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For equality and the climate, a European wealth tax

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This week the economist Thomas Piketty called for private jets to be banned because of their disproportionate emissions (oneinchpunch/shutterstock.com)

The richest 10 per cent in the world are responsible for the same carbon emissions as the poorer half of the population.

Ahead of the United Nations climate summit in Dubai, research by Oxfam underscores a stark reality: a person from the richest 1 per cent in the European Union emits, on average, 14 times as much carbon as someone in the bottom 50 per cent. The extravagant carbon footprint of Europe’s wealthy not only exacerbates the climate crisis but also leads to nearly 850 excess deaths a year due to heat-related issues.

The numbers are staggering on a global scale too. In 2019, the richest 1 per cent worldwide—just 77 million people—were responsible for 16 per cent of global consumption emissions, surpassing all those from cars and other road transport. If we consider the emissions embedded in financial investments, a billionaire emits over a million times more than someone in the bottom 90 per cent.

Hit hardest

This huge inequality is also evident when talking about who is most affected by the climate crisis. Ordinary people, especially the poorest, are hit hardest. They face the worst of floods, droughts, heatwaves and fires. Seven times as many people die from floods in more unequal countries.

By contrast, the global 1 per cent can afford to escape, live in safe places and insulate themselves from climate impacts. With their emissions set to be 22 times by 2030 what would be compatible with the Paris Agreement’s desired goal of confining global heating to 1.5C from preindustrial times, climate breakdown and inequality are locked in a vicious circle.

Yet neither is inevitable. They are a result of policy choices, which can be reversed.

Facing the climate crisis means rethinking our economies. We need to shift away from using gross domestic product as a measure of human progress, which it fails to provide. As the oft-repeated slogan goes, ‘there are no jobs on a dead planet’. We need an economy that is based not on short-term profits but on what is sustainable in the long term—which focuses on ending inequality, moves away from fossil fuels and makes those most responsible for the climate crisis pay.

Game-changer

Taxing the super-rich is a game-changer. The 1 per cent are barely taxed in today’s world, despite being the biggest polluters. This is not fair. Taxing the rich could achieve three things at once.

First, it would reduce emissions. A 60 per cent income tax on the global 1 per cent could slash emissions by 695 million tons, equivalent to one-fifth of the EU’s total emissions in 2019.

Secondly, it would reduce the concentration of power and influence of the richest, and most-polluting, elite and companies over the economy, politics, policy and the media. The super-rich and corporations promote over-consumption and a carbon-based economy, making efforts to reduce emissions by others far harder. A notorious example is Rupert Murdoch, who, with his family, controls international media conglomerates, including News Corp, Fox News and many other outlets, which have been denying the climate crisis and spreading misinformation for decades.

Thirdly, it would raise trillions of euro for a green future. A 60 per cent tax on the global top 1 per cent of earners would rake in nearly €6 trillion a year. This could bankroll the shift away from fossil fuels to renewable energy.

A European wealth tax

Oxfam wants the EU to take the leap and introduce a European wealth tax. Such a tax could raise €250 billion annually—the equivalent of one-third of the EU’s recovery fund, one of the pots that finance the European Green Deal.

This type of tax would target only the carbon-spewing elite in the EU and not ordinary people. It could start at 2 per cent on millionaires with wealth above €4.6 million, 3 per cent on those with wealth above €45.7 million and 5 per cent on billionaires.

Together with economists, multi-millionaires and politicians, Oxfam is supporting a European Citizens’ Initiative for a European wealth tax. With this petition, Europeans can call on the next European Commission to tax Europe’s wealthiest.

Billions of euro are at stake to invest in fighting poverty, inequality and the climate crisis. A European wealth tax would move us closer to a world where climate justice is achieved and the burden of the crisis is fairly shared among Europeans and globally.

Chiara Putaturo
Chiara Putaturo
  Chiara Putaturo is deputy head of the Oxfam EU office, where she is adviser on inequality and tax policy. She previously worked at Transparency International in Italy.  
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