Climate Inequality Report 2025

Context:

• Released 2025, co-authored by Lucas Chancel and Cornelia Mohren of the World Inequality Lab.
• Title: “Climate Change: A Capital Challenge – Why Climate Policy Must Tackle Ownership”.
• Focus: Relationship between wealth concentration, capital ownership, and greenhouse gas emissions.

Key Findings:

• Wealth vs Consumption Impact on Emissions:
  • Ownership-based emissions (linked to wealth/capital):
    • Top 1% globally → 41% of emissions.
    • Top 10% in US, Germany, France → 3–5× higher than consumption-based estimates.
  • Consumption-based emissions:
    • Top 1% globally → 15% of emissions.
    • Example (top 1%): France 3%, Germany 2%, US 6%.
  • Per-capita emissions:
    • Top 1% emits ~680× more than bottom 50% via ownership.
    • Via consumption approach → ~75× more.
• Climate Inequality and Wealth Concentration:
  • If wealthy individuals make and own all climate-related investments, top 1% wealth share could rise from 38.5% → 46% by 2050.
  • Wealth concentration and climate damage exacerbate both social and economic inequality.

Policy Recommendations:

• Carbon-Adjusted Wealth Tax:
  • Tax wealth based on carbon content of assets rather than consumption.
  • Progressive: discourages high-carbon investments, finances green transition.
  • Example: €150/tonne carbon tax → Revenue:
    • France: €36B, Germany: €74B, US: $534B.
• Ban on New Fossil Fuel Investments:
  • Restrict domestic dirty investments (exploration, extraction).
• Public Investment in Low-Carbon Infrastructure:
  • Shared public ownership (national, local, cooperative).
  • Boosts resilient energy systems and reduces inequality.
• Redirect Capital Flows:
  • Encourage shift from high-carbon to low-carbon assets via fiscal and regulatory measures.