Part 4: A planet for the 99%
Welcoming in the new year, we finish our series on climate and inequality making the case that an equal transformation is possible.
Over the last few weeks, we’ve dived into the data about the inequality of emissions, how the rich are largely insulated from the pain they’re most responsible for creating and the influence of the wealthy on climate policy. In a COP28 exclusive investigation with The Guardian, we revealed how billionaires turned up in force at the climate conference.
Finishing off this mammoth study, we explore what an equal transition would take.
A planet for the 99% in numbers
An equal transition is possible. Avoiding catastrophic climate breakdown requires a 48% cut in global emissions by 2030 (compared to 2019 levels) and, by 2050, emissions must fall to zero. This will take a radical increase in equality and a rapid transition away from fossil fuels.
“You can’t end poverty and stop climate breakdown”. A significant number of recent academic studies (see footnote 314) have proven this to be wrong and researchers at the World Bank found that if inequality was reduced, the amount of carbon emissions required to eradicate extreme poverty would be one-third of what it is with current levels of inequality.
We calculated two scenarios, ending poverty with and without tackling inequality to see what would happen to carbon emissions.
Ending poverty without tackling inequality. If inequality remained unchanged and everyone on Earth suddenly earned at least the prosperity line of $25 a day, it would increase emissions by around 4.4 billion tonnes of CO2 or 12% of 2022 global emissions.
Ending poverty by tackling inequality. In a scenario where global income was redistributed to ensure that everyone earned above $25 a day, then global emissions would be reduced by 10% (roughly the equivalent of the total emissions of the European Union), and still leave the global richest 10% with an average income of around $47,000 PPP pre-tax.
If you’re interested in how we calculated these numbers, check out the methodology note.
A just transition away from fossil fuels. The energy sector accounts for around three-quarters of greenhouse gas emissions which need to be cut to net zero within 26 years. Energy is vital for human flourishing: 675 million people do not have access to electricity, and up to 2.3 billion people still use polluting fuels and technologies for cooking.
The transition to clean energy must be fair, with the remaining carbon budget prioritised for development needs and wealthy countries phasing out fossil fuels first and fast. Clean energy offers huge economic, social, and environmental benefits, but for this to happen, justice and community rights must be at the core of the transition.
Funding an equal transition. Three taxes could raise more than $9 trillion to build a green and equal world and reduce the emissions of the richest and their influence on politics.
Wealth tax – $1.7 trillion a year. A wealth tax of 2% on the world’s millionaires, 3% on those with wealth above $50 million and 5% on the world's billionaires would generate $1.7 trillion. A top-up punitive wealth tax on investments in polluting activities could raise at least a further $100 billion a year.
Top income tax – US$6.4 trillion a year. An income tax of 60% on the top 1% of earners would generate $6.4 trillion per year and could reduce global emissions by 700 million tons, more than the total emissions of the United Kingdom.
Windfall corporate profits tax – up to US$941 billion. Last July we revealed that the world’s largest corporations made $1 trillion in windfall profits, a tax of 50–90% on the windfall profits of these 722 mega corporations could have generated up to $941 billion.
A new purpose for a new age. The current economic system, geared towards driving ever-greater wealth for the already rich, is driving us over the precipice. The focus on economic growth of any kind and endless extraction and overconsumption at any cost must end. Instead, the primary focus for the economy should be the twin goals of human and planetary flourishing.
This short bulletin can only touch the surface of the policy vision set out in the full report so if you want to dive into the details check out the full report.
That’s us for our climate inequality series. Next week we’re investigating the war profiteers before the big moment in the inequality calendar – Davos!