Is It True That '100 Companies are Responsible for 71% of Carbon Emissions'?

It's one of the most common phrases in discussions about climate change: "Just 100 companies responsible for 71% of global emissions." That's how the headline of the Guardian put it in its coverage of the Carbon Majors Report of 2017, which focused on specific industrial sources. Everybody uses a version of it, especially in discussions about personal responsibility; I found four of them just working on one post. After all, if over 70% of emissions come from these companies, what difference can individual actions make?

It's likely that most people quote the Guardian rather than the actual report, given that article's author, Tess Riley, wrote: "ExxonMobil, Shell, BP and Chevron are identified as among the highest emitting investor-owned companies since 1988." The report itself has a very different emphasis.

The first point is that if you look at the actual list in the report, Exxon and Shell are the only private companies to even make it into the top ten; the rest are all government entities. China (Coal) is by far the biggest emitter of them all at 14.32%; fully 18.1% is just Chinese, Russian and Indian coal, so it's incorrect for anyone to say "just 100 companies." We are dealing with national governments and the entities that they own.

The Scope Matters

But the more important point that the Guardian article ignored is that it is broken down into Scope 1 and Scope 3 emissions. From the report:

Scope 1 emissions arise from the self-consumption of fuel, flaring, and venting or fugitive releases of methane.

Scope 3 emissions account for 90% of total company emissions and result from the downstream combustion of coal, oil, and gas for energy purposes. A small fraction of fossil fuel production is used in non-energy applications which sequester carbon. [like plastics]

In other words, for gasoline, Scope 1 is the entity extracting and refining the gas and shipping it to the pumps, and Scope 3 is us buying the gas, putting it in our cars, and turning it into CO₂.

Of that 70.6% of emissions attributed to these hundred entities, over 90% is actually emitted by us. It's going into heating our houses and moving our cars and making the steel and aluminum for our buildings and cars and F35 fighters and concrete for our roads and bridges and parking garages. Those entities may all by happy and rich because we are doing this and no doubt are encouraging it, but who is ultimately responsible for the consumption of what they are producing?

What Are These Companies Selling Anyway?

The economist and physicist Robert Ayers wrote:

The essential truth missing from economic education today is that energy is the stuff of the universe, that all matter is also a form of energy, and that the economic system is essentially a system for extracting, processing and transforming energy as resources into energy embodied in products and services. 

We don't buy energy, we buy what it does and what it makes. Our economies depend on us buying stuff and services, so our governments and corporations ensure that we keep buying more because our jobs all depend on it. There is a reason that the American government promotes gas-guzzling SUVs and pickup trucks; they have more metal and use more gas which moves more dollars, they transform more energy into more product.

But we can make our own choices about what kind of energy we use, and what kind of stuff, and how much stuff.

It's Consumption That Drives Markets, Not Production

If you look again at the list of 100 entities, it includes American companies like Murray Coal (now bankrupt) and Peabody Energy (circling the drain) – done in because there is no market for their product. According to an analyst quoted in NS Energy Business,

The industry continues to be battered by rapid structural decline driven by low gas prices, the low and falling cost of building wind and solar power generation and sweeping initiatives by utilities and corporations to cut emissions.

In other words, if we don't buy what they are selling, they go out of business. If we stop consuming, then they stop producing. Exxon-Mobil was just kicked from the S&P 500 because, as energy analyst Pavel Molchanov notes in the Washington Post, "Oil has shrunk as part of every economy, not only the U.S. This is a global trend.”...."stocks reflect expectations for the future."

So Stop With The 100 Companies Responsible for 71% of Global Emissions Already

They are not, they are responsible for 6.5% of Scope 1 global emissions. We are responsible for the rest of that 71%, with the choices we make, the things that we buy, the politicians we elect. We are buying what they are selling and we don't have to.

And that is why personal consumption choices and individual actions matter. I really liked the first comment to the Guardian article by Onebcgirl:

"Humanity needs to stop looking for someone to blame for the environmental destruction of the planet and look in the mirror. These companies would not be producing the products that destroy our planet and change our climate if humans did not purchase them. Stop driving so much people. Stop consuming so much, no you don't need fifty hair products, or ten dresses, or every goddamn material object in existence. This is what drives climate change, our need to consume and the big one, make our lives 'easier.'"