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Ultra-wealthy people zooming across the world on their private jets, lounging on yachts and conspicuous by their Instagrammable consumption are among the most easily identified individual culprits when it comes to the climate crisis – but new research argues that it is not just their heady lifestyles to blame, but also their bank accounts.
Through their ownership of companies and private financial and physical assets, from oil producers to property developments, the super-rich are responsible for an outsized slice of the greenhouse gases that are overheating the planet. The top 1% of people by wealth, through their shareholdings and investments, control about a quarter of global annual emissions in total.
Greenpeace has calculated the “climate debt” of these high net worth individuals, by attributing to them 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.
Clara Thompson, the global lead campaigner on socioeconomic systems at Greenpeace International, said: “At a time when people are facing rising energy bills, rising living costs, and growing climate impacts, many are asking why ordinary households should shoulder so much of the burden, while some of the world’s wealthiest people continue to profit from the industries driving the crisis.”
Greenpeace estimates that the top 1% by wealth are responsible for about 40% of all “ownership”-based emissions – that is, the emissions produced by businesses and associated with privately owned financial and physical assets – which themselves make up 60% of global carbon output. Within that group, the top 0.1% account for about 17% of ownership-based emissions, and the top 0.01% about 9%. The top 1% is made up of people with wealth above about $2m, the top 0.1% people with wealth above about $7m, and the top 0.01% is people with wealth above about $38m.
By contrast, the bottom half of the world by wealth accounts for just 3% of ownership-based emissions.
Thompson said it was important to think in terms of ownership-based emissions because, although less visible than emissions associated with consumption, they were harder to address. “This isn’t only a story about private jets and lavish lifestyles. When it comes to the pollution of the ultra-wealthy, ownership matters even more than consumption. A large share of emissions is associated with the ownership of carbon-intensive assets and investments,” she said. “For years, climate policy has focused on consumers. But our findings suggest we should be paying much more attention to what [people] own and invest in.”
One way to address the imbalance could be through wealth taxes. “Climate debt is about responsibility,” said Thompson. “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, separate data showed, 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. Last week, the economist Thomas Piketty led a report showing that 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.
Governments from around the world, excluding the US, have gathered in Bonn, Germany, for a fortnight of talks in advance of the Cop31 UN climate summit in November. One of the items likely to receive most attention will be arrangements for a “just transition” to help workers affected by the transition away from fossil fuels to participate in the low-carbon economy.
