The super-rich's assets are causing a disproportionate amount of climate harm, according to a study. This is not just due to their lavish lifestyles, but also their bank accounts and ownership of companies and private financial and physical assets. The top 1% of people by wealth, through their shareholdings and investments, control about a quarter of global annual emissions. Greenpeace has calculated the "climate debt" of these high net worth individuals, attributing their share of the damage done to the climate by the assets they own. By this reckoning, the world's richest cause nearly $1tn a year of damage to the climate.
This raises a deeper question: why should ordinary households shoulder so much of the burden while some of the world's wealthiest people continue to profit from the industries driving the crisis? The top 1% by wealth are responsible for about 40% of all "ownership"-based emissions, which make up 60% of global carbon output. The top 0.1% account for about 17% of ownership-based emissions, and the top 0.01% about 9%. The bottom half of the world by wealth accounts for just 3% of ownership-based emissions.
One way to address this imbalance could be through wealth taxes. Climate debt is about responsibility, and if we agree that those who contributed most to the problem should contribute more to fixing it, it's reasonable to ask whether that principle should apply to extreme wealth as well. Big banks and other financial investors poured $900bn into fossil fuels last year, despite promises made by many five years ago to curb such investments.
The glaring inequalities between the impact on the planet of the super-rich and those of ordinary people are increasingly coming under the spotlight, as wealth inequality soars around the world. The world could live equitably within the planet's finite resources if excesses of wealth were curbed by taxes and the poor allowed to keep a bigger share of what their labour produces. This is a complex issue that requires a multifaceted approach, including wealth taxes, a focus on ownership-based emissions, and a "just transition" to help workers affected by the transition away from fossil fuels to participate in the low-carbon economy.
