- The World Inequality Report showed that the most carbon-emitting people in the world are those who are the wealthiest.
- Not real estate, but financial assets make up a larger part of their wealth.
- The report recommended that those individuals pay more to address the climate crisis.
Wealth inequality appears across the global economy — and the climate crisis and stock market play significant roles.
The Wealth Inequality Lab published their 2022 reportTuesday’s session examined global wealth distribution. It found that wealth was directly linked to climate crisis. Those who have the most financial assets are also those contributing the most to carbon emission across the globe.
According to the report, cash or bank deposits is the main form of wealth that low-income people own. The middle class usually has real estate and bank deposits. Wealthier people have 40-60%. The report pointed out that financial assets like bonds and stocks can account for 90-95% to all wealth in countries such as France or the US.
These people also contribute the most carbon emissions. The report states that the top 10% of earners emit 47.6% of total carbon emissions, while those in the bottom 50% emit only 12%. The carbon tax is one reason for this disparity. While the tax has been successful in some countries, it is not effective in others like France.
The report stated that “large inequalities in emission suggest that climate policies should focus more on wealthy polluters.” “Climate policies like carbon taxes have so far often disproportionately affected low and middle income groups while leaving the consumption habits of the wealthiest unchanged.”
The standard way to think about carbon taxes is that everyone should pay the same tax, regardless of their wealth. However, the report stated that this gives the wealthy more power over polluting, and that a progressive carbon tax is needed: a tax that increases as individuals emit more or become wealthier.
In other words, those who have the most assets should pay more for their part in polluting our climate.
Moreover, some Democratic lawmakers believe that the wealthy should pay their fair share in all taxes. Progressive Senators Bernie Sanders and Elizabeth Warren have championed the idea that there should be a wealth taxIt would impose a 2 percent tax on household net wealth between $50 million-$1 billion and a 33% tax for household net worth above $1 billion.
—Bernie Sanders (@BernieSanders) February 18, 2021
The US currently does not have a federal carbon-tax, but Democratic lawmakers recently made it possible. proposedImports from other countries will be subject to a tax that does not reduce carbon emissions. President Joe Biden has also a plan to reduce carbon emissions by half by 2030. He plans to do this through a tax on imports from other countries that do not reduce carbon emissions. $550 billion investmentIn his Build Back Better framework, which is currently being negotiated in Senate.
Should the US — and the world — succeed in dramatically reducing carbon pollution, wealth inequality could likely be lessened as a result.