This report offers a study of carbon emissions per income group in the UK over a twenty year period, using established ratios between income and carbon consumption. On this basis, it simulates a hypothetical carbon tax, asking the question: if the UK had implemented a tax on the excessive carbon consumption of the wealthiest 1%, how much could have been raised over the previous two decades? This is used as a case study to explore the potential of a Climate Wealth Fund and its possible uses.
- Climate politics in the UK is suffused with inequality. The top 1% of earners by income has generated roughly the same carbon footprint in a single year than the bottom 10% has in more than two decades. In other words, it would take 26 years for a low earner in the UK to consume as much carbon as the very richest do in a single year.
- The top 1% on its own (around 670,000 people) have a larger carbon footprint than the entire 3rd income decile (equivalent to ~6.7 million people)
- There have been missed opportunities. If a carbon tax had been set at the price proposed by the Swedish Ministry of Finance (approximately £115 per ton of carbon), revenue raised from the top 1% would have amounted to £126 billion over a twenty year period. Changes to the tax system are vital if future opportunities are not to be missed.
- £126 billion would have been sufficient for the UK to:
- Invest in almost five times current offshore wind capacity
- Triple current solar (PV) capacity
- Double onshore wind capacity
- Add 2.1 GW of tidal energy capacity and add a similar amount of pumped storage hydropower.
- Retrofit almost 8 million homes, upgrading their efficiency to EPC “C”, cutting energy bills while reducing overall emissions.
- These investments would amount to drastically replacing gas-generated energy with renewable sources, and would decrease dependency on imports.
- With no UK carbon tax in place, the richest 1% have been free to ‘dump’ disproportionately large amounts of carbon into the atmosphere for little to no cost, creating a burden now shouldered by the rest of the population. To green the UK economy, and bring about the change current and future generations desperately need, this must change.