Poor of a country emit less, lose more: New paper calls for progressive taxes for ‘polluting elites’

This report, for the first time, has stressed on the differing responsibilities of individuals and not just countries

By Bipsa Nanda
Published: Wednesday 08 February 2023
Photo: iStock

Low- and middle-income countries are disproportionately impacted by climate change even though they emit less greenhouse gases than their richer counterparts. 

The gap between the carbon emissions of the rich and the poor within a country, however, is higher than the difference in overall emissions among countries, according to the Climate Inequality Report 2023 written by economists from the World Inequality Lab at the Paris School of Economics.

The objective of the report was to decode the magnitude of climate inequality based on a detailed systematic analysis focusing on low- and middle-income countries. The report’s authors have coupled this analysis with empirical data and studies to advocate advanced pathways to develop taxing and social policies that combat climate inequalities at their centre.

The report identified the key contributors and provided a firm perspective on climate inequalities. They have compared the global bottom (50 per cent), middle (40 per cent) and top (10 per cent) income countries. 

They found that 48 per cent of emissions is from the top 10 per cent of emitters, having 76 per cent capacity to finance, and their relative loss is a mere 3 per cent from climate change. 

However, the global bottom (50 per cent) has only a 2 per cent capacity to invest, with an emission of 12 per cent and a massive relative loss of 75 per cent. 

The report introduced a section labelled “polluting elites”. The 65,130 wealthiest individuals in this section with over $100 million (around €92 million) and representing 0.001 per cent of the world’s adult population, should pay a ‘progressive tax’ ranging from 1.5-3 per cent of their fortune to help less fortunate people adapt to global warming and crisis, the authors asserted.

They also illustrated how combating global poverty need not overshoot global carbon budgets to meet the Paris Agreement targets. They suggested redistribution measures to combine poverty alleviation and climate change mitigation efforts towards increased efficiency. 

Considerably reducing the share of people in energy poverty (from 60 per cent at present to 10 per cent) would only moderately increase global energy consumption by 6.7 per cent, the authors wrote citing data from a 2021 report. 

Climate change contributes to economic destitution in many ways. It lowers agricultural productivity in poorer countries. “Tropical cyclones and floods will continue to displace millions in low-income countries, and rising sea levels will make coastal land inhabitable. While such events affect our planet communally, studies point to a robust socio-economic relationship between exposure (especially vulnerability) and current living conditions, whereby the worst off are more affected than the rest,” said the authors of the report.

Some temperate countries are seeing their agricultural productivity increase under global warming, and their gross domestic product is also growing. In contrast, many subtropical and tropical countries are facing significant output losses due to global warming.

The report, citing the findings of a 2022 paper, pointed at a positive but decreasing effect of total annual rainfall on average output growth.

Climate change also has adverse effects on mental health. A 1 degree Celsius increase in monthly average temperatures increases suicide rates by 0.7 per cent in the US and 2.1 per cent in Mexico, the report noted.

It shed light on the changing nexus as emerging powerful economies like China now carry increased responsibility for the carbon dioxide stoke in the atmosphere. The authors demanded they produce transparent strategies for reaching Net Zero emissions.

"This report underscores once again the need for a just transition to a low carbon economy which reflects unequal responsibility for causing the climate crisis and uneven capacity to help address it,” they wrote.

For decades there have been discussions about how countries have disparate responsibilities toward combating climate change. This report, for the first time, has stressed the differing responsibilities of individuals. It proposed the application of the ''common but differentiated responsibilities'' principle among individuals. 

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