Not everyone is responsible for the same level of greenhouse gas emissions. A new study found that the wealthiest Americans, those that are in the top 10% of earners, are responsible for 40% of the US total greenhouse gas emissions. It’s the first study to link income, especially income derived from financial investments, to emissions.
Scientists and campaigners have long known that consumption – the food we eat, the vehicles we drive, and the stuff we buy – is linked to greenhouse gas emissions. Environmental policy has sought to either limit consumption or guide it to more environmentally friendly choices, such as eating less red meat or driving an EV.
However, this is a regressive approach, Jared Starr, study author, said in a news release.
“Consumption-based approaches to limiting greenhouse gas emissions are regressive. They disproportionately punish the poor while having little impact on the extremely wealthy, who tend to save and invest a large share of their income,” Jarr added.
Starr and his colleagues at the University of Massachusetts Amherst looked at 30 years’ worth of data, working with a database of over 2.8 billion financial transfers and then following the flow of carbon and income through these transactions. This allowed them to calculate supplier-based and producer-based greenhouse emissions (GHG) of income
Supplier-based GHG emissions refer to the emissions that are enabled by the production of goods and services that households purchase, including both direct and indirect emissions from the entire supply chain. In contrast, producer-based GHG emissions refer to the direct emissions from the production of goods and services by industries. With these two figures, the team then linked emissions data with demographic and income data to calculate the carbon footprints of U.S. households based on their income sources.
“I was interested in capturing the full spectrum of American society - including the top income households. This group is traditionally under-represented in national surveys, but they have the most economic and political power over how carbon intensive our economy is and what climate policy solutions are enacted,” Jarr told ZME Science.
Not only the researchers found that 40% of the US emissions are linked to the income flows of the 10%, but they also discovered that the top 1% of earners generate between 15% and 17% of the US emissions. White, non-Hispanic households had the highest emissions-linked income, while Black households have the lowest, the study showed.
Emissions increased with age, peaking in the 45-54 age group and then declining. The researchers also identified the so-called “super emitters” which have very high emissions intensity. These are almost exclusively among the top 0.1% of households and are overrepresented in the fields of finance, real estate, and insurance.
On average, the 0.1% creates more emissions in 15 days than the bottom 10% of households create in a lifetime.
“That’s a very troubling level of emissions inequality when we consider that the poorer group faces disproportionate climate harms. There’s a real mismatch between those benefiting and those being harmed,” Jarr told ZME.
Starr and his colleagues suggested that policymakers should adopt taxes focused on shareholders and the carbon intensity of investment incomes to meet the grand goal of keeping the global average temperature to 1.5C of warming. We are already at 1.1C, so ambitious actions will be needed ahead to avoid further consequences of the climate crisis.