America’s wealthiest people are also among the world’s worst pollutants, not just because of their large houses and private aircraft, but also because of the fossil fuels produced by the corporations in which they invest.
A new study published Thursday in the journal PLOS Climate found the wealthiest 10% of Americans are responsible for almost half of planet-heating pollution in the US, and called on governments to shift away from “regressive” taxes on the carbon-intensity of what people buy and focus on taxing climate-polluting investments instead.
“Global warming can be this huge, overwhelming, nebulous thing happening in the world and you feel like you’ve got no agency over it. You kind of know that you’re contributing to it in some way, but it’s really not clear or quantifiable,” said Jared Starr, a sustainability scientist at the University of Massachusetts Amherst and a report author.
To accomplish this, the researchers examined massive datasets spanning 30 years in order to link financial transactions to carbon pollution.
They looked at the pollution caused by firms’ direct activities as well as those caused by companies’ climate impacts farther down the supply chain – for example, the majority of an oil company’s emissions are caused by the oil it obtains being burned by its customers.
This resulted in a carbon footprint for every dollar of economic activity in the United States, which the researchers linked to homes using demographic survey data showing the industries people work in and their income from wages and investments.
They discovered that the wealthiest 10% of Americans, households earning more than $178,000, were responsible for 40% of the country’s human-caused, planet-warming pollution. The top 1%’s income – households earning more than $550,000 – has been connected to 15% to 17% of this pollution.
In addition, the investigation revealed “super-emitters.” They are nearly entirely among the richest 0.1% of Americans, concentrated in businesses such as finance, insurance, and mining, and emit approximately 3,000 tons of carbon pollution every year. To put that in context, it is predicted that people should restrict their carbon footprint to roughly 2.3 tons per year in order to combat climate change.
“Fifteen days of income for a top 0.1% household generates as much carbon pollution as a lifetime of income for a household in the bottom 10%,” Starr said.
Climate impact is determined not only by the magnitude of people’s money, but also by the industries that generate it. According to the research, a household earning $980,000 from specific fossil fuel businesses, for example, would be classified as a super-emitter. A household earning a living in the healthcare industry, on the other hand, would need to earn $11 million to produce the same amount of planet-warming pollution.
The report’s authors call on policymakers to rethink how they use taxes to tackle the climate crisis.
Carbon taxes based on what people buy – the food we eat, the cars we drive, and the clothes we wear – “disproportionately punish the poor while having little impact on the extremely wealthy,” according to Starr. They also overlook the portion of wealth that wealthy people invest rather than consume.
Governments should instead focus on shareholder taxes and carbon-intensive investments, according to the research. Although it will be “a difficult political ask,” Starr admits, especially given the wealthiest people’s enormous political power.
Many carbon-taxation concepts have circulated around the world, including windfall taxes on fossil fuel firms and wealth taxes, but few have proven politically viable.
The study, according to Kimberly Nicholas, associate professor of sustainability science at Lund University in Sweden, who was not involved in the investigation, helps highlight how closely money, particularly from investments, is linked to global warming pollution.
People sometimes bring up population control while discussing strategies to address the climate catastrophe, according to Mark Paul, a political economist at Rutgers University who was not engaged in the study. However, he told HowAfrica that research like this “shed light on the outsized responsibility that the rich have in generating and perpetuating the climate crisis.”
Identifying the primary culprits driving the climate catastrophe is critical for governments to implement policies to reduce global warming emissions in a fair and equitable manner, he noted. Although he disagreed with the study’s claim that carbon prices disproportionately impact the poor, he said there were ways to apply them fairly.
The rich’s disproportionate climate impact is, of course, a global issue.
According to a research released last year by the NGO Oxfam, billionaires emit a million times more global warming pollution than the average individual outside the world’s wealthiest 10%.
“At the moment, the way the economy works is that it takes money and turns it into climate pollution, which is destabilizing life on Earth,” Nicholas explained. “And that fundamentally has to change.”