Billionaires are responsible for about one million times more planet-warming pollution than the world’s average Joe when you take their investments into account, according to a new report from the British-founded international charity Oxfam.
The report is based on an analysis of the investments of 125 of the world’s richest billionaires, including Bill Gates, Warren Buffett, and Elon Musk. Together, those 125 individuals’ investments help enable 432.3 million tons of planet-heating CO2 every year, the authors said.
That’s a combined carbon footprint roughly equivalent to that of the entire country of France, and works out to be some 3.5 million tons per billionaire from investments, the report says.
“These billionaire investors at the top of the corporate pyramid have huge responsibility for driving climate breakdown,” said Nafkote Dabi, climate change lead at Oxfam, in a statement. “They have escaped accountability for too long.”
To calculate the carbon footprint of billionaires’ investments, the researchers compiled a list of the world’s wealthiest 220 people, using Bloomberg’s Billionaires Index. They then identified corporations in which those people hold at least a 10 percent equity stake — a level of investment widely considered to give a shareholder substantial influence over a company, and one that the national Securities Exchange Commission says makes someone a “principal shareholder.”
The authors calculated each of those corporations’ direct carbon impact, as well as their indirect emissions from energy and fuel usage with data from the financial services firm Exerica. They then allocated each billionaire a share of the reported emissions of the companies in which they had investments, in proportion to their stake.
Mountains of past research have shown that the world’s richest people have extremely carbon-polluting lifestyles, thanks to their highly emitting private planes, yachts, and mansions. But those analyses paint an incomplete picture, the Oxfam report says.
What’s more of a problem for the climate is how the super-rich choose to invest their money. To match the average billionaire’s investment carbon footprint, someone “would have to circumnavigate the world almost 16 million times in a private jet,” the new report says.
“Because their investments are a matter of choice, billionaires have the responsibility to shift their investments away from fossil fuels and fossil fuel dependency, which will in turn shift the behavior of corporations and the market,” said Ashfaq Khalfan, climate justice director at Oxfam America.
The authors said each billionaire in their analysis had an average of 14 percent of their investments in highly polluting industries such as oil, gas, and cement — an overinvestment, the the authors say, since those sectors represent just 7.2 percent of the S&P 500, a list of the top 500 publicly traded companies. Just one billionaire in the data set had investments in renewable energy.
The report comes as world leaders are gathered in Egypt for annual United Nations climate talks, known as COP27, where super-rich people’s role in fueling climate destruction is seldom discussed, the authors say.
To end billionaires’ funding of climate devastation, the report says, governments need to step in, forcing major investors to make their “investment emissions” data public and imposing strict regulations on investors and corporations to force them to slash their carbon emissions.
Governments should also tax the super-wealthy and use the resulting funds to pay for climate action, the authors say. They estimate that a wealth tax on the world’s super-rich could raise $1.4 trillion a year globally, and suggest the funds specifically be used to help poor countries to pay for climate damages and transition to renewable energy, addressing a major issue emerging at COP27.
“When carbon-spewing activities go untaxed, we are, in effect, subsidizing the rich by letting them dirty our air and destabilize our climate,” James K. Boyce, senior fellow at the University of Massachusetts Amherst’s Political Economy Research Institute, who did not work on the new report, said. “Taxing away this subsidy is an idea whose time is coming — fast.”