Who’s responsible for the climate crisis?
If you were asked that question, what would you say? It may make sense to say ‘everyone’. We all have a part to play in minimising our carbon footprint. But in an unequal world, some are more responsible for the climate crisis than others.
Oxfam’s latest report ‘Carbon Billionaires: The investment emissions of the world’s richest people’ makes clear the role extreme inequality has in worsening our climate. At its core, our current climate emergency is defined by a vast carbon inequality. The super-rich own, invest in and profit from some of the world’s largest corporate actors and greatest polluters, while poor, low-income and low-polluting communities are bearing the brunt of floods, famine and rising sea levels right now.
Carbon inequality – wealthy polluters profit and people pay
Reviewing the wealth sources and investment portfolios of the richest people, according to the Bloomberg Billionaire list, we find that the investments of just 125 billionaires emit 393 million tonnes of CO2 each year –the equivalent of France –and a million times higher than someone in the economic bottom 90 percent of humanity. These numbers are also massively underestimated, as they rely on data companies publish themselves, which is often incomplete and not externally verified.
In this process 3 key Australian billionaires emerged; Andrew ‘Twiggy’ Forrest, former CEO and current non-executive chairman of Fortescue Metals Group, whose investments produced 816,820 tonnes of CO2, and Atlassian founders Scott Farquhar and Mike Cannon-Brookes, each of whom produced 470 tonnes and 4,576,650 tonnes of C02 respectively. Cannon-Brooks’ high emissions figure comes from his significant holding in AGL, an energy company.
Mike Cannon-Brookes is a unique exception among his billionaire peers in that he is one of very few using their wealth to fight climate change. His holding in AGL and his agitating within the company forced it to abandon its plans to demerge from its coal-focused generation business, which would have allowed it to continue operating coal power plants for another two decades.
Balance the scales
The ultra-wealthy are reporting record profits right now, while ordinary people watch their livelihoods go up in flames and get washed away. One Australian miner, Whitehaven Coal announced record earnings of $3 billion for the 2021-22 financial year, representing their ‘strongest ever full year result’ amidst climate-induced natural disasters, high inflation and an unprecedented cost of living crisis. Five leading oil companies – BP, Shell, ExxonMobil, Chevron and Total – made adjusted profits of nearly $100 billion, the same sum that rich nations promised and failed to deliver to poor nations to help deal with the climate crisis.
We need a wealth tax to tackle the disproportionate emissions of the very richest in our society. The Australian government must consider a windfall tax on the profits of fossil fuel companies, who are revelling on the back of surging profits. At a minimum, we need to push for reform of the current Petroleum Resource Rent Tax, and broaden its remit as a Minerals Resource Rent Tax, both to push down emissions and ensure Australians get their fair share of company profits made selling our resources.
Australia, along with other world governments also need stop giving out our money to polluting companies. Findings from the International Energy Agency and the OECD showed that world governments doled out an eye-watering $700 billion in public subsidies to fossil fuel companies in 2021. Australia played its role, with the previous Morrison government giving out AUD $10.5 billion to fossil fuel companies in the same year.
If government can do the right thing and claim this money, we can be more ambitious in how we tackle the climate crisis, making deep cuts in our emissions through systemic change and increasing our international climate finance in line with international agreements and the need of our Indo-Pacific neighbours.