America's wealthiest 10% responsible for 40% of US greenhouse gas emissions

A new study, led by the University of Massachusetts Amherst, reveals that the wealthiest Americans, those whose income places them in the top 10% of earners, are responsible for 40% of the nation's total greenhouse gas emissions. The study, published in  PLOS Climate, is the first to link income, especially income derived from financial investments, to the emissions used in generating that income. The authors suggest that policymakers adopt taxes focused on shareholders and the carbon intensity of investment incomes in order to equitably meet the goal of keeping the global temperature to 1.5 C of warming.

Scientists and environmentalists have long known that consumption -- the amount and kind of food we eat, the vehicles we drive and all the stuff we buy -- is closely linked to greenhouse gas emission. Traditional environmental policy has then sought to either limit consumption or guide it into more environmentally friendly avenues: replacing red meat with plant-based diets or swapping a gas-guzzler for an electric vehicle.

"But," says Jared Starr, a sustainability scientist at UMass Amherst and the lead author of the new study, "consumption-based approaches to limiting greenhouse gas emissions are regressive. They disproportionately punish the poor while having little impact on the extremely wealthy, who tend to save and invest a large share of their income. Consumption-based approaches miss something important: carbon pollution generates income, but when that income is reinvested into stocks, rather than spent on necessities, it isn't subject to a consumption-based carbon tax."

"What happens," Starr asks, "when we focus on how emissions create income, rather than how they enable consumption?"

An answer to that seemingly simple question, however, is fraught with difficulty, because though it's relatively easy to capture a snapshot of wages and salaries -- the main sources of income for 90% of Americans -- it has been very difficult to get a sense of the investment income that makes up a large source of the richest Americans' wealth.

To solve this problem, Starr and his colleagues looked at 30 years' worth of data, drawing first on a database containing over 2.8 billion inter-sectoral financial transfers and following the flow of carbon and income through these transactions. This allowed them to calculate two different values: supplier-based and producer-based greenhouse gas emissions of income.

Supplier-based emissions are those created by industries that supply fossil fuels to the economy. For instance, the operational emissions released by fossil fuel companies are actually quite low, but they make enormous profits by selling oil to others who will burn it.

Producer-based emissions are those directly released by the operation of the business itself -- like a coal-fired power plant.

With these two figures in hand, Starr and his co-authors then linked their emissions data with another database containing detailed demographic and income data for over 5 million Americans. This database parses out income sources differentiating active income -- the wages or salaries earned through employment -- from the passively generated investment income.

Not only did the team find that over 40% of U.S. emissions were attributable with the income flows of the top 10%, they also discovered that the top 1% of earners alone generate 15 -- 17% of the nation's emissions. In general, white, non-Hispanic households had the highest emission-linked income and Black households the lowest. Emissions tended to increase with age, peaking with the 45-54 age group, before declining.

The team also identified "super emitters" with extremely high emissions intensity. These are almost exclusively among the top 0.1% of households, which are overrepresented in the fields of finance, real estate and insurance, manufacturing, and mining and quarrying.

"This research gives us insight into the way that income and investments obscure emissions responsibility," says Starr. "For example, 15 days of income for a top 0.1% household generates as much carbon pollution as a lifetime of income for a household in the bottom 10%. An income-based lens helps us focus in on exactly who is profiting the most from climate-changing carbon pollution, and design policies to shift their behavior."

In particular, Starr and his colleagues point to income and shareholder-based taxation -- rather than taxing consumables.

Read more at Science Daily

Who wants to be a billionaire? Most don't -- which is good news for the planet

A founding economic principle that everyone is motivated by 'unlimited wants', stuck on a consumerist treadmill and striving to accumulate as much wealth as they can, is untrue, say the authors of a new study.

The long-held economic belief that people have unlimited wants has permeated economic thinking and government policies and has shaped much of modern society, including advertising and consumerism.

But belief in this principle has also had dire consequences for the health of the planet. Striving to continually increase individual wealth, and pursuing unending economic growth, has come at a heavy cost. As wealth has increased, so too has resource use and pollution.

Up until now, researchers have struggled to find appropriate ways to decouple economic growth from damaging economic principles. Now though, a new study led by psychologists at the universities of Bath, Bath Spa and Exeter challenges the idea that unlimited wants are human nature, which could have important implications for the planet.

Across nearly 8000 people from 33 countries spanning six continents, they surveyed how much money people wanted to achieve their 'absolutely ideal life'. In 86% of countries most people thought they could achieve this with US $10 million or less, and in some countries as little as $1 million.

Whilst these figures may still sound a lot, when considered that they represent a person's ideal wealth across their whole life they are relatively moderate. Expressed differently, the wealth of the world's single richest person, at over $200 billion, is enough for more than two hundred thousand people to achieve their 'absolutely ideal lives'.

The researchers collected responses about ideal wealth from individuals in countries across all inhabited continents, including countries rarely used in cross-cultural psychology such as Saudi Arabia, Uganda, Tunisia, Nicaragua, and Vietnam. People with unlimited wants were identified in every country, but they were always in the minority.

They found that those with unlimited wants tended to be younger and city-dwellers, who placed more value on success, power, and independence. Unlimited wants were also more common in countries with greater acceptance of inequality and in countries that are more collectivistic: focused more on group than individual responsibilities and outcomes.

For example, Indonesia, which is considered more collectivistic and accepting of inequality, had the most people with unlimited wants whilst the more individualistic and equality-concerned UK had fewer. However, there were anomalies like China, where few people had unlimited wants despite high cultural collectivism and acceptance of inequality.

Lead researcher, Dr Paul Bain from the Department of Psychology at the University of Bath (UK) explained: "The ideology of unlimited wants, when portrayed as human nature, can create social pressure for people to buy more than they actually want.

"Discovering that most people's ideal lives are actually quite moderate could make it socially easier for people to behave in ways that are more aligned with what makes them genuinely happy and to support stronger policies to help safeguard the planet."

Read more at Science Daily

Powerful people are less likely to be understanding when mistakes are made

Those with power, such as the wealthy are more likely to blame others for having shortcomings and they are also less troubled by reports of inequality, according to recent research from the University of California San Diego's Rady School of Management.

The study published in Social Psychological and Personality Science defines power as control over valuable resources. The paper finds that people in positions of power are more likely to adopt a "choice-mindset," which means that although they have more choices (the definition of power in many cases) they still see others with less power as having lots of choice, regardless of their situation. Consequently, high-power individuals are more likely to blame others if they perform poorly and they are also more likely to punish them.

"Being in a choice-mindset changes how individuals think, feel and behave," said Yidan Yin, the first author of the paper and recent PhD graduate from the Rady School. "Compared to low-power people, high-power people are less likely to be aware of others' constraints. As a result they assign more blame when people make mistakes or have shortcomings. Thus, they see the current hierarchy as more justified."

The results from the research were derived from three different studies the authors conducted to replicate the findings in different settings.

Research findings hold up in three robust study settings

The first study was conducted via a survey in which the researchers measured the sense of power of 363 members of the general public recruited through the platform Prolific. They also asked the participants to complete a separate survey, claiming it was unrelated, in which they were crowdsourcing how to resolve a human resources issue at the university. The survey explained that their academic department was weighing whether to give an administrative assistant a bonus though they had missed a deadline on a big project due to conflicting priorities. The survey participants who measured as having a greater sense of power overwhelming responded the administrative assistant did not deserve the bonus and that their excuses were without merit.

The second study was conducted with the platform Amazon Mechanical Turk involving 393 members of the general public who were randomly assigned to roles as supervisors and subordinates in completing various tasks. Though the assigned ranks were random, supervisors were told they earned the role for their proficiencies and subordinates were told they were designated as such because they were outperformed by supervisors.

The two groups had to judge the performance of an anonymous individual, who by design, made mistakes in completing their tasks. Once again, the researchers found that those with a greater sense of power (supervisors) were harsher, less understanding with their judgment and recommended punishment more than subordinates.

The third study was done in a lab with UC San Diego undergraduates and mirrored the second experiment. The main difference was that both supervisors and subordinates knew that the target person they had to judge had the rank of a subordinate and therefore less choices. The results from the first two studies held up with subjects that had more power assigning more blame and recommending more punishment.

"Each study was designed to build on the others," Yidan and co-author Pamela K. Smith, associate professor of economics and strategic management at the Rady School write. "In study one, we were measuring power, in study two, we manipulated power and in study three, we created a world in which the judges knew the target person had less power and less choices. We wanted to see if the perceptions remained consistent in all three settings. It was a combination of replication and adding these additional twists and turns."

Implications for more equitable public policy and workplace environments

The results from the study have significant implications for public policy, according to the authors.

"Policymakers are in a position of power and privilege and may be less sensitive to the disadvantages of their constituents," the authors write. "This is especially important as we come out of the pandemic when there are big discussions in the political domain on pulling back on unemployment benefits, or rent assistance. If you are in a position of power, you may assume people are choosing to stay home and not work and they can make better choices. However, you may need to think much more carefully about how many choices citizens have and if you are missing constraints they face."

In addition, the implications are far-reaching for the workplace.

"Mangers should be aware of how many more choices they have than their subordinates and their tendency to project their own choices onto others, especially when employees make mistakes." Yin said.

Read more at Science Dialy