The World Inequality Report found the wealthiest in the world contribute the most carbon emissions.
Financial assets also make up a larger share of their wealth, not real estate.
The report suggested having those people pay more to fight 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 its 2022 report on Tuesday, which examines global wealth distribution across the world. It found that wealth is directly correlated with the climate crisis, and the people who tend to own the most financial assets are also the people contributing the most to carbon emissions across the globe.
Specifically, the report found that the main form of wealth owned by the lowest-income is cash or bank deposits, the middle class typically owns bank deposits along with real estate, and for the richest people, 40-60% of their wealth comes from financial assets. In the very top groups, as the report noted, financial assets, like stocks and bonds, can account for 90-95% of all wealth in countries like France or the US.
And those people are the ones that are also contributing the most to carbon emissions. According to the report, the top 10% of earners account for emit 47.6% of the total carbon emissions, while the global bottom 50% emit 12% of the total. A reason for this disparity can be chalked up to the carbon tax: while in some countries, the tax has been implemented successfully, other countries, like France, do not consider socio-economic context.
"Large inequalities in emissions suggest that climate policies should target wealthy polluters more," the report said. "So far, climate policies such as carbon taxes have often disproportionately impacted low and middle income groups, while leaving consumption habits of wealthiest groups unchanged."
To date, the standard way of thinking about carbon taxes has been in the context of a uniform rate, in which every person should pay the same tax regardless of wealth. But, as the report noted, that gives the wealthy more authority to pollute, stressing the need for a progressive carbon tax: a tax that increases with the level of emissions or the level of wealth of individuals.
In other words, the people who own the most assets should be paying more for their share in polluting the climate.
And, as some Democratic lawmakers argue, the wealthy should be paying their fair share not only on carbon taxes, but in all taxes. Progressive Sens. Elizabeth Warren and Bernie Sanders have championed the idea of a wealth tax that would place a 2% tax on household net worth between $50 million and $1 billion and a 3% tax on household net worth over $1 billion.
—Bernie Sanders (@BernieSanders) February 18, 2021
Currently, the US does not have a federal carbon tax, but Democratic lawmakers recently proposed a tax on imports from other countries that do not reduce carbon emissions. President Joe Biden also has a plan to cut carbon emissions in half by 2030, and he plans to accomplish this through a $550 billion investment in his Build Back Better framework that is being negotiated in the Senate.
Should the US — and the world — succeed in dramatically reducing carbon pollution, wealth inequality could likely be lessened as a result.
Read the original article on Business Insider