Earth4All

The high-polluting rich aren’t happier – and they are costing everyone else a good life

Dr Lewis Akenji, member of the Earth4All Transformational Economics Commission, Executive Director of Hot or Cool Institute and member of the Club of Rome

Global climate change, and the resulting ecosystem collapses, social tensions, and pandemics that follow, poses an existential threat to the kind of prosperous, modern society enjoyed by millions in rich countries. Life will meanwhile become even more difficult for the billions whose lives are defined by extreme precarity—to say nothing of the 1.1 billion people currently enduring severe poverty. The greatest challenge facing humanity in the 21st century is to ensure decent lives for everyone without violating our planet’s ecological boundaries.

Making progress towards that goal will require models of a better world. That is why the Hot or Cool Institute recently updated its Happy Planet Index (HPI), a long-running metric that combines data on countries’ health, happiness, and environmental impact to understand their progress towards achieving sustainable well-being.

This year’s report breaks down HPI scores within several countries into income groups. The results are both clear and shocking: in most countries, the top 10% of earners are responsible for around a third of emissions, yet their well-being and health gains are minuscule compared to the environmental damage they cause. As a result, in most countries, it is the top 10% that has the lowest HPI score, meaning that this group is the least efficient at converting carbon into health and wellbeing.

The HPI finds that countries with high levels of inequality, like China and the United States, do a poor job of converting their emissions into health (measured with life expectancy) and happiness (based on a question in the Gallup World Poll) for the general population. Using this methodology, the healthiest countries in the most recent edition are Hong Kong, Japan, Australia, Switzerland, and Malta, while the countries with the highest wellbeing include usual suspects like the Nordics along with potentially lesser-known nations like Vanuatu.

But even countries like Costa Rica, a perennial leader in the HPI who placed fourth in the most recent rankings, have systems of wasteful consumption stemming from high inequality.

The top 20% of Costa Rican earners emit over five times more CO2 than the rest of the population. Yet, their life expectancy and reported happiness are only marginally higher than those emitting within global ecological boundaries.As in most other high and middle-income countries for which we have data, the excessive consumption of high-income groups isn’t translating into a better life, just a bigger environmental footprint.

Flying

There are several factors contributing to high levels of carbon inequality. One is air travel, a major source of emissions for the wealthy and one of the most unequally distributed consumption categories. In the EU, the top 10% of the population emits a staggering 3 tons of CO2 per capita from flights alone — 30 times more than the average flight-related emissions for everyone else.

Their emissions, however, are dwarfed by the 22.6 tonnes per capita emitted by the top 1% of earners. But all this extra travel doesn’t translate to a happier life. The HPI shows that these frequent flyers in the top 10% don’t see a significant increase in well-being compared to those who fly less.

Housing

The same goes for housing. In the United States, wealthier homes have energy footprints roughly 25% higher than those of lower-income residents. However, our index shows this does not translate to a proportional increase in life satisfaction or longevity. In 2021, the most recent year for which we have data, the top income decile of Americans emitted 68.7 tonnes of CO2 per capita compared to the ninth decile’s already-high 30.2 tonnes. However, that exceptional strain on the biosphere produced the same life satisfaction score (7.4) and only 1.5 additional years of life expectancy.

Investments

The report also sheds light on a hidden source of emissions for the ultra-rich, and one uniquely the result of high inequality: investments. The report reveals that roughly 70% of footprint of the top 1% footprint comes from their investments, not personal consumption.

A recent widely-shared study by Oxfam found that just 125 billionaires emit as much carbon through the companies they invest in as the entire population of France. Perhaps even worse, billionaires’ portfolios are dirtier than the market as a whole.Fossil fuel capitalism continues to pay well. This concentration of extreme wealth not only undermines democracy and social stability, it is also an existential threat to the biosphere.

A Fairer Future

Focusing on the individual consumer or investment decisions of wealthy individuals is important, but it can also lose sight of the bigger picture. The wealth created by exploiting Earth’s resources is mediated by institutions like taxes, healthcare systems, financial regulations, and labour laws before being converted into a society’s health and happiness.

That is why, at its heart, the HPI is about efficiency, the ability of a country to extract social value from its ecological impact. The HPI demonstrates that the wealthy’s outsized emissions are not simply individual moral failures, but rather a sign of socially and ecologically inefficient resource allocation. And this inefficiency is something the rest of the planet can ill afford.

What are your thoughts on this? React and engage via Twitter @Earth4All_ or submit a blog post for consideration to pbaumgartner@clubofrome.org 

This article gives the views of the author(s), and not the position of Earth4All or its supporting organisations. 

The high-polluting rich aren’t happier – and they are costing everyone else a good life

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