The climate debt of the rich and the super-rich

A new report commissioned by Greenpeace Africa reveals that just 556,000 individuals, each possessing more than $38 million, cause annual climate damages amounting to nearly $992 billion. This figure represents approximately the financial need of developing countries for mitigation efforts, adaptation measures, and loss and damage compensation. These individuals account for 0.01 percent of the adult global population, with each generating an average of $1.78 million in damages annually through their capital holdings and $729,000 through consumption. On average, these individuals hold assets worth $197 million, meaning they would need to pay less than one percent of their wealth to cover their annual climate debt. The report defines “climate debt” as the monetary value of damages caused when an individual exceeds their fair share of the global carbon budget. According to the latest IPCC report from 2020, the remaining carbon budget to limit global warming to 1.5°C with a 66 percent chance was 400 gigatonnes of CO₂. Theoretically, this meant each person could emit up to 47 tonnes of CO₂. However, much of this budget has already been used. Today, per person, only 16 to 20 tonnes remain. At current emission rates, the budget will be exhausted within three years. Globally, the average temperature has risen by 1.4°C above pre-industrial levels, while Austria has experienced an increase of 3.1°C. The report highlights how climate responsibility is heavily concentrated among the wealthiest individuals. It uses social carbon costs of $283 per tonne of CO₂, considering both consumption-based emissions, such as air travel, private jets, yachts, multiple residences, and ownership-based emissions, such as shares in oil companies, automotive or aviation production firms, and construction businesses. Ownership-based emissions reveal a stark disparity: the top 0.01 percent of the population have climate debts per capita 130 times higher than the average of the top ten percent. Climate responsibility at the top is primarily driven by ownership rather than consumption. In 2022, the top one percent of the wealthiest individuals accounted for roughly 41 percent of ownership-based emissions but only 16.5 percent of consumption-based emissions. Current climate policies and fiscal instruments mainly target production and consumption-based emissions, leaving ownership-based emissions, linked to investment portfolios, corporate ownership, and equity investments, relatively under-taxed. The report emphasizes the urgent need for new fiscal policy tools that address not only tax inequality but also the environmental and ecological impacts of extreme wealth concentration. It calls for reforms that consider how wealth is generated, including the environmental consequences associated with carbon-intensive property and investment structures. A consistent implementation of the “polluter pays” principle at all levels is deemed crucial for creating fairer national and international fiscal systems aligned with sustainable development goals and other global commitments. The findings underscore the growing urgency for systemic change in how wealth and emissions are managed globally. As the world continues to warm, the gap between the wealthy and the rest of society grows wider, highlighting the need for equitable solutions that reflect the true cost of climate harm.