A recent report highlights alarming trends in global wealth inequality and its profound implications for climate change. Yet the results reveal a dramatic divide in carbon pollution. The bottom half of humanity have just 3% connected to how private capital is owned, with the top decile of income earners responsible for a shocking 77%. Wealth continues to accumulate among a tiny percentage of people. The report makes clear that to address the growing economic divide and achieve a just and sustainable future, we need systemic reforms.
This three-part analysis based on data from the Global Inequality Lab uncovers wealth concentration at the very top of the global population. Their share has increased from almost 4% in 1995 to more than 6% today, underscoring their incredible fiscal might. Yet this elite group of luminaries includes fewer than 60,000 Americans. They control over 3x more wealth than the whole bottom 50% of humanity, which collectively owns just 2% of global wealth.
Economic data shows that multimillionaires’ wealth has increased by around 8% per year since the early 1990s. The bottom half of the global population only receives under 10 percent of all global income. The top 10% of income earners now earn more than the other 90% combined, solidifying their position as the primary beneficiaries of economic growth.
“Wealthy individuals fuel the climate crisis through their investments even more than their consumption and lifestyles,” stated the report authors. This observation, made in the context of recent environmental tragedies, underscores how often economic inequality and environmental degradation intersect at critical junctures.
Women encounter further hurdles in this realm of inequity. On average, women are paid just 61 cents for every dollar paid to men per hour worked, not counting unpaid labor in the home. When taking unpaid labor into account, women’s earnings fall to a mere 32%. This gendered disparity further widens the racial and socioeconomic wealth gaps as well, underscoring the need for leveraged, intentional policy to drive equitable economic participation.
“The result is a world in which a tiny minority commands unprecedented financial power, while billions remain excluded from even basic economic stability,” commented Ricardo Gómez-Carrera. This quote sums up the deep seriousness of the reality we face as our wealth divide deepens at lightning speed all around the world.
The report highlights how wealth inequality is even starker than income inequality. The richest 10% of the world’s population controls an astonishing 75% of total wealth, while the bottom half struggles to make ends meet. These disparities raise legitimate fears for the future sustainability of our existing economic structures. Can they really pave the way for more democratic governance and greater societal cohesion?
And as the distinguished economist Joseph Stiglitz made clear, that can lead to a far greater problem. He explained that low-income populations, who are least responsible for emissions, are most susceptible to climate shocks. Ironically, those who emit the most are more insulated against the impacts of climate change. This inequity illustrates the heartbreaking ethical dilemma we are experiencing with climate progress versus fiscal prudence. Disadvantageous inequities have arisen in which those who least contribute to environmental degradation pay the highest cost for it.
Given these findings, the report calls for a radical shift in policy approach, urging policymakers to phase out harmful gold standard policies. A proposed global tax of just 3% on less than 100,000 centimillionaires and billionaires could generate around $750 billion annually. This new tax could supercharge their global funding ambitions. Such revenue could be directed towards initiatives aimed at alleviating poverty and combating climate change, thereby addressing two critical issues simultaneously.
“The tools exist. The challenge is political will,” stated the report authors. Their call to action makes clear that fairness is only the starting point. This is vital for our efforts to create resilient economies, inclusive stable democracies, and approach the carrying capacity of our shared planet.