The investments of just 125 billionaires emit 393 million tonnes of CO2e each year – the equivalent of the annual carbon emissions of France or nearly 10 times those of Scotland.
According to a report published by Oxfam today, a billionaire’s average annual emissions is a million times higher than someone outside the richest 10 per cent of humanity.
The report, Carbon Billionaires: The investment emissions of World’s richest people, analyses the investments of 125 of the richest billionaires in some of the world’s biggest corporates and the carbon emissions of these investments.
The report finds that these billionaires’ investments – with a collective $2.4 trillion stake in 183 companies – give an annual average of 3m tonnes of CO2e per person, which is a million times higher than the average 2.76 tonnes of CO2e for those living in the bottom 90 per cent.
The actual figure is likely to be higher still, as published carbon emissions by corporates have been shown to systematically underestimate the true level of carbon impact, and billionaires and corporates who do not publicly reveal their emissions – so could not be included in the research – are likely to be those with a high climate impact.
Jamie Livingstone, the Head of Oxfam Scotland, said: “If we are to avoid climate breakdown, we need COP27 to expose and change the role that big corporates and their rich investors are playing in profiting from the pollution that is driving the global climate crisis. After all, it is people in low income countries who’ve done the least to cause it who are suffering the most – as we are seeing with the devastating drought in East Africa and the catastrophic floods in Pakistan.
“We need governments at all levels to use every tool they have to tackle this, which includes ensuring emission figures for the richest people are published, regulating investors and corporates to slash carbon emissions, and taxing wealth and polluting investments. Big corporates and the super-rich can’t be allowed to hide or greenwash.
“Right now, the role of the super-rich in super-charging climate change is rarely discussed. This has to change. These billionaire investors at the top of the corporate pyramid have huge responsibility for driving climate breakdown. They have escaped accountability for too long.”
Studies show the world’s wealthiest individuals’ investments account for up to 70 per cent of their emissions. Oxfam used public data to calculate the investment emissions of billionaires with a stake of more than 10 per cent in a corporation, by allocating them a share of the reported emissions of the corporates in which they are invested in proportion to their stake.
The study also found billionaires had an average of 14 per cent of their investments in polluting industries such as non-renewable energy and materials like cement. Only one billionaire in the sample had investments in a renewable energy company.
The choice of investments billionaires make is shaping the future of our economy, for example, by backing high carbon infrastructure – locking in high emissions for decades to come. The study found that if the billionaires in the sample moved their investments to a fund with stronger environmental and social standards, it could reduce the intensity of their emissions by up to four times.
Oxfam has estimated in recent research that a wealth tax on the worlds’ super rich could raise $1.4 trillion a year, generating vital resources that could help developing countries – those worst hit by the climate crisis – to adapt, address loss and damage and carry out a just transition to renewable energy. According to the UNEP adaptation costs for developing countries could rise to $300 billion per year by 2030. Africa alone will require $600 billion between 2020 to 2030. Oxfam is also calling for steeply higher tax rates for investments in polluting industries to deter such investments.
Ahead of the deliberations at COP27, Oxfam is calling for:
- Governments to put in place regulations and policies that compel corporations to track and report on scope 1, scope 2 and scope 3 GHG emissions, and set science-based climate targets with a clear road map to reducing emissions.
- Governments to implement a wealth tax on the richest people and an additional steep rate top-up on wealth invested in polluting industries. As well as drastically reducing emissions, this will raise billions that can be used to help countries cope with the brutal impacts of climate breakdown and the loss and damage they incur, while funding the global shift to renewable energy.
- Corporations to put in place ambitious and time-bound climate change action plans with short-to-medium term targets in line with global climate change objectives with a view to reach carbon neutrality by 2050.
In the UK, company law and Corporation Tax rates are reserved to the UK Parliament, along with powers over Inheritance Tax and Capital Gains Tax. Westminster also has the power to create a new wealth tax.
However, there are also important measures the Scottish Government can take to contribute to the global change needed and to make polluters pay for the damage they cause. This could help drive behaviour change to reduce emissions, and – amid public finance pressure – raise new money for climate action.
Recent research for Stop Climate Chaos Scotland, co-funded by Oxfam Scotland, examines how fiscal measures – including to better tax wealth – could be used to help deliver Scotland’s climate ambitions, including cutting Scotland’s emissions and funding its contribution to international climate justice.
The report says a locally-administered and spent Wealth Tax on land and/or property is within the Scottish Government’s powers. It notes that significant wealth in Scotland is locked away in land and property and says the Scottish Government should set up a rapid and time-limited, independent commission to look at the options for replacing the Council Tax and other local taxes with a land, property and/or local wealth tax.
The report also highlights the option of a Carbon Emissions Land Tax to tax emissions created through land use and penalise landowners who fail to prevent their land from emitting more carbon than it captures.
Oxfam believes that governments should properly track and report emissions within countries in ways which capture the distribution of emissions across different sections of society, as well as full carbon footprints, including consumption-based emissions, not just territorial emissions.
Positively, the Scottish Government publishes data on territorial emissions and those emissions associated with the spending of Scottish residents on goods and services, wherever in the world these arise. However, it currently does not publish emissions data according to different income or wealth levels.
Jamie Livingstone added: “Globally, as well as at UK level and in Scotland, we must recognise, track and work to reduce the deep inequalities at the heart of the climate crisis to drive down emissions, while also boosting support for those suffering from a crisis caused, and deepened, by those with the most.”
For more information or interviews please contact:
Natalie Terry, Oxfam Scotland; firstname.lastname@example.org / 07906139293
Spokespeople are also available at COP27 in Egypt during the summit.