The carbon content of billionaire wealth: composition, concentration and taxation

Abstract

Abstract How large are billionaires' carbon footprints? While increasing evidence highlights large disparities in emissions between and within countries, detailed individual‐level data on emissions portfolios remain scarce. In this paper, we analyse the wealth composition of the top 500 billionaires and construct a dataset linking each of their assets to emissions. According to our ownership‐based emission accounting framework, every million US dollars held by billionaires is associated with more than 65 tonnes of equivalent per year – about 10 times the annual carbon footprint of the average person. Further, our estimates reveal an extreme concentration of wealth among the super‐rich and even greater concentration of emissions. About 50 billionaires account for around three‐quarters of total emissions in our sample, with publicly traded equity in Basic Materials, Industrials and Utilities accounting for a disproportionate share of attributed emissions. Emission intensity is key: 97 per cent of the variance in log emissions is explained by intensity differences, suggesting that scale effects play a limited role and carbon footprints are almost entirely driven by investment choices. The highest‐emitting billionaires – including some of the wealthiest – derive a substantial share of their emissions (between 44 and 66 per cent) from hard‐to‐abate sectors. Comparing alternative taxation schemes targeting both extreme wealth and emissions, we show that the introduction of a new progressive carbon wealth tax can potentially achieve three objectives: progressively taxing billionaires to curb inequality, targeting the most polluting activities, and raising substantial resources to finance a sustainable and equitable transition.