Together, the 125 richest people in the world emit as much greenhouse gas emissions as the whole of France – about 393 million tonnes of CO2 each year – shows a report published by Oxfam on Monday.
Although these billionaires' investments are capable of steering the economy in a greener direction, they generally put their money into companies that are (on average) twice as climate-unfriendly as a typical investor would, concluded the report, titled Carbon Billionaires: The investment emissions of the world’s richest people.
"These few billionaires together have ‘investment emissions’ that equal the carbon footprints of entire countries like France, Egypt or Argentina," Nafkote Dabi, Climate Change Lead at Oxfam, stated in a press release. "The major and growing responsibility of wealthy people for overall emissions is rarely discussed or considered in climate policy-making. This has to change. These billionaire investors at the top of the corporate pyramid have a huge responsibility for driving climate breakdown. They have escaped accountability for too long."
In the report, the authors try to identify the overall climate impact of the spending and investment patterns of the world's very richest elite. They conclude that a wealth tax should be increased by a rate that taxes investment in polluting industries more heavily.
The world's wealthiest people account for at least 3.1 million tonnes of CO2 per person – over a million times as much as the bottom 90% of the world's population, which remains below 3 tonnes per person. However, these averages still hide big disparities as the average Dutch citizen has a carbon footprint of over nine tonnes.
"Emissions from billionaire lifestyles, their private jets and yachts are thousands of times that of the average person, which is already completely unacceptable," said Dabi. "If we then consider the emissions from their investments, their total emissions are over a million times higher."
Because the economy still generates a lot of CO2, so do their investments. In the same way, regular people put money into CO2-emitting sectors through their pension pots, but on a much smaller scale. As the amounts of money involved are much larger, the emissions are also magnified.
To compound the problem, billionaires still invest their money in sectors that are exceptionally carbon-intensive. Only one billionaire in the sample had investments in a renewable energy company.
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Every million dollars invested by these billionaires produces an annual emission of 162 tonnes of CO2; investing $1 million in a fund that tracks the S&P 500 (the broad index of US-listed companies) would "only" produce 86 tonnes of CO2.
“The super-rich need to be taxed and regulated away from polluting investments that are destroying the planet," Dabi stressed. "Governments must also put in place ambitious regulations and policies that compel corporations to be more accountable and transparent in reporting and radically reducing their emissions."
Oxfam has estimated that a wealth tax on the world’s super-rich could raise $1.4 trillion a year, vital resources that could help developing countries – those worst hit by the climate crisis – to adapt, address loss and damage and transition to renewable energies.
According to the United Nations Environment Programme, adaptation costs for developing countries could rise to $300 billion per year by 2030. The continent of Africa alone will require $600 billion between 2020 to 2030.