“Without policies such as regulations or taxes on very polluting investments, it’s unlikely that wealthy individuals making a lot of money from fossil fuel investments will stop investing in them,” says one economist.
The richest tenth of U.S. households are responsible for 40% of all the nation’s greenhouse gas emissions, a study published Thursday revealed, underscoring what progressives say is the need for regulations and taxes on carbon-intensive investments.
Published in PLOS Climate, the study—which was led by University of Massachusetts, Amherst sustainability scientist Jared Starr—analyzed 30 years of U.S. household income data and the greenhouse gas emissions generated in creating that income.
“We find significant and growing emissions inequality that cuts across economic and racial lines,” the paper notes. “In 2019, fully 40% of total U.S. emissions were associated with income flows to the highest earning 10% of households.”
“Among the highest-earning 1% of households (whose income is linked to 15-17% of national emissions), investment holdings account for 38-43% of their emissions,” the publication continues. “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.”
“It just seems morally and politically problematic to have one group of people reaping so much benefit from emissions while the poorer groups in society are asked to disproportionately deal with the harms of those emissions.”
The study’s findings are consistent with research published in 2021 by the Institute for European Environmental Policy and the Stockholm Environment Institute that estimated the wealthiest 1% of humanity was on track to produce 16% of all global CO2 emissions by 2030. Additionally, a 2022 Oxfam report found that a single billionaire produces a million times more carbon emissions than the average person.
Starr toldThe Washington Post that “as you move up the income ladder, an increasing share of emissions is associated with investments.”
According to the Post:
Then there were “super-emitters” with extremely high overall greenhouse gas emissions, corresponding to about the top 0.1% of households. About 15 days of emissions from a super-emitter was equal to a lifetime of emissions for someone in the poorest 10% in America.
The team found that the highest emissions linked to income came from white, non-Hispanic homes, and the lowest came from Black households. Emissions peaked until age 45 to 54, and then declined.
“It just seems morally and politically problematic to have one group of people reaping so much benefit from emissions while the poorer groups in society are asked to disproportionately deal with the harms of those emissions,” said Starr.
The study asserts that “results suggest an alternative income or shareholder-based carbon tax, focused on investments, may have equity advantages over traditional consumer-facing cap-and-trade or carbon tax options and be a useful policy tool to encourage decarbonization while raising revenue for climate finance.”
Lucas Chancel, a French economist who was not part of the study, told the Post that “all Americans contribute to climate change, but clearly not in the same way.”
“Without policies such as regulations or taxes on very polluting investments,” he stressed, “it’s unlikely that wealthy individuals making a lot of money from fossil fuel investments will stop investing in them.”
This article is about the rich having high climate impacting investments in addition to high climate impacting lifestyles.