While many people may want to make a difference when it comes to climate change, new research indicates that the power for meaningful change is really in the hands of the ultra-rich.
Take this figure for example: the top 10% highest income-earning households in the U.S. were responsible for 40% of greenhouse gas emissions in 2019 alone, revealed a study published Thursday in the PLOS CLIMATE journal.
Greenhouse gas emissions trap heat in the atmosphere, according to the U.S. Environmental Protection Agency. These emissions lead to global warming and climate change, per the United Nations.
“Human-induced global warming has already caused multiple observed changes in the climate system,” according to the Intergovernmental Panel on Climate Change. “Changes include increases in both land and ocean temperatures, as well as more frequent heatwaves in most land regions.”
In 2015, a majority of the world’s countries adopted the Paris Agreement. Its central aim included limiting global temperature rise to 1.5 Celsius (just under 35 degrees Fahrenheit). An IPCC report outlines the risks the globe faces if temperatures do rise that much, including heatwaves and droughts.
Though high-income earners appear to contribute most to climate change, those most affected by it include people in poverty, children, pregnant women, the elderly, Indigenous populations and people with chronic health conditions. In the U.S., the poorest 50% of the population captured just 15% of pre-tax national income while the top 10% captured about 41%.
According to the recent study, “current policies to reduce greenhouse gas (GHG) emissions and increase adaptation and mitigation funding are insufficient to limit global temperature rise to 1.5 Celsius,” and “it is clear that further action is needed to avoid the worst impacts of climate change and achieve a just climate future.”
Researchers found that, not only were the top 10% of highest earning households linked with 40% of emissions, but that the top 1% were linked to 15% to 17% of national emissions. These findings were based on an analysis of data spanning from 1990 to 2019.
“Our study is limited in scope, makes certain assumptions about unearned income that are important for top 1% households, and relies on survey and emissions databases that can introduce errors,” the study authors noted. “First, this study focuses on linking emissions with income. Household wealth is only considered insofar as it generates realized income as capital gains or dividends. Because wealth is even more unequally distributed than income, a wealth-based emissions analysis would very likely show greater emissions inequality than our results.”
Researchers also found that this disparity between high income households and the rest of the nation when it comes to emissions is growing.
“Across all accounting methods, those at the very top of the income distribution are responsible for striking absolute t CO2e and disproportionate shares of national emissions,” said the study. “Disparities between these top income groups and the rest of society have also been growing over time.”
However, households at the same income level can have very different emissions levels, it said.
“For example, in the producer framework a household earning $980,000 from the petroleum refining industry would be a super emitter… while the same amount of emissions would require $11 million in income from the hospital industry,” researchers explained. “In the supplier framework, becoming a super emitting household would take at least $18 million in hospital income, but only $2.7 million in income from the coal industry.”
An interesting contributing factor appears to be the fact that higher-income households get more of their money from unearned income such as investments. Per the study, the highest earning 1% of households’ investment holdings accounted for 38% to 43% of their emissions.
This could occur when a high-income earner’s wages are from a low emissions sector such as education but their investments include a portfolio with high emissions businesses such as fossil fuel companies.
“Even when allowing for a considerable range of investment strategies, passive income accruing to this group is a major factor shaping the U.S. emissions distribution,” said the study. To remedy high emissions output from this economic group, the researchers suggested implementing taxes targeting high-income groups and investments.
They said this type of tax could do two things to help mitigate climate change. First, it would provide revenue to invest in climate change mitigation projects. Second, it would provide incentive for investors to shift their priorities to low-emissions investment options.
“Because unearned investment income and asset ownership are heavily concentrated at the top of the income distribution, limiting a carbon tax to either of these items could further focus it on those reaping the most economic benefit from GHG emissions, increase public support, and reduce GHG-intensive economic activity in a more direct way,” said the study.
However, the authors also noted that “of course, any such proposals would likely face significant pushback from the economically advantaged households who dominate policymaking.”
Related
Related
