Even if everyone had at least enough wealth to live well, we would still have an existential threat on our hands if the rich continued to control large amounts of financial wealth.
Opinion: There is a clear moral and social justice case for taxing the rich. Max Rashbrooke, and others, have done a thorough and admirable job of outlining why wealth inequality is unfair, self-perpetuating and destructive of the social fabric essential for a well-functioning society.
There is another case for taxing the rich and reducing inequality that is often missed – the ecological perspective. Even if everyone had at least enough wealth to live well, we would still have an existential threat on our hands if the rich continued to control large amounts of financial wealth.
What is the relationship between being rich and our ecological crises?
To appreciate the connection between financial wealth and ecological impacts we need to be reminded that money is a claim on material resources; we want money to buy things we need or desire. All of these things, whether food to feed ourselves, or a sporty vehicle to feel good about ourselves, involve the use of energy and natural resources. The types and amount of energy and resources we use are real material things, which in their extraction, manufacture, use and disposal, all have an impact on the environment.
Since more than 85 percent of our global energy use involves fossil fuels, the more energy we use the more greenhouse gases we emit, leading to global heating. And the more natural resources we use to make the things we need or desire, the more disruption of natural ecosystems we create, contributing to biodiversity loss and a host of other ecological problems, such as pandemics. And then there is the enormous amounts of waste we throw back into the environment, causing yet more disruptions to the complex web of life in the water, soil and air we breathe.
While these material resources are real, money is a concept. Because money (an infinite concept) is a claim on resources (finite materials), there is a basic disconnect between the two in biophysical terms. There can be more money available than there are resources to make claims on. When this happens inflation occurs and the price of everything increases. As natural resources become increasingly scarce, only the very rich will be able to afford things. We are seeing that happen now and this dynamic can only accelerate as we continue depleting both renewable and non-renewable resources.
The concept of ecological overshoot is relevant here. This is defined as the use of natural resources at a rate beyond nature’s capacity to replace them, or the emission of wastes into the environment beyond nature’s capacity to safely absorb them. We obviously need natural resources to live well; every species has an exchange with the natural world by which it derives sustenance and recycles waste. If any species expands to the extent natural systems can no longer provide what it needs to survive, or its wastes poison the environment it depends on, then that species will decline until it comes back into balance with the natural systems that sustain it. Or it goes extinct.
Humanity is now in serious ecological overshoot. We are consuming and polluting far too much to sustain ourselves at this level of consumption. And the richest 10 percent of us are by far doing most of the consuming and polluting beyond sustainable levels (greenhouse gas emissions are a good proxy for total consumption).
Let’s consider what “being rich” means in this context. We tend to assess our wealth status with respect to our neighbours; we're likely to regard only those that have more than us as “rich.” But our ecological crises are global and we need to take a global perspective. For example, we know that 50 percent of climate heating greenhouse gas emissions globally are produced by the wealthiest 10 percent of the global population – that’s roughly 800 million people. When we see the term "wealthiest 10 percent of the global population” we tend to think of the billionaires and multimillionaires, with their super yachts and multiple dwellings scattered across the globe.
The reality is a bit different. Many people reading this article are likely in the wealthiest 10 percent globally, and all are almost certainly in the top 30 percent globally, accounting for almost 80 percent of all emissions (and consumption in general). The threshold for the top 10 percent is a net worth of about $200,000 NZD, which many of us will have tied up in our homes and savings plans. We’re “rich” by global standards – and that's what counts from an ecological perspective.
Collectively, the wealthiest 10 percent globally may be responsible for half of greenhouse gas emissions, but this exclusive club is extremely diverse in terms of wealth. If you have a net worth of $200,000 you’re a member, but so is someone with $200 billion. While the multimillionaires and billionaires are relatively few in number (only a few tens of thousands of the approximately 800 million wealthiest 10 percent of the global population), their wealth allows them to generate a disproportionate amount of greenhouse gases. Their wealth also allows them to engage in considerably more ecological destruction; they consume more in terms of goods and services, and their investments are designed to generate more wealth which causes even more ecological destruction. And they create more waste in the process.
But the majority of the wealthiest 10 percent are not in this ultra-high net worth group. About 800 million of us are in this still very elite group globally, and collectively we are responsible for the majority of greenhouse gases, and other ecological damages. Individually, our consumption and wastes may not be a difficulty, but collectively we are doing serious damage to the natural systems that support us. And we do it not out of malice or greed, but simply by taking for granted what marketers have convinced us is a desirable lifestyle.
Another way of looking at this global picture is to appreciate that the majority of people, close to 5 billion (the poorest 60 percent), are already living sustainably, many not always comfortably. And the very poorest are living miserably and barely surviving. Fewer than a billion of us are major contributors to ecological overshoot.
Let’s be clear. Ecological overshoot is a terminal condition; the longer it continues the more destruction we do to the web of life. There is no way that the entire global population can achieve the standard of living currently enjoyed by the wealthiest 10 percent (who currently include hundreds of millions of people in developing countries that have achieved “middle class” standards of living).
The magnitude of change needed to bring our collective consumption within planetary boundaries is staggering. We need to reduce our collective consumption and pollution by more than 50 percent to reduce and eliminate the ecological overshoot trajectory we are currently on. It is the magnitude of change required that should be our alarm bell that the technical proposals involving increased efficiencies and so called “renewable” energy technologies will not be nearly enough.
This is why the idea of continued financial wealth creation is such a flawed concept at this point in human history. We cannot spend or invest our way out of the ecological overshoot (or climate) dead end we have created. What is needed is a reduction of financial claims on resources so that more resources are left for nature to regenerate.
The financial wealth the very rich among us have accumulated cannot be used to make more claims on more natural resources transformed into luxury items without making matters worse. The rich cannot use their wealth to enjoy luxuries that go beyond meeting actual needs without further destruction of nature; their excess wealth is “zombie wealth.” This is the ecological case for putting a cap on financial wealth, even if inequality was minimised.
If any of the existing financial wealth of the very rich is to be used at all, its most productive use would be to assist the poor who may be living sustainably, but who would benefit enormously from being able to meet their needs more easily and securely, especially the poorest of the poor. Investments in voluntary population reduction programs (educating young women and easily available contraception) would be major contributions. If we can’t make the pie any bigger, then we each get a larger slice the fewer of us there are.
There are a variety of policy options available to support wealth redistribution: various forms of wealth taxes (which can be progressive so that higher rates apply to higher levels of wealth), and establishing maximum income levels (if financial wealth accumulation is no longer a viable ecological option then what’s the point of always earning more?). Debt jubilees are another option, especially for poor nations who have been sucked into foreign loans which contribute little to the common good of their citizens, and who are essentially debt slaves to richer nations.
Many of these ideas may be anathema to the sanctity of individual property rights. This is clearly a difficult political problem to address, but so be it. Collective rights to survival are a higher priority.
Both the moral and ecological arguments for redistributing financial wealth are connected. Without ecological security there can be no social justice on a finite planet, and without social justice there can be no ecological security on an over populated one.
