This article in Cleaner Production Letters studies the implications of a continued growth in the number of millionaires for emissions, and its impact on the depletion of the remaining carbon budget to limit global warming to 1.5 °C (about 400 Gt CO2). Much evidence suggests that the wealthiest individuals contribute disproportionally to climate change.
Findings suggest that the share of US$2020-millionaires in the world population will grow from 0.7% today to 3.3% in 2050, and cause accumulated emissions of 286 Gt CO2. This is equivalent to 72% of the remaining carbon budget, and significantly reduces the chance of stabilizing climate change at 1.5 °C.
Continued growth in emissions at the top makes a low-carbon transition less likely, as the acceleration of energy consumption by the wealthiest is likely beyond the system’s capacity to decarbonize. To this end, we question whether policy designs such as progressive taxes targeting the high emitters will be sufficient.
Arguments in favor of continued and unrestricted growth in energy use of the very wealthy thus have to be considered in light of distributional issues and technical scalability.
For instance, 1% of the world’s population is responsible for an estimated 50% of emissions from commercial air transport, most of this associated with premium class air travel of affluent frequent fliers.
A central question will be whether it is feasible to produce the sustainable aviation fuels required by this small share of humanity, equivalent to about 150 Mt fuel per year (in 2019), or whether the energy hunger at the top means that command-and-control policies are required to ban energy-intense premium class and private flights.
There is now a considerable body of literature on the unequal distribution of emissions between individuals. This literature has
i) confirmed a relationship between wealth and emissions;
ii) highlighted differences in individual direct per capita emissions, with a potential range of five orders of magnitude (<0.1 t CO2 per year in Central Africa to >10,000 t CO2 per year for very wealthy individuals);
iii) singled out the importance of yacht ownership and air travel in generating very high per capita emissions;
iv) shown that the consumption at the top is responsible for a large share of overall emissions; and
v) determined that growth in overall emissions is driven from the top.
Findings raise the issue of global policy choices, with this research confirming that targeting the high emitters will be key.
Staying within temperature limits of 1.5 °C or 2.0 °C is difficult without addressing the consequences of wealth growth. While a dollar spent by low-income takers is associated with greater emissions than one spent by the wealthy, the concentration of wealth at the top means that a significant share of the remaining carbon budget to 1.5 °C is depleted by a very small share of humanity. This comparably small group is also likely to invest its wealth in ways that further increase emissions.
Policies limiting the high emitters are thus unavoidable, such as progressive taxes on emissions, but they are hampered by three consecutive barriers.
The first barrier is the very realization among policy makers that the wealthy have to be limited in their energy use and guided in their investment decisions. In most countries, wealth accumulation continues to be seen as desirable and beneficial for overall economic growth.
The second barrier is represented by increasingly polarized political environments, in which mitigation policies may not be proposed, let alone be implemented. In many countries that have earlier presented themselves as climate change champions, a reversal of earlier policies is ongoing (e.g. Sweden), and even where climate governance has made progress, it is not clear whether this legislation will be lasting (e.g. USA).
A third barrier are policy designs that reliably reduce emissions at the top. Discussions of the wealthiest as contributing to particularly high emissions have featured prominently in the global media, but there is less evidence of politicians taking up the issue in systematic ways, and going beyond market-based measures such as comparably small increases in carbon taxes. Addressing the very wealthy will consequently be a complex undertaking.