New York City's Claim on 5 Big Oil: The Dates That Make the Difference to the Dollars
An estimated $19 billion will be needed to fund the infrastructure to protect New York City from storm surges such as 2012’s Super Storm Sandy, that are bound to come again and come more frequently. Mayor de Blasio’s primary claim against 5 Big Oil (BP, ExxonMobil, Chevron, ConocoPhillips, and Royal Dutch Shell) implies – correctly – that 11% of extreme weather-related losses to the City are attributable to the climate changing emissions of their oil and gas products. If successful, such a claim might result in between $1.4 billion and $6.2 billion in damages – crucially dependent on the date upon which the associated historical losses are deemed to have started.
Did the losses begin in the period around 1880, when the oil industry began? Standard Oil began in 1870, BP and Shell in 1905. Or was it in 1910, when Model T Ford automobiles outnumbered horse-and-carriages on the streets of New York City? Or perhaps was it in 1950 that heralded the post-WW2 ‘great acceleration’ in global growth and emissions?
Or could it be in 1977 when it is alleged Exxon management was informed by its scientists that there was an “overwhelming” consensus that fossil fuels were responsible for atmospheric carbon dioxide increases? As shown in Table 1, taking 1880 as the start date gives a claimable figure to 2018 of $6.2 billion, whereas starting from 1977 halves this to $3.1 billion.
|Date when losses are deemed to have started||Losses to New York City attributable to the emissions from the 5 Big Oil companies’ gas and oil products – $billion (2015) – date to 2018|
|1880 (Big Oil industry begins)||6.278|
|1896 (Arrhenius publishes)||6.269|
|1910 (Model T prevails in New York City)||6.232|
|1950 (post-WW2 ‘great acceleration’)||5.958|
|1977 (alleged that Exxon management informed)||3.132|
|1988 (IPCC established)||2.032|
|1997 (Kyoto Protocol)||1.438|
Table 1. Climate-related losses to New York City attributable to the emissions from the 5 Big Oil companies’ gas and oil products depend crucially on when the losses are deemed to have started (based on carbon pricing from 1750, the start of the Industrial Revolution). Copyright Predict Ability Ltd, 2018.
Mayor de Blasio’s secondary claim is that not only did the 5 Big Oil companies cause some of the climate change losses, but that they knew that they were doing so. If they knew, when did they know? Was it in 1896, when the Nobel Prize winning physical chemist Svante Arrhenius, the so-called ‘father of climate change science’, published his paper ‘On the influence of carbonic acid [carbon dioxide] in the air upon the temperature on the ground’? That is certainly arguable.
Beyond argument, however, is that the world could any longer plead ignorance of the link between global warming and greenhouse gas emissions following the formation of the UN sponsored IPCC (Intergovernmental Panel on Climate Change) in 1988. The resulting Kyoto Protocol in 1997 set internationally binding emissions reduction targets. Suppose 1997 is taken as the date from which the causal effect was deemed known. If this is used as the start date for calculating the cost of the losses to New York City from the emissions of 5 Big Oil’s gas and oil products, then the potential claim drops from $6.2 billion to $1.4 billion.
But that is not the end of the story. Carbon dioxide emissions from burning fossil fuels accumulate in the atmosphere, where they remain for hundreds of years. This buildup continues to cause some of the extreme weather-related losses to New York City. As shown in Fig. 1, 5 Big Oil’s proportion of these future losses to the City amounts to a potential claim of some $75 million per year from 2018 onwards.
Fig. 1 New York City climate-related losses attributable to CO2 emissions from the 5 Big Oil companies’ gas and oil products, is down from its 1973 ‘oil crisis’ peak. Copyright Predict Ability Ltd, 2018.
Will $1.4 billion – or even $6.2 billion – be enough to build sea defenses capable of keeping out storm surges like that of Super Storm Sandy? Probably not, if the cost of London’s $2.2 billion (2018 prices) River Thames Barrier against North Sea storm surges is anything to go by – but either way, the potentially claimable ongoing $75 million per year from 2018 could certainly help.
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