Global Inequality in the Time of Climate Emergency

 

For a much better graphic (but fewer words) see the version at www.inequality.org

 

 

                 Percentage of Global Income, by Decile

Something has changed.  I’ve been asking people in the climate movement what they think it is, and most everyone agrees.  When did it happen?  After the Paris Agreement, definitely.  But also after Brexit, and after Trump’s election, which put “the emergency” on the map for all to see.  There are lots of data points. In late 2017, David Wallace-Well’s piece in New York Magazine, The Uninhabitable Earth, landed like a bomb.  In mid-2018 came the Deep Adaptation paper, which likewise was downloaded by the hundreds of thousands.  In October of 2018, there came the IPCC’s Special Report on 1.5°C, and afterwards the air was crisper, the view clearer.  It was obvious that climate denialism, or at least classic climate denialism, had lost its legitimacy.  Denialism was just a right-wing scam, and everyone knew it.  And, of course, there were the storms, and the firestorms, and then the Green New Deal resolution, which was a watershed by any reckoning.  To top it all off, there came the Extinction Rebellion, and its unforgettable new exhortations, protest signs that simply said “Tell the Truth!”

So something has changed.  But what’s at stake, exactly, and what comes next?  Wen Stephenson beat me to this (in a fine piece in The Nation) but I’ve reached exactly the same conclusion.  If we had to choose one voice, one single slogan, to represent the pivot that we’re now passing though, it would be hard to beat Czech playwright and ex-president Vaclav Havel and his notion of “living in truth.” [1]  It’s an option more people are exercising, people who are sick of the lies.  Even the comforting lies.

So where are we?  Three points are key.

First, despair is looming, and for good reason.  Take a look at Trajectories of the Earth System in the Anthropocene, the so-called “Hothouse Earth” paper, or at least know its bottom line, that the “tipping points” are actually “tipping cascades,” and that these cascades, if they really get moving, will amplify each other in ways that are all but impossible to stop.  Such that, by the time we arrive at 2°C, if indeed we do, we’ll probably overshoot it, and then face a real risk of runaway feedbacks.

Second, we have the technology, and the money, to save ourselves.  This isn’t the place to talk about tech in detail, but take a look at the ongoing work of Project Drawdown, and skim Carbon Tracker’s 2020 Vision report.  Then say something encouraging, something like “superconducting windmill generators and utility-scale flow batteries.”  As for the money, suffice it to say that “we” have plenty of it, which is to say plenty of financial and institutional capacity, but that it’s the wrong hands, and lots of it is locked into tax havens as well.

Third, we have to prepare for the possibility of a proper awakening.  Certainly it’s reasonable to hope that the more people understand the depth of the danger—the Earth will be fine, but many species will not make it, and our civilization may not either—the greater will grow their frustration and, better, their anger.  And along with these their willingness to contemplate “unrealistic” actions and transformations that are actually scaled to the danger.  Because, bottom line, large-scale transformations are actually possible.

A transition story we actually believe

My own view is that, if we’re to “live in truth,” we had best go all the way.  Because, as things stand, we’re in a pretty awkward spot.  We know how much trouble we’re in, but we don’t know what we’re going to do about it.  More precisely, we don’t have a strategy, or even a transition story—a positive, attractive transition story—that we actually believe in, in the sense of believing it could actually meet the challenge.  It is clear to me, as I will explain, that such a positive, attractive, and above all believable transition story can only be composed if and when we face the justice side of the climate challenge, which has to include international justice.  The climate crisis is inherently and irreducibly global, and our response must be the same.

We need at least two things to save ourselves and our civilization.  The green technology revolution is the first of these, and thankfully it’s now arriving in force.  But we also need sustained and visionary planetary-scale cooperation, and such cooperation is only possible if the climate mobilization simultaneously mitigates today’s level of extreme economic inequality.  Economic justice has to be part of our core story, though we’re still stumbling to talk about domestic economic justice in a crisp and believable way, and have barely a clue about how to do so at the international level.  Not, at least, in a way that makes sense given the emergency timeline we’re now on.

“Living in truth” is not in itself a transition strategy.  It’s just a beginning.

The Twice Divided World

Inequality is fundamental to the climate challenge.  Thus it must be understood that inequality is not just a problem of poverty, but even more fundamentally a problem of wealth, and this globally as well as within countries.  Clarifying this is one of the goals of the Climate Equity Reference Project (disclosure: I am a CERP co-director) and I’m going to take the liberty here to crib from some work we’ve done on this front.  In particular, I’m going to pull a few charts we ginned up to support the Civil Society Equity Review Coalition, which has long been evaluating the fairness—and unfairness—of the national pledges of action being tabled under the Paris Agreement.

Consider the“champagne glass” figure above, which represents the income distribution of humanity as a whole.[2]  This is a stacked figure built of ten deciles, each of which represents the income of one tenth of the human population, and the first thing to notice about it is that, since it is drawn to be reasonably accurate, it doesn’t look like any champagne glass you’d actually want to put to your lips.  This is because the richest 10% of the human population (the dark green decile) receives 52% of all global income, and when you get closer to the very top, to the richest one percent, and then to the richest one hundredth of one percent, and then to the richest one hundredth of that one hundredth, the people which inequality scholar Branko Milanovic identifies at the true wealthy elite[3], it defines a very sharp edge indeed.

The income disparities here are obscene, and they manifest across the entire global income distribution, from the top to the bottom of the glass.  At the top, as already noted, the richest ten percent of the global population receives more than half of all global income.  In contrast, the poorest half of the world’s people (the five lowest population deciles, which define the stem of the glass, receive less than one-tenth of the total global income.  This is an amazingly radical stratification, and cannot be justified by any even remotely defensible theory of justice.

But step back a second.  Why, in a discussion of climate crisis, am I talking about income distribution?  The first reason is that greenhouse gas emissions, whether calculated for individuals, nations, or income groups (let’s just call them classes) are highly correlated with income.[4]  If anything, the size of individual carbon footprints are even more obscenely distributed than is income.  The second reason is that today’s extreme level of income stratification—and even more fundamentally wealth stratification—has become a global existential danger.  In fact, the deepest truth of our unlucky time may simply be that extreme economic inequality is a social poison that makes it almost impossible for us to mobilize to save ourselves and our civilization.

Note that, as per the figure above, the wealthiest people live starkly different lives from the poor, many of whom (still) survive on less than $2 per day and in so doing generate an almost negligible amount of greenhouse gas emissions.  Between these two extreme groups, with forty percent of global income, are those that many call the “global middle class,” though the term, with its rich-world connotations of comfort and security, is hardly appropriate when applied to the middle regions of the global income distribution.  In fact, most of the people in the so-called “global middle class” are extremely poor.  Consider, for example, an individual income of $20 per day.  It may be ten times higher than an abject poverty threshold of $2 per day, but even at this level almost all household income is immediately consumed with the daily struggle to meet basic needs and establish some small modicum of economic security.  And yet fully two-thirds of the human population live on less than $20-per-day, including nearly half of the middle 40 percent shown in the above figure.

These disparities are very closely paralleled by disparities in emissions.  And, again, wealthy people overwhelmingly reside within the world’s wealthy countries, and this is particularly true at the high end of the global income distribution.  Their “luxury emissions”—to use the jargon of the global climate justice movement—support lifestyles that simply cannot, without some extremely hypothetical technological miracle, be shared by all.  Clearly, in any fair approach to international cooperation, these wealthy populations, with their luxury emissions, must be treated very differently from poorer populations, most of whose emissions are associated with basic and “global middle class” living standards.

 

                Global Income Classes, by Country

There’s a lot to say about this, but I can’t skip over the matter  of nations, which despite globalization are fundamental to our world.  One easy way to approach the issues here is to take a different view of the three global income classes defined in the champagne glass above, this time focusing on the nations from which their members hail.  Such a view is shown in this second figure, which contains three pie charts, which represent, by their sizes, the share of global income that goes to the top 10%, the middle 40%, and the bottom 50% of the global population distribution.

As you can see from the top pie chart, which represents the top 10% of the world’s income earners, the majority of this income goes to citizens of the “old rich” countries.  More than half goes to citizens of the U.S., Canada, and the European Union, and much of the rest to Japan, New Zealand and Australia.  Notably, a good fraction goes to Chinese, though far more goes to Americans.  Even at this very rough level of detail (the global top 10% hardly consists of only the truly wealthy) there are fewer Chinese than Americans, and they enjoy a considerably lower average income.

The second pie chart is sized to represent the middle 40% of the global income distribution, which defines a considerable range of incomes—glance up at the champagne glass and compare the top of this “global middle class” to the bottom.  Still, some quick observations are in order. Notably, a much higher fraction of this middle class income goes to the Chinese than in the top decile.  Also note that this “global middle class” contains significant numbers of people from the U.S. and Europe, and here the crucial point is that these people, most of whom are considered poor at home, are not so very poor in the global scheme of things.  This is critical point if you’re interested in footprint analysis and planetary limits, because it helps you to think about the justice of rich-world consumption patterns.

This story gets complicated, and it also gets a lot of press.  For example, The New York Times, in reference to Wallace-Well’s The Uninhabitable Earth, recently told us that “Global emissions could be cut by a third if the richest 10 percent of humanity cut their use of energy to the same level as affluent, comfortable Europe.” [5]  This, as it happens, is a familiar statistic, for Kevin Anderson, who has long been one of the most straightforward and trenchant of the world’s leading climate scientists, has been repeating it for years.[6]  The arithmetic is simple, and depends only on a few simple numbers, the key one being that, as shown above, the richest 10% of the global population—the richest 500 million adults—are responsible for about 50 percent of all global emissions.

As for the third pie chart, its most notable feature is simply its small size; it represents half of the world’s people, but it is the poor half, and they are very poor indeed.  Indeed, these billions of people receive in total less than one-tenth of the global total incomeNote too that while there are some very poor people living in the US, Europe, and the other regions of the developed world, there are not enough of them to rate a visible slice of the bottom pie chart, where they are being grouped with the enormous number of extremely poor people in the developing world.

Takeaways

In all this, the single most important takeaway has to be that our “twice divided world”—which is riven on one axis between the rich and the poor and on another by the North and the South—gives almost everyone good reason to feel confused, angry, and afraid.  This is not a small thing, for it doesn’t exactly prime us to stand together, which is what we must do if we’re to face the rigors of emergency climate mobilization.  In particular, the dynamics of globalization, as they have unfolded under the sign of neoliberal capitalism, have pitted the rich-world’s poor against the poor-world’s poor, who are struggling to enter the “global middle class,” and the poisonous consequences of this tension (think “populism”) are obvious everywhere.

Then there is the problem of the truly rich, who elude the analysis above.  And as soon as you bring them into the story you face a dilemma, because the rich do not all reside in wealthy countries.  To be sure, the “old rich” countries are home to the vast majority of the rich—12% of Americans are in the global one percent, which is to say that they have something like a million dollars[7]—but there are one-percenters everywhere.  Even poor countries like India have a small wealthy stratum, and its members have an inherent conflict of interest, as do the wealthy everywhere.  Do they stand with their poor countrymen, or with the global rich?  This is a source of real confusion, and not just to them.

How to sort all this out?  One good way is to look at where the money actually is, and with it the capacity to act to face the climate crisis.  When you do, you get a nuanced picture that both resembles and refutes the classic model of the post-colonial world, which divides the globe between the “developed” and the “developing” countries.  It’s not quite like that anymore.  Zoom in from the global one percent to the world’s “ultra-high net worth individuals,” which the Credit Suisse Global Wealth Report defines as having at least $50 million, and you’ll see that 47% of them reside in the U.S., 22% in Europe and 11% in China.[8]  In this distribution the shape of history is still clearly visible (the past, as Faulkner noted, is not even past) but so is the emerging world, which (if recent trends continue) really is primed to see an income-distribution convergence between China and the United States.[9]

All this weighs strongly on the climate transition, for inequalities in wealth are directly paralleled by inequalities in power.  Elites are able not only to set frames and agendas, but also to overbear fragile democracies with their preferences, to engineer trade relations that undermine community resilience around the world, to spread disinformation at will, and to sabotage efforts to mobilize at the necessary scale.  This power, indeed, is a big part of the story of how we’ve arrived at our current reckoning.  And remember, there could easily be worse to come.  Societies, particularly when under environmental pressure, stumble toward collapse when their elites, those who set collective priorities and allocate resources, distance themselves from the realities and afflictions of the population as a whole, and come to act so much by the logic of narrow self-interest that they become blind to the larger predicament.[10]  The same can be said, it seems, of a world in which rich countries let poor countries fall to famine and rising seas, blind to the near certainty that, down this road, their own fate will ultimately be the same.

The imperative of internationalism

If we’re going to stabilize the climate system, we’re going to have to do so within the political-economic maelstrom of our twice-divided world, and we had best give some time to understanding its dynamics.  They are not limited to income dynamics per se—race in particular is a critically important force in human affairs, and so are other dimensions of structural oppression—but it’s fair to say that the forces now buffeting society are very much rooted in extreme income inequality.

Unfortunately, we’re not exactly on the road to centering inequality in our thinking.  But then again, we’re not on the road to centering any really global view of the climate challenge, and this absolutely must change.  Here it must be said that today’s Green New Deal vision, fantastically useful though it is for foregrounding domestic inequality, does not seem likely to do the same for international inequality.

This is not exactly a criticism.  After all, we have to be measured and strategic, now more than ever, but at the same time we have to start talking, seriously, about a global transition that is more than just a proliferation of nationally-rooted Green New Deals.  Thankfully, the U.S. Green New Deal did make a tentative move towards global solidarity—recognizing (in February’s formal resolution) the need to “help other countries achieve a Green New Deal,” though offering nothing substantive to back this up.  Minimally, every national campaign needs an international justice plank, because the bottom line is that we’re not going to get anywhere near the Paris temperature targets without international effort sharing and cooperation, and we’re not going to them either without taking the global justice challenge into proper account.  This for the simple reason that any meaningfully deep and rapid global climate mobilization is going to be expensive, and we’re going to have to figure out how to pay for it.

Here, I’d like to suggest that we declare a moratorium on vague critiques of the Paris Agreement.  Paris was built to be strengthened, which it will be, if and when the world nations decide to strengthen it, which by the way is going to be a lot easier with a first version on the books than it would ever have been without it.  So think about Paris, and the Green New Deal, and the green technology revolution, as building blocks.  The question is how to put them together.  If anything is clear it is that this means redirecting trillion-dollar investment flows from the “brown” projects that currently attract them to green ones, and that this in turn means thinking globally, because it absolutely means pumping massive amounts of public money into the Green Climate Fund (and other cooperation mechanisms) so that we can animate the Paris system.  In practice, this means achieving the first-round pledges of national action, all around the world, even as we push our respective nations—poor nations as well as wealthy nations—to put stronger pledges on the books.  Remember, we’re following the IPCC, which means we’re aiming for a global emissions level that is about 45% below the 2010 level by 2030.  We’re not going to hit it with bottom up action alone.  We need global action and that means global solidarity and that means money.  Lots of it.

So we’re in the midst of a pivot right now, but still these are early days.  We know now how much trouble we’re in, but if we’re to get serious about a properly scaled response, we’ll have to get down to hard and practical questions about making the climate transition fair, globally as well as within wealthy nations like the U.S.  And that means a kind of transformational justice, yet to be fully invented, that takes proper account of both the national rich and the global rich, and on the other side the national poor and the global poor.  Because both of these divides are real, and taken together they define our real conditions of life.

There are bottom lines here.  One is that most of the people on the planet are still very poor.  Another is that the global rich have a lot of money.  They also have the power to decide whether we sink or swim. Think about it.

Tom Athanasiou

June 3, 2019

 

[1] Vaclav Havel, Living in Truth: 22 Essays Published on the Occasion of the Award of the Erasmus Prize to Vaclav Havel, Faber & Faber, 1990.

[2] This figure is taken from After Paris: Inequality, Fair Shares and the Climate Emergency.  In this graphic, internal national income distributions (which are then attributed to global income deciles) are estimated by way of  their Gini coefficient, as taken from: U.N. World Income Inequality Database. https://www.wider.unu.edu/project/wiid-world-income-inequality-database  For more details on the log-normal algorithm that is used here, see Kemp-Benedict, Eric, Tom Athanasiou, Paul Baer, Christian Holz, & Sivan Kartha (2018)  Calculations for the Climate Equity Reference Calculator, Stockholm Environment Institute, EcoEquity.  https://doi.org/10.5281/zenodo.1748847

[3] The “1 percent of 1 percent of 1 percent” citation is to Branko Milanovic, Global Inequality: A New Approach for the Age of Globalization, The Belknap Press, Harvard, 2016), page 37.

[4] Anytime you see an estimate of the emissions of a particular group—say the emissions of the richest tenth of the American population—you’re probably seeing a number that was derived by multiplying income by a carbon intensity, which Milanovic helpfully translates into English as “average intensity per dollar spent.”  Further, and importantly, he adds that “the rich have higher average emission per dollar spent than the poor,” and for this reason, even on a dollar-for-dollar basis, the consumption of the rich is likely to generate more atmospheric carbon the consumption of the poor. “This is because they consume emission-intensive services and goods like airplane trips and meat much more than the poor.” (Branko Milanovic,” The illusion of “degrowth” in a poor and unequal world, November 18, 2017, https://glineq.blogspot.com/2017/11/the-illusion-of-degrowth-in-poor-and.html)

[5] John Lanchester, “Two New Books Dramatically Capture the Climate Change Crisis,” The New York Times Book Review, April 12, 2019

[6] See for example Climate Scientist: World’s Richest Must Radically Change Lifestyles to Prevent Global Catastrophe, https://www.democracynow.org/2018/12/11/scientist_kevin_anderson_worlds_biggest_emitters

[7] Milanovic, Global Inequality, op. cit. page 22.  For comparison, “42 million people, or 0.8 percent of the world’s population, have a net worth greater than $1 million.  That group–roughly the global 1 percent—controls 44.8 percent of the world’s wealth.” See Dylan Matthews, Are 26 billionaires worth more than half the planet? The debate, explained., Vox.com, https://www.vox.com/future-perfect/2019/1/22/18192774/oxfam-inequality-report-2019-davos-wealth

[8] Credit Suisse Global Wealth Report 2018, https://www.credit-suisse.com/corporate/en/research/research-institute/global-wealth-report.html

[9] The issues here are both fraught and crucial, but I will say that Milanovic, who is very quick to stress the outsized role that the Chinese boom has played in lifting people out of poverty, is also very frank here.  See “Forecasts of Global Inequality” (pages 174-175 in Global Inequality) and see especially his 2018 Leontief lecture, wherein he compares the projected income distributions of the U.S. and China.  https://www.youtube.com/watch?v=kOqzimgn6K8#t=43m55s

[10]  This point was argued by anthropologist Jared Diamond in his 2005 bestseller, Collapse: How Societies Choose to Fail or Succeed.  And Diamond, it should be said, is hardly a critical anthropologist.  The evidence here is quite strong.