The richest 10% produce about half of greenhouse gas emissions. They should pay to fix the climate | Lucas Chancel

LLet’s face it: our chances of staying below a 2C global temperature rise don’t look good. If we keep working as usual, the world is on track to warm up by at least 3°C ​​by the end of this century. At current global emission rates, the carbon budget we have left if we are to stay below 1.5°C will be exhausted in six years. The paradox is that, globally, popular support for climate action has never been stronger. According to a recent United Nations poll, the vast majority of people around the world view climate change as a global emergency. So what have we gotten wrong so far?

There is a fundamental problem with the contemporary climate policy debate: it rarely recognizes inequality. The poorest households, which emit little CO2, rightly anticipate that climate policies will limit their purchasing power. In return, policymakers fear a political backlash if they demand faster climate action. The problem with this vicious cycle is that it wasted a lot of time. The good news is that we can end it.

Let’s look at the facts first: 10% of the world’s population is responsible for about half of all greenhouse gas emissions, while the bottom half of the world contributes only 12% of all emissions. This is not just a divide between rich and poor countries: there are huge emitters in poor countries and low emitters in rich countries.

Consider the United States, for example. Each year, the poorest 50% of the US population emit about 10 tons of CO2 per person, while the richest 10% emit 75 tons per person. That’s a difference of more than seven to one. Similarly, in Europe, the poorest half emits around five tonnes per person, while the richest 10% emits around 30 tonnes – a difference of six to one. (You can now view this data on the Global Inequality Database.)

Where do these great inequalities come from? The wealthy emit more carbon through the goods and services they buy, as well as through the investments they make. Low-income groups emit carbon when they use their cars or heat their homes, but their indirect emissions – that is, emissions from the things they buy and the investments they make – are significantly lower than those of the rich. The poorest half of the population barely have any wealthwhich means that it has little or no responsibility for the emissions associated with investment decisions.

Why are these inequalities important? After all, shouldn’t we all be reducing our emissions? Yes, we should, but obviously some groups will have to try harder than others. Intuitively, we could think here of the big emitters, the rich, right? It’s true, and also the poorest have less ability to decarbonize their consumption. It follows that the rich should contribute the most to reducing emissions and that the poor should have the capacity to cope with the transition to 1.5C or 2C. Sadly, that’s not what’s happening – if anything, what’s happening is closer to the opposite.

This was evident in France in 2018, when the government increased carbon taxes in a way that particularly affected low-income rural households, without affecting the consumption habits and investment portfolios of the well-off too much. Many families had no way to reduce their energy consumption. They had no choice but to drive their car to work and pay the higher carbon tax. At the same time, aviation fuel used by the wealthy to travel from Paris to the French Riviera was exempted from the tax change. The reactions to this unequal treatment ultimately led to the abandonment of the reform. These climate action policies, which require no significant effort from the rich but hurt the poor, are not specific to any particular country. Fears of job losses in certain industries are regularly used by business groups as an argument to slow down climate policies.

Countries have announced plans to drastically reduce their emissions by 2030 and most have set plans to reach net zero somewhere around 2050. Let’s focus on the first step, the 2030 emissions reduction target: according to my recent study, expressed in terms of per capita, the poorest half of the population in the United States and in most European countries has already reached or nearly reached the goal. This is not at all the case for the middle classes and the wealthy, who are well above – that is, behind – the target.

One way to reduce carbon inequality is to establish individual carbon rights, similar to the systems some countries use to manage scarce environmental resources such as water. Such an approach would inevitably pose technical and informational problems, but it is a strategy that deserves attention. There are many ways to reduce a country’s overall emissions, but the bottom line is that anything but a strictly egalitarian strategy inevitably means requiring greater climate mitigation effort from those already at the target level, and less those who are well above. this; it’s basic arithmetic.

Arguably, any deviation from an egalitarian strategy would justify serious redistribution from the rich to the poor to compensate for the latter. Many countries will continue to impose carbon and energy taxes on consumption for years to come. In these contexts, it is important that we learn from previous experiences. The French example shows what not to do. By contrast, British Columbia’s implementation of a carbon tax in 2008 was successful – despite the Canadian province’s heavy reliance on oil and gas – because much of the tax revenue result is used to compensate low- and middle-income consumers through direct cash payments. Payments. In Indonesia, the end of fossil fuel subsidies a few years ago meant additional resources for the government, but also higher energy prices for low-income families. Initially hotly contested, the reform was accepted when the government decided to use the revenue to finance universal health insurance and support for the most deprived.

To accelerate the energy transition, we must also think outside the box. Consider, for example, a progressive wealth tax with added pollution. This would accelerate the shift away from fossil fuels by making access to capital more expensive for fossil fuel industries. It would also generate potentially significant revenues for governments that they could invest in green industries and innovation. Such taxes would be politically easier to pass than a standard carbon tax, since they target a fraction of the population, not the majority. At the global level, a modest tax on the wealth of multimillionaires with additional pollution could generate 1.7% of global income. This could finance the bulk of the additional investments needed each year to respond to climate change mitigation efforts.

Whatever path societies choose to accelerate the transition – and the possible paths are multiple – it is time for us to recognize that there can be no deep decarbonization without a deep redistribution of income and wealth.