Part 3: With great wealth comes great climate responsibility
In this penultimate edition of our climate series we explore the link between inequality and climate action.
In the same way that the causes and impacts of the climate crisis are highly unequal (see parts 1 and 2), so is the capacity to act and adapt. In this week’s bulletin, we look at how inequality of consumption, investments, and influence on politics affects people’s ability to act on climate change.
We’ll be back in 2024 for the final edition on creating an economy for the 99% (spoiler alert – it includes wealth taxes!). Make sure to subscribe.
The power to respond in numbers
Power of consumption. Cutting emissions is easier the richer you are – a short trip on a private jet will produce more carbon than an average person will all year - no one needs a private jet, super yacht (even if it does have sails) or multiple mansions!
The majority of emissions from the 1% come from luxury goods and services. It’s shocking that the rise in emissions from the increase in SUV sales last year (70 million tonnes) almost cancels out the emissions prevented by new electric car sales (80 million tonnes).
The top 10%, responsible for half of global emissions, must also reduce their emissions substantially. Climate-aware consumption can make a difference but it is not enough.
In a carbon-addicted economy, reducing emissions goes beyond the personal capacity of the world’s majority. Instead, it requires deep structural changes to our economies, which governments must take responsibility for.
Power of investments. The super-rich’s extreme levels of wealth give them huge control over the direction of investments in key sectors and consequently on the world’s climate. Oxfam research found that billionaires tend to favour investments in heavily polluting industries, like fossil fuels. These industries are very profitable, 45 oil and gas corporations made on average $237 billion a year in windfall profits in 2021 and 2022, with most of this going to their rich shareholders in the forms of dividends and buybacks. A windfall tax on these profits could have increased global investments in renewables by 31%. Too many governments are failing to act, and they continue to prop up fossil fuels with subsidies of $5.9 trillion which helps make them attractive investments.
Political influence. The super-rich get their claws into almost every aspect of policy-making. As Oxfam revealed with The Guardian last week, 34 billionaires were registered at COP28, a quarter of them making their fortunes from highly polluting industries such as oil and gas, mining, or chemicals.
Many lawmakers also have significant investments in the fossil fuel industry. For example, members of the US Congress own $93 million in stocks in fossil fuel industries. Societies with higher wealth concentration at the top are less likely to take action on climate change.
The capacity of countries to respond. Global South governments lack the resources to address climate change and move away from fossil fuels. Rich countries have the greatest ability and responsibility to pay —they owe $192 trillion in compensation to low-emitting countries in the Global South. At COP15 in 2009, rich countries pledged $100 billion a year to support climate action, but by 2020 financial support specifically aimed at climate action only amounted to $24.5 billion at most, significantly lower than what officially reported numbers suggest. Equals covered this back in June.
Rich countries owe an aid debt of over $6.5 trillion. They are failing to take bold action on debt, SDRs and taxing the super-rich that could raise the trillions needed to tackle poverty, inequality and climate crisis in low- and middle-income nations.
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