Should ‘super emitters’ be taxed for climate impact of their income?

The richest 10 per cent of US households are responsible for 40 per cent of the country’s greenhouse gas emissions, a new study reveals.

Rather than focusing on consumption – such as transport, food or energy use – the study looked at emissions linked to people’s income.

They found that wealthy US households reap the biggest benefit from emissions while being most responsible for them.

The study’s authors argue that an income based carbon tax – particularly on investments – could help reduce climate inequality and fund much needed decarbonisation measures.

Rich households responsible for the most emissions in the US

The study, published in the PLOS Climate journal, examined data on emissions generated by the way people earn money. This included types of jobs along with retirement and passive income from investments that support polluting industries.

Analysing the incomes and emissions of five million US individuals between 1990 and 2019, it found a “significant and growing emissions inequality that cuts across economic and racial lines.”

The richest 1 per cent of households were found to be responsible for 15 to 17 per cent of all emissions in the US. Of this, 38 to 43 per cent was tied to investments.

White non-Hispanic households were the highest emitters (33-36 tonnes CO2e annually) while Black households were the lowest (17 tonnes CO2e).

In 2019, people in the top 1 per cent for income were 76 per cent White non-Hispanic, 8 per cent Hispanic and only 3 per cent Black, the study notes.

These disparities have grown over time.

This demonstrates “a powerful disconnect between those facing the worst climate impacts and those reaping the economic and consumption benefits that drive greenhouse gas (GHG) emissions”, the authors write.

Various other research has shown that low income households and countries that contribute least to climate change tend to face its worst effects.

Super emitters: Which types of jobs are most polluting?

Termed ‘super emitters’, 43,200 US households were found to emit more than 3,000 tonnes of carbon dioxide equivalent per year.

Finance, real estate, insurance, manufacturing, mining and quarrying were among the most common industries for super emitters.

Households earning income from accommodation, restaurants, education, retail and wholesale trade were least represented in this category.

Should investments face a carbon tax?

Those who benefit most from planet-heating emissions should be held most responsible for mitigating them, the study argues.

The findings support the need for an income based carbon tax – especially on investors, its authors say.

This could incentivise people to shift their investments to less polluting industries or funds, while generating the money needed to help keep the globe within the 1.5C warming limit.

Tax revenue could be used for climate adaptation and mitigation schemes, including loss and damage funds, they suggest.

This would help to address the disparities between those driving the most emissions and those disproportionately experiencing the harms they cause.