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21 February 2022

Weekly data: Targeting the super-rich could contribute to net zero

The wealthiest 10% of the global population is responsible for almost half of individual carbon emissions. Targeting these high-income consumers could significantly reduce the carbon footprint of households.

By Isabeau van Halm


The 12th UN Sustainable Development Goal sets the ambition for “responsible consumption and production”. Recent studies suggest that to reach this goal, high consumers need more attention.

“High consumers have the potential to make a big difference in relation to human environmental impact by reducing their use of resources, with minimal consequences for their well-being,” wrote researchers from Sheffield Hallam University in a study on high consumers and their environmental impact published in October 2021.

The wealthiest 10% of the global population is responsible for almost half of individual carbon emissions. (Photo by TR STOCK via Shutterstock)

In the study, the researchers found that income is a significant predictor of household consumption-related environmental impact. With an increase in income, both direct emissions, such as those from fuel and electricity use, and indirect emissions – from food and goods, for example – increase.

According to data from a study for the World Inequality Database (WID), the top 10% wealthiest people are responsible for almost half of individual CO2 emissions globally, with the top 1% contributing close to 17%. In contrast, the bottom half of people are responsible for just 12% of individual carbon emissions. Based on an input-output framework that represents the interdependencies between different economy-environmental sectors, the same study estimates that 60–70% of the global carbon footprint can be traced to individual consumption.

While there are significant differences in historical CO2 emissions between countries – with the US and Europe contributing the most to global emissions – the trend of carbon inequality persists within every region.

“While two-thirds of the inequality in individual emissions was due to emissions inequalities between countries in 1990, the situation almost entirely reversed in 2019: 63% of the global inequality in individual emissions is now due to gaps between low and high emitters within countries,” said researcher Lucas Chancel in the WID study.

To target high-consuming households, the Sheffield researchers suggest targeting high-income households. However, they warn against policies that have a market-based approach.

“Some studies show that as income rises, households are less sensitive to energy price increases, which means that price mechanisms might not be the most effective way to promote efficiency among high-income segments of the population,” they said.

A consumption-based tax could also disproportionately affect low-income households. Low-income households are more likely to reduce consumption to conserve resources, while high-income households are not only less vulnerable to rising energy prices but are often unwilling to reduce their energy use. The current energy price crisis could increase the carbon footprint gap in affected countries.

The UK government has warned that rising prices will affect those on the lowest incomes the most. According to the latest figures, the poorest 10% of households in the UK already spend 7% of their disposable income on gas and electricity, while the richest 10% spend 2%. The London-based Institute for Public Policy and Research (IPPR) estimates that share will rise to more than 10% for the poorest households.

Furthermore, the IPPR warns that a proposed relief scheme, where households could get up to £350 this year to help with the cost of living, will do little to help the most vulnerable.

“Our analysis shows that two million of the poorest people would miss out on automatic help and have to apply for discretionary support,” said George Dibb, head of the Centre for Economic Justice at the think tank, in a press release. “At the same time, 44% of the richest will benefit from a tax cut through this unfocused scheme.”

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