A proposal to tax the world's rich to finance the effects of climate change

A proposal to tax the world's rich to finance the effects of climate change

The wealthy account for half of global carbon emissions.

Carbon revenue continues to grow
Days before the World Climate Conference in Glasgow, the World Inquality Lab urged governments to adopt the idea of ​​taxing the world's rich to finance the effects of global warming, as they are the biggest culprits of this problem compared to the poor.

While the levels of carbon emissions this year are higher than those before the outbreak of the epidemic, the richest one percent contributed to the emission of an average of 110 tons of carbon dioxide in 2019 for each one. Cumulatively, that represented 17 percent of global carbon dioxide emissions in the same year.

According to a study by economist Lucas Chancelle, co-director of the World Education Lab at the Paris School of Economics, all these emissions come from the consumption and investment behavior of this population; The richest people, 10 percent, account for half of global emissions.

In contrast, the poorest half of the world's population contributed only 1.6 tons of carbon per capita, equivalent to 12 percent of global emissions.

Lucas Chancelle: Taxes imposed on the biggest polluters must be reviewed
And the French Press Agency quoted Chanel as saying that "there is a large disparity in the contributions to the climate problem," adding that "the gradient in income and inheritance makes it possible to explain a large part of the variance" in emissions.

In addition to the richer people, developed countries have a much higher carbon footprint after taking into account products manufactured abroad and imported on their soil.

For Europe, which the study has pointed the finger at, including carbon emissions from these products inflates the final bill by about 25 percent.

Among the proposed solutions, the report recommends that individual emissions be taken into account more in public policies, in order to better define polluting behaviour.

“This can be done through instruments that target investment in polluting activities and fossil fuels,” Chancel noted, for example progressive taxation of equity ownership associated with non-green activities.

"The taxes on the biggest polluters should also be reviewed," he added, referring to progressive environmental taxes on wealth.

"Such a tool could be more viable than carbon taxes that hurt low-income groups and fail to reduce emissions from the wealthy," he added.

The study's publication coincides with the release of data by the Institute for Climate Economics showing that global carbon revenues from taxes or quota markets will rise in 2020 to nearly $57 billion.

Marion Vauté: Despite the pandemic and the health situation, we are witnessing an increase in carbon revenues
"We are witnessing an increase in carbon revenues despite the epidemic and the health situation," said researcher at the institute Marion Foett and co-author of the study, which was published Thursday on "Global Carbon Accounts in 2021".

Revenue includes $29.5 billion from a carbon tax and $27.3 billion from quota markets. This represents an increase of more than 18 percent on an annual basis and more than three times compared to 2016.

However, Foett says that behind these revenues is a heterogeneity in carbon prices, as "more than 46 percent of regulated emissions with carbon pricing are covered by a price of less than $10".

In the opinion of the institute, this is far from "the international scientific consensus that estimates that the full catalytic effect of these mechanisms is achieved through prices between $40 and $80 per tonne of carbon dioxide in 2020".

“This raises the question of proportionality,” Foett explained; On the one hand, governments impose carbon taxes, and on the other hand, “fossil fuel subsidies will still represent at least $450 billion in 2020.”

This also raises the question of how the revenue generated will be used; In France, for example, all carbon tax revenues go to the state budget, while in Japan it is “directed towards sustainable development projects”.
Previous Post Next Post