efforts to fund disaster response—such as FEMA in the United States and the loss and damage fund globally—continue to lag far behind what is needed.

The fossil fuel companies have shown time and time again that they cannot be trusted to do the right thing. They have continued to prove this as they walk back their previous climate pledges even as the impacts of record-breaking heat are causing unimaginable damage around the world. This is why we must keep up public pressure toward a fast, fair phaseout of fossil fuels, consider the role of banking in propping up this system, shine a light on the industry’s decades of disinformation and denial, and continue to call for accountability via the courts. Action is needed to ensure that these companies are not allowed to continue to line the pockets of shareholders while people suffer from the devastating impacts their products have caused.

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