The top 10 percent of U.S. earners are responsible 40 percent of the country’s emissions, according to a new analysis, the first to look at the climate impact of how Americans make money, including from investments.
If a worker earns a wage at a factory that generates carbon emissions, her income is linked, in some small measure, with those emissions. The same is true of someone who invests in the factory. But, while the wealthiest Americans earn far more of their money from investing, the climate impact of their investments is rarely considered.
For the new study, researchers analyzed data on emissions and income from 1990 to 2019. Accounting for earnings from investments, they found that not only are the top 10 percent of earners responsible for 40 percent of emissions, but the top 1 percent are responsible for at least 15 percent of emissions. The study, published in PLOS Climate, further found that white Americans have the biggest carbon footprint of any group, while Black Americans have the smallest, a reflection of the racial wealth gap.
The emissions disparity is more pronounced at the extreme end of the income spectrum, among the top one-tenth of 1 percent. “For example, 15 days of income for a top 0.1 percent household generates as much carbon pollution as a lifetime of income for a household in the bottom 10 percent,” Jared Starr, a researcher at the University of Massachusetts Amherst and lead author of the study, said in a statement.
“I think we need to make sure that our climate policies take these disparities into account,” Starr said. “I believe that an income- or asset-based carbon tax would focus the minds of corporate executives, board members, and large shareholders to decarbonize their industries in order to reduce their taxes.”