The top ten percent of the population by consumption causes environmental damage to biodiversity and the climate amounting to a figure comparable to what would be needed to solve these crises.
The top 10 percent of the world's population by consumption causes environmental damage worth up to $5.7 trillion per year: so says a new study conducted by researchers at the Oxford Martin School, the University of Oxford and Leiden University, published in Communications Sustainability.
More precisely, the estimate of environmental damage ranges from $1.7 to $5.7 trillion per year — more than the international community has committed to spending collectively on climate action and biodiversity conservation, and comparable to the funding that would be needed globally to address these crises.
The average annual cost of environmental damage per person belonging to the top 10 percent of the world's population by consumption ranges from $2,300 to $7,500. In the United States, where the per capita impact is greatest, the figure rises to $19,000–$63,000, equivalent to 6–20 percent of income. More than 60 percent of the world's wealthiest 10 percent live in the United States and the European Union. In the EU, 40–45 percent of the population falls within this highest consumption bracket, while in the United States the proportion exceeds half.
High-consuming households in emerging economies are, however, catching up. For instance, the average cost of environmental damage for the wealthiest 10 percent of the population in China has now surpassed that of the wealthiest 10 percent in Germany. The most destructive forms of consumption have been traced back to two main areas: food — particularly red meat, one of the leading drivers of deforestation — and energy, which includes flights, and the heating and cooling of homes and offices powered by fossil fuels.
Biodiversity loss is the primary factor contributing to the global cost of damage, accounting for 47–56 percent of the total, while climate change accounts for 36–45 percent. This suggests tackling the biodiversity and climate crises jointly, rather than treating them as separate policy challenges. "These damages represent real costs that are being borne somewhere," said Paul Behrens, one of the study's authors. "They are borne by ecosystems, by communities exposed to drought and pollution, and by people least able to protect themselves from a destabilised environment. At between $1.7 and $5.7 trillion per year, these are amounts comparable to the combined international financing gaps for climate and biodiversity, and almost certainly understate the true picture: we cover only direct consumption and four of the nine planetary boundaries."
The figures are likely underestimates because the analysis excludes five planetary boundaries and does not account for the impact of investments. A recent Greenpeace study estimated that the wealth held by the world's wealthiest one percent — often invested in high-greenhouse-gas-emission companies — is responsible for a quarter of global emissions and causes climate damage of nearly one trillion dollars per year.
The authors reflect on the potential revenues that could be generated by applying the "polluter pays" principle to the highest-consumption groups. The researchers note that environmental taxation focused on luxury consumption rather than essential goods tends to be more progressive and more effective in reducing emissions. They emphasise, however, that taxation is one tool among many and neither justifies nor compensates for the damage itself.
According to Behrens, the wealthiest ten percent often wield disproportionate decision-making power, not only as individual consumers but also as investors, employers, trendsetters and market influencers. And they have an even greater power to reduce emissions than their share of emissions alone would suggest. People belonging to the wealthiest ten percent should therefore be more "bold and determined" in securing a prosperous future.