People often think of their carbon footprint in terms of consumption, such as how they get to work or what they eat, but that provides an incomplete view of who is responsible for a lot of greenhouse gas activity, said Jared Starr, lead author of the study.
Many of the ways people earn money are also linked to carbon pollution, including from how and where they earn their wages to where they invest parts of their income. These investments, especially if linked with fossil fuel-related industries, can seriously tip who is most responsible for the nation’s greenhouse gas emissions, said Starr.
“It just seems morally and politically problematic to have one group of people reaping so much benefit from emissions while the poorer groups in society are asked to disproportionately deal with the harms of those emissions,” Starr, a sustainability scientist at University of Massachusetts, Amherst, said. Previous research has shown that extreme weather events made worse because of climate change, from flooding to hurricanes, often have a greater effect on lower-income communities.
Starr and his colleagues analyzed income data across U.S. households from 1990 to 2019 and linked it to emissions generated directly and indirectly from that income. They included income tied to emissions related to the operation of a business, such as from a coal-fired power plant. But they also included income, such as from investments, that supported services or products from those industries.
“As you move up the income ladder, an increasing share of emissions is associated with investments,” said Starr.
They found those who make enough income to be in the top 10 percent of American households are responsible for 40 percent of the nation’s greenhouse gas emissions. The top 1 percent of households accounted for 15 to 17 percent of the nation’s emissions, with investment holdings making up 38 to 42 percent of their emissions.
Then there were “super-emitters” with extremely high overall greenhouse gas emissions, corresponding to about the top 0.1 percent of households. About 15 days of emissions from a super-emitter was equal to a lifetime of emissions for someone in the poorest 10 percent in America.
The team found that the highest emissions linked to income came from White, non-Hispanic homes, and the lowest came from Black households. Emissions peaked until age 45 to 54, and then declined.
“This is a very interesting study looking at the emissions responsibility from income perspective, and it certainly offers new insights about how large the carbon inequality in the U.S. is,” said ecological economist Kuishuang Feng, who was not involved in the research.
On a global scale, Feng said, there is mostly consensus that the richest 10 percent may contribute to 40 to 50 percent of the global carbon emissions based on consumption. For the United States, the inequality is not expected to be so big based on consumption alone, “but if we take into account all the investment related emissions, the inequality of carbon in the U.S. is expected to be much bigger.”
French economist Lucas Chancel, who has studied global carbon emission inequalities but was not involved in the study, said the next step is to seriously talk about stopping investments in the fossil fuel sector, unless those industries radically transform themselves.
“All Americans contribute to climate change, but clearly not in the same way,” said Chancel. “Without policies such as regulations or taxes on very polluting investments, it’s unlikely that wealthy individuals making a lot of money from fossil fuel investments will stop investing in them.”
The study also calls for better climate policies to address these disparities. Top earners, who are benefiting financially from these emission industries, could be further incentivized to reduce their footprint or pay for the damage caused by the emissions. Starr believes an income or asset-based carbon tax could help motivate top earners, like corporate executives and board members, to decarbonize.
The Inflation Reduction Act could help provide incentives for companies to purchase and produce clean energy and clean tech products, said Shannon Baker-Branstetter, senior director of Domestic Climate Policy at the Center for American Progress, who was not involved in the study. That incentive could help other corporations reduce emissions through their own supply chains and operations, but she said the biggest challenge is in the political pressure to continue the status-quo dependence on fossil fuels.
Starr said he would expect pushback on any ideas, like taxes, that impact the wealthy groups. “The group we’re talking about here is the wealthiest, most economically and politically powerful group in the country, and it’s their policy preferences that dominate policymaking,” said Starr.
But he said he hopes this study will at least provide information on where improvements can be made.
“Let them have this information and then justify to the rest of the public — the other 99 percent of the public — why they don’t think we should be holding shareholders responsible for the emissions that are used to generate their wealth,” he said.