The richest 0.1 percent of U.S. households generating income for just 15 days generates as much carbon pollution as the poorest 10 percent of the population earns over a lifetime.
This is one of the findings of a new study published in PLOS Climate that looked at greenhouse gas emissions associated with the money people earn, spend and save.
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As income increases, so does environmental impact, the study found. The top 10% of U.S. households were responsible for 40% of the nation's total emissions in 2019, according to the paper. The chasm is especially wide when comparing households in the highest percentile with households in the lowest percentile.
Jared Starr, a sustainability scientist at the University of Massachusetts Amherst and lead author of the paper, said investments are playing an increasingly large role in significantly increasing the carbon footprint of high-income households. Ta.
Graphic: Megan McGrew/PBS NewsHour
When we think of carbon emissions, we typically think of measuring individual behaviors, such as driving a new car, flying, or eating a meat-based diet. Starr said that while the relationship between consumer choices and emissions has been of interest for decades, there has been relatively little research focused on emissions that result from generating income itself.
“You can think of your [carbon] In addition to leaving a footprint in terms of what you buy and your lifestyle, you can also think about where your money is going. And how do you invest your money, who has your retirement savings, and what kind of company do you work for? '' said Richard Wilke, an anthropologist and professor emeritus at Indiana University who was not involved in the study.
Even as world leaders and scientists emphasize the increasingly urgent task of decarbonizing the global economy to combat climate change, fossil fuels are still being used in countless aspects of our lives. continues to supply power. This extends to the wages and investment income that households may receive from industries that rely on fossil fuels to operate.
To conduct their analysis, Starr and his colleagues first calculated the carbon intensity per dollar of revenue generated across multiple industries. Essentially, he explained, the calculation refers to the emissions used to generate one dollar of income. They defined emissions as producer-based or supplier-based.
Starr cited the energy industry as an example. Producer-based emissions come from power plants that run on fossil fuels, whereas supplier-based emissions are based on who enables a power plant to generate emissions, such as the companies that sell the fuel. Calculated based on whether they are using.
Companies that extract fossil fuels such as oil, natural gas and coal have a larger footprint because they supply the economy with that fuel, Starr explained. That fuel is later burned by another entity, but those companies are responsible for supplying the fuel in the first place, he added.
Starr also pointed out that the framework exposes the responsibilities of “hidden” types of industry further up the chain, such as companies that finance or provide insurance for drilling projects.
The researchers then combined that information with survey data on U.S. households, including major employment industries, Starr said.
“If you work in finance, real estate or insurance, you are likely to contribute to a much higher carbon footprint than if you work in hotels, restaurants, education, retail or wholesale, etc. That's something we really didn't know before,” Wilk said of the study. The paper also looks at other industries, noting that “super-emitting households” can belong to any sector of the economy.
Starr added that the survey data also includes pre- and post-income tax categories such as wages, investments, and amounts in employer-sponsored retirement and health insurance plans.
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Starr said he estimated the carbon footprint of income from investments such as stocks, bonds and company holdings using a model portfolio that reflects the economy as a whole (with algorithmic randomization). .
Income from investments is less common in lower income groups. This is because these groups typically earn income through wages, much of which is spent rather than saved.
“Basically, the bottom half of the U.S. population is [in terms of income] “You spend everything that comes in, you spend it on goods and services,” Starr said, adding, “As incomes rise, households save more and more, or save and then reinvest in things like the stock market. ” he said.
Graphic: Megan McGrew/PBS NewsHour
Starr and his colleagues also found that while wealthy white groups have increased their incomes through emissions production, black Americans are disproportionately represented in lower-income groups.
He said that even though Black communities, other communities of color, and low-income communities contribute far less to climate change than groups that benefit economically from industries that promote warming. It pointed out that the country is disproportionately bearing the impacts related to climate change.
“I think one of the things we can all do is stop scapegoating the poor and middle class, who are doing their best to hold themselves accountable,” Wilk said, adding that instead, If the top 1 percent cut emissions in half, it would make a huge difference to the total for this country.
How can we address inequality?
While individual action alone will not solve the climate crisis, with the International Panel on Climate Change stressing the importance of “structural and cultural change” alongside these efforts, people's choices will It remains true that it impacts carbon emissions. And wealth is the main determinant of how big that footprint is.
Starr said several countries have introduced consumer carbon taxes, which include taxing fossil fuels at the point of production, which ultimately lowers the price of goods for consumers. It is said that it will rise.
Poor people tend to bear the brunt of the costs because they spend most of their income on things like carbon-intensive goods. He said that given that wealthy households save a relatively large proportion of their income, they are not as affected as other households when they have to absorb the carbon tax that consumers pay. Stated.
Low-income households also don't always have the time, specific knowledge, and control over the various factors needed to make low-carbon choices about the products they buy, Starr added. Furthermore, the economy does not always provide such types of items as viable options.
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“What's missing in these discussions is people actually pointing the finger at the responsibility that many of us are taking for reducing the number of green choices we make,” said Giovanni Baiocchi, an applied environmental economist at the University of Maryland. That doesn't mean there aren't.”
So what policies would encourage those with the most economic power to decarbonize their investments? One option, in Starr's view, would be to tax investments based on their carbon intensity. In this scenario, companies that require large amounts of emissions to create value for shareholders would face higher taxes than companies with lower carbon emissions, Starr said. That change would align decarbonization with their economic interests.
Taxing investments in this way could also encourage people who manage pensions and personal assets to change investments to save money for their clients, Starr added.
He suggested that the tax revenue could also be used for loss compensation or damage funds, allowing rich countries to use fossil fuels to help poorer countries that are less developed but bear the disproportionate burden of the negative effects of climate change. He indicated that he is committed to establishing a support group.
“We are not decarbonizing our economy fast enough to meet our goal of making the planet habitable, which is the 1.5°C temperature target,” Starr said. “Current policy solutions are not enough, so I think we need to look at what else can be done.”
