The Wealthy Contribute More to Climate Change
Passing a luxury tax might be the best way to get the rich to curb their carbon emissions.
Kylie Jenner Was a Bad Billionaire
On July 12th, Kylie Jenner posted an image on Instagram of herself and her boyfriend Travis Scott hugging one another on an aiport runway. In between them were two private jets. The caption read “You wanna take mine or yours?”
After the photo was taken she and her boyfriend hopped onboard one of the planes and flew from Van Nuys, Ca. to Camarillo, Ca. The trip took 17 minutes. By car, the distance was about 39 miles and with traffic would have taken roughly 45 minutes. To save themselves 28 minutes she and her boyfriend emitted 1 ton of CO2, about a quarter of what the average person emits in an entire year.
The post sparked outrage on Social Media, and fans accused the couple of being out of touch with what’s going on with the climate crisis. But was this just a case of a billionaire brat behaving badly, or do other rich people act like this?
According to the Celebrity Jets Twitter Account, which tracks the private flights of celebrities everyone from big sister Kim, to boxer, Floyd Mayweather, actor Mark Wahlberg and golfer Jack Nicklaus have been guilty of recently taking private flights that lasted 40 minutes or less.
Why Private Planes Are So Bad
Aviation enthusiasts are quick to point out that flying only emits about 3.5% of the world’s CO2 and that private flights make up only 4% of that. However, that’s just because so few people in the world fly. According to the CEO of Boeing, more than 80% of people in the world have never been on a plane and according to a study published in Global Environmental Change just 1% of the global population is responsible for half of the emissions associated with flying.
Because they carry so few people private planes are 5–14 times more polluting (per passenger) than commercial planes are and 50 times more polluting than a train ride.
The Carbon Footprint of the Rich
But it gets worse. A study of 20 famous billionaires revealed that their average footprint came in at a whopping 8,190 tons per year, mostly because of their yachts and private planes. Compare that to the average American who emits 14.4 tons and the average world citizen who emits 4.2 tons.
Yachts and jets are by far the biggest emitters of luxury items that the wealthy own. For example, a superyacht with a crew, helicopter pad, and a submarine emit about 7,020 tons of CO2 per year, while on average a Boeing 747 will emit 6,500 tons.
But it’s not only their enormous ecological and carbon footprint that’s the problem, it’s the aspirations that the extremely wealthy generate in others. There are lots of people who want to emulate the consumption habits of the super-rich fueled by their extravagant displays of wealth.
But you don’t have to be a billionaire to have high emissions. In North America, the top 10% of earners produce nearly 73 tons of carbon dioxide per person annually. In Europe and East Asia, they release 29 tons and 39 tons, respectively. However, the bottom 50% of North Americans emit just 10 tons per person per year. In Europe and East Asia, they emit 5 tons and 3 tons, respectively.
This pattern is the same all across the world. According to a 2020 study from the University of Leeds, the wealthiest 10% of the 86 countries they studied consume, on average, 20 times more energy than the bottom tenth. This gap mostly comes from transportation, where the wealthy consume 187 times more fuel than the poor. This is because people with lower incomes rarely fly or drive a car. The researchers found that the richer you are, the more energy you consume, and this was true across all countries studied.
While this is probably self-evident, it’s the size of the chasm that is surprising. For example, a 2014 survey by the Department of Transportation in the UK showed that just 15% of UK travelers take 70% of all flights. Similarly, the Leeds study found that the richest 10% used more than half of the energy for transportation.
A 2020 study by the United Nations Environment Program (UNEP) said that just 10% of the world’s population emits close to half of the world’s greenhouse gases, while the top 1% account (those earning more than $172,000 per year) for 15% of emissions, more than twice the bottom 50%. That means that the top 70 million people emit more than the bottom 3.5 billion. The study concludes that if we are to stave off climate change, the top 1% need to cut their emissions by 97%.
A 2021 report on carbon emissions and wealth inequality from Oxfam came to two conclusions. The first is that:
“…it is time for governments to raise major taxes on or to outright ban highly carbon-intensive luxury consumption, from SUVs to mega yachts, private jets and space tourism, that represent a morally unjustified depletion of the world’s scarce remaining carbon budget.
The second is that:
“… coordinated and substantial taxation of wealth is urgently required to reduce inequality and at the same time curb the emissions of the richest. It is time to use regulation and taxation to end extreme wealth altogether, to protect people and the planet.”
Tax the Wealthy
Even some of the wealthy agree that they should be taxed more. In 2019 twenty of the wealthiest Americans signed an open letter urging the next president to increase taxes on the rich to combat climate change and fund universal health care. The letter read,
“America has a moral, ethical and economic responsibility to tax our wealth more,”
The letter was signed by the likes of hedge fund titan George Soros, Nick Hanauer, an early investor in Amazon, and Abigail Disney, the heiress to the Walt Disney fortune, among others.
During her presidential bid, Senator Elizabeth Warren championed a wealth tax that later became the bill named the Ultra Millionaire Tax Act of 2021. In it, she calls for an additional 2 percent tax on wealth over $50 million and a 3 percent tax on wealth over $1 billion. This would apply to the top 0.05 percent of U.S. households, or about 100,000 households, and could raise about $3 trillion over the next decade.
A Luxury Tax
Others have suggested that in addition to a higher marginal tax there should also be a luxury tax on expensive cars, boats, and planes. One was implemented in 1991 and it levied a 10% tax on cars valued above $30,000, boats above $100,000, jewelry and furs above $10,000 and private planes above $250,000. However, it was repealed just two years later, because it led to a loss of jobs in the yachting industry as fewer luxury boats were being purchased. In other words, it worked by effectively limiting the wasteful emissions of the wealthy by keeping them from buying yachts and other luxury items, to begin with.
A mere 10% tax was enough to “cost billions” in sales and led to the loss of “tens of thousands of jobs,” according to a power boat dealer named Bob Hummel who lived through the tax.
Yes, heavy taxation of the yacht and plane industries would lead to the loss of tens of thousands of jobs. But the money raised from these taxes could go into retraining programs and invested in new technology to make these luxury items more sustainable.
So, what if the tax were raised to 25%, 50%, or even 100% on luxury yachts, and private planes, the two biggest emitters from the toy chest of the wealthy? Yes, it could mean the end of the luxury yacht industry, and some wealthy might be relegated to flying first-class, but is having expensive toys and greater convenience for the rich worth the expense of a warming planet for the rest of us?
This type of luxury tax isn’t unprecedented. For example, the small island nation of Singapore has one of the highest population densities in the world. Because of this the government heavily taxes private car ownership, which can cost four to six times what a comparable vehicle in the United States or Australia would cost.
This discourages the average person from buying a car and forces them instead to take public transportation, which is paid for by the car and road taxes. It also prevents the traffic and pollution that would arise from everyone owning private vehicles from becoming untenable. The results are that Singapore has one of the best public transportation systems and some of the best-maintained roads in the world, and while it has some traffic and pollution it is nowhere near the levels of nearby Jakarta, or Bangkok.
Canada has also recently voted on a luxury tax that is coming into effect on September 1, 2022. The new levy targets vehicles and aircraft priced above CA$100,000 ($77,700) and certain boats above CA$250,000 ($194,250). It will be calculated at 10% of the full retail value of the vehicle, aircraft, or vessel, or 20% of the value above the threshold.
The wealthy already lead such privileged lives. Do we want to allow billionaire brats like Kylie Jenner to continue to get away with killing our planet so that they can shave a few minutes off their travel time?
Call your Congressional Representative and tell them that we need a luxury tax like the one Canada just passed.
