Everyone should know that we’re heading to a climate disaster that can best be modified by immediate actions addressing the causes. But it doesn’t appear that the excessively rich are feeling the heat and stepping up to the plate. Their philanthropic foundations announce commitments to fight climate change but in reality, they are building up endowments to save for the future.
Over $200 billion are sitting in donor-advised funds and over $1.3 trillion in private foundation endowments. Charitable giving to fight climate change, estimated by the ClimateWorks Foundation at $7.5 billion last year, is only 0.5% of the money sitting in private foundations and donor-advised funds–and amounts to about 0.04% of the assets of the ultra-rich.
It is estimated that it could take $3 to 10 trillion (twelve zeroes) per year to avoid climate disaster. Even if they wanted to fix the climate problem, it would require extraordinary collective action for philanthropists to pony up enough money to fix the climate problem. Only governments (funded by taxes on these very ultra-wealthy donors) can effectively do that. In short, the philanthropic investments now being made are necessary but insufficient.
We need to hold the ultra-rich responsible for the role their investments play in worsening the climate crisis, call out their insincere philanthropic efforts aimed at “addressing” climate change, and hold them accountable for paying their fair share of taxes to provide funding for clean energy.
Extreme inequality and wealth concentration undermine humanity’s ability to stop climate breakdown. The richest of the rich play the largest role in driving and accelerating the climate crisis with out-of-control carbon footprints due to extravagant lifestyles, excessive wealth-hoarding, corporate greed, and investments in polluting industries. Poor and middle-class communities who share the least responsibility for the problem will bear the brunt of climate change and suffer the most as shifting weather patterns, destructive storms, floods, wildfires, and heat waves wreak havoc across the globe, with the potential to displace 216 million people from their homes (and countries) by 2050.
According to the most recent data, the world’s top 125 billionaires have “an average of 14% of their investments in polluting industries, such as fossil fuels and materials like cement….Only one billionaire in the sample had investments in a renewable energy company.” When combining the impact from both their investments and lifestyles, carbon emissions exceed 3 million tons per billionaire, about a million times greater than the average person! The same report finds that through campaign contributions and lobbying, the wealthiest among us have an oversized impact on election outcomes and more political power than anyone else to protect their investments and shape climate policies in their favor.
And therein lies the biggest problem: We must have a functioning democracy to address society’s most pressing issues, including climate change–one where an exclusive ruling class doesn’t control our policies. When the government is beholden to the excessively wealthy, backroom deals influence laws and shape the rules without the public’s knowledge or ability to change the outcomes. The only way to limit the power of the excessively wealthy is to stop the hoarding of excessive wealth.
Extremely rich Americans hoard their wealth through tax loopholes and preferential policies enforced by their armies of lawyers, accountants, wealth advisers, and politicians. Four simple tax solutions would address excessive wealth hoarding: a multi-millionaire income tax, a robust wealth tax, closing gaping estate tax loopholes through an estate or inheritance tax, and finally, changes to the tax rules to foster increased, transparent and more equitable charitable giving.
We are facing a collective emergency: to save the planet from–and for–ourselves. The rapidly accelerating climate crisis is a class issue that impacts all of humanity. The reality is that our futures are interconnected with one another–and economic and climate inequality reinforce each other. To develop solutions that slow or solve climate change, we must address the deep-seated conflicts of interest and the systemic inequalities of our unjust wealth system.
Alan Davis is the chairperson of the Excessive Wealth Disorder Institute.
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