For several decades, international climate negotiations and legal proceedings regarding climate liability have been hampered by a fundamental shortcoming: the lack of a quantitative framework for linking specific emissions to localized and monetized economic damages. While significant progress has been made in attributing anthropogenic forcing to national or corporate emitters, the translation of these emissions into quantified economic damages has, until now, been largely absent from the scientific literature.
It is precisely this gap that Burke et al. (2026)i address. In an article published in the journal Nature on March 25, the authors propose an integrated framework for calculating Loss and Damage (L&D), aligned with the Social Cost of Carbon (SC-CO₂) methodology, and apply this framework to individual, corporate, and national emitters.
A method for understanding the economic impact of CO₂
The method used by the researchers treats each ton of CO₂ emitted as a financial asset that generates a negative value stream—much like a landfill whose nuisances persist for decades if left untreated and impact the entire community, even though the vast majority of individuals have not disposed of anything there.
This method consists of four steps :
- We start with the emissions inventories of each country, company, or individual (Global Carbon Budget 2022 and Carbon Disclosure Project).
- A climate model (FaIR v.2) calculates the global temperature increase caused by these emissions.
- Regional models translate this global warming into local temperature changes, country by country.
- Finally, a robust statistical relationship, built on 60 years of historical data, links these temperature increases to losses in per capita GDP growth for each country.
This last point is important: the researchers show that heat does not only harm crops or health. It permanently slows GDP growth, particularly in South-South countries—and this effect persists for years.
Application of the Analytical Framework
The authors apply their analysis at different scales. For example, an annual round-trip long-haul flight (8,000 km) over ten years would generate approximately $25,000 in discounted future damages by 2100, compared to only $165 in historical damages—a ratio of about 150 to 1. Or, at the corporate level, Saudi Aramco’s emissions between 1988 and 2015 have caused approximately $3 trillion in cumulative global damages through 2020, while anticipated future damages are more than twenty times higher ($64 trillion by 2100).
Bilateral Allocation among Countries
U.S. emissions since 1990 represent the world’s leading source of cumulative damage ($10.2 trillion through 2020, discounted at 2%), followed by China ($8.7 trillion) and the European Union ($6.42 trillion). The authors also calculate bilateral damage flows on a country-by-country basis: U.S. emissions, for example, have inflicted approximately $500 billion in damage on India and $330 billion on Brazil.
We thus observe that while relative damages (as a proportion of GDP) are highest in low-income countries, absolute damages are greatest in the world’s major economies—which underscores the need to overlay an ethical and normative framework onto these purely quantitative estimates.
Carbon capture as a partial alternative
Furthermore, the authors examine the potential role of carbon capture and storage (CCS) technologies as a compensatory mechanism. Their analysis shows that the effectiveness of CCS declines rapidly with the time lag between GHG emissions and their capture: immediate removal eliminates future damages, but a 25-year delay reduces anticipated damages by only about 50% through 2100.
CCS alone cannot constitute a coherent remediation mechanism: even in the event of successful removal, the damage caused between the date of emission and the date of capture remains irreversible.
Limitations and sources of uncertainty
The authors identify three types of uncertainty:
- Sampling uncertainty (covered by 95% confidence intervals),
- Model specification uncertainty (choice of damage function, fitting assumptions),
- Policy uncertainty (discount, rate, time horizon, scope of emissions allocation).
They emphasize that the third type necessarily involves legal, ethical, and practical considerations that go beyond the scope of their analytical framework.
Scope of Damages
The study focuses on the macroeconomic impacts captured by GDP. Many dimensions of climate damage are therefore not captured by this measure: health, biodiversity, cultural heritage, sea-level rise, tropical cyclones, etc. The estimates presented thus systematically underestimate the total damage, which further strengthens their conclusions.
Key Takeaways
The article by Burke et al. (2026) represents an important contribution to the economics of climate change and international climate law. By providing a rigorous and empirically grounded framework for monitoring loss and damage attributable to specific emitters, it paves the way for multilateral negotiations more firmly grounded in facts and for litigation with stronger evidentiary support.
Two conclusions emerge: first, current carbon debt is insignificant compared to future carbon debt by 2100, and commitments to compensate for historical damage account for only a tiny fraction of the total liabilities associated with past emissions. Second, the social cost of carbon appears to be considerably higher than current institutional estimates, which argues for a significant strengthening of carbon pricing policies.
These estimates do not prejudge what is legally owed between entities—that is a moral and legal question. They do, however, provide the factual basis essential to any informed debate on climate responsibility.
i Burke, M., Zahid, M., Diffenbaugh, N.S. et al. Quantifying climate loss and damage consistent with a social cost of carbon. Nature 651, 959–966 (2026). https://doi.org/10.1038/s41586-026-10272-6
Author of the article
Jean-François Léonard
Vice-President, Public and Government Affairs