When the rich fuel emissions

The affluent drive the climate crisis more through their wealth than through their consumption.

It is well known that the industrialised countries in the West are historically responsible for the global climate crisis. Developing countries such as India, therefore, emphasise that climate actions should be based on the principle of Common but Differentiated Responsibilities (CBDR).

This implies that while all countries share a common responsibility to address climate change, developed countries, which have historically contributed more to global greenhouse gas (GHG) emissions, have greater responsibility and capacity to act than developing countries, which lack the required technologies and resources. Sadly, some industrialised nations want to shirk their historical responsibility and insist that climate actions should be based on countries’ current share of GHG emissions.

However, what is not well known is that it is the wealthy people, both across and within nations, who are disproportionately aggravating the global climate crisis through their consumption and production activities. The Climate Inequality Report 2025, authored by Lucas Chancel and Cornelia Mohren of the Paris-based World Inequality Lab, shows that wealthy people are fuelling the global climate crisis.

The report indicates that wealthy people drive the climate crisis through their wealth even more than their consumption. While the top 1% accounts for 15% of global consumption-based GHG emissions, even more striking to note is that 41% of global GHG emissions are associated with private capital ownership. It further warns that climate change can aggravate global wealth inequalities as the share of the global wealth held by the global top 1% is likely to increase sharply from the current 38.5% to 46% by 2050 if wealthy individuals dominate future climate investments, such as low-carbon infrastructure.

In India, the top 1% of households — who control over 60% of national wealth — emit per capita emissions that are seven times higher than those of low-expenditure households, according to some studies.

Wealthy people’s consumption patterns contribute significantly to global GHG emissions in many ways, such as frequent travel by private jets, living in palatial bungalows, use of electronic devices, ownership of multiple cars, import and consumption of products and lavish weddings — all with a high carbon footprint. One report says that private jets emit 20 times more carbon emissions per passenger than commercial flights. The pre-wedding event of a top corporate owner in India is estimated to have emitted 35,000 metric tons of CO2-equivalent emissions through the use of private jets and a cruise ship.

To tackle the global climate crisis and its inherent inequalities, the report calls for three urgent actions. The first is a global ban on new fossil fuel investments. This, however, is easier said than done. Despite UN Secretary General António Guterres’s repeated calls at COP meetings and other fora urging countries to outline action plans for an accelerated phase-out of fossil fuels, a coalition of countries and vested interests is totally opposed to it. Global Energy Monitor reports indicate that 200 expanded or new oil and gas projects and 850 coal mines are under development or have received approval, mostly funded by institutional investors and wealthy individuals based in the Global North. 

Developing countries like India, that are heavily dependent on fossil fuels to sustain and accelerate economic growth, can’t place any restrictions on their use in the near future. However, there is a silver lining: a recent report shows that the growth of global renewable energy outpaced that of fossil fuels in 2024. 

The second recommendation is to levy a tax on capital investments based on their carbon content. While consumers increasingly face carbon price signals, financial investors often don’t face such taxes. Such a tax could help redirect capital flows from high-carbon assets in the absence of an outright ban on carbon-intensive investments.

Although the European Union (EU) hasn’t imposed a carbon tax on capital investments, its Carbon Border Adjustment Mechanism (CBAM) places a levy on carbon-intensive imported goods, and its EU Emission Trading Scheme (ETS) requires EU companies to pay for their own carbon emissions. These policies create costs that indirectly influence capital investments by incentivising companies to adopt greener technologies and production methods. 

The third recommendation is to scale up public investment in low-carbon infrastructure such as solar and wind energy, ensuring fair access for low- and middle-income groups. This is to prevent further wealth concentration and worsening inequalities.

Climate policies cannot be addressed in isolation from growing wealth inequalities. The costs of climate inaction are disproportionately borne by poorer nations and households. By 2050, the poorest 50% of the global population is projected to bear around 74% of relative income losses, while the top 10% will face only about 3% income losses. The wealthy must therefore play a greater role in enabling a just transition to a low-carbon economy.

(The writer is Lead Author, GEO-7, United Nations Environment Programme, Nairobi)