2026-01-15
Our obscene and widening levels of inequality are a neglected driver of the climate crisis. We should make explicit the many ways in which inequality is driving up emissions and advocate for policies to reduce inequality as central to solving the climate crisis.
By Rob Delves, a member of the Green Issue Editorial Team
Inequality has reached crisis proportions and The Greens have several policies to reduce the gap between rich and poor. We also have wide-ranging policies to solve the climate crisis. As far as I’m aware, we rarely link the two sets of policies, although we do acknowledge that social justice principles must underpin the urgent transition out of fossil fuels to a clean energy economy. However, this is most frequently defined as rich countries assisting poorer countries with the costs of adapting to climate change damage, or assistance for workers who lose their jobs as fossil fuel plants close.
I’d like to make the case that our current obscene levels of inequality are an important but neglected contributing factor to greenhouse gas emissions. Inequality is also holding back efforts to reduce emissions. Therefore the world cannot solve the climate crisis without linking it with the inequality crisis.
The Alternative View
Except on the extreme right, there is widespread agreement amongst economists and social researchers that ever-increasing levels of inequality need to be addressed for many reasons: for example, they offend basic fairness/ethics, threaten social cohesion, erode democracy and weaken the economy. However, many argue that all this is irrelevant to the actions needed to solve the climate crisis – and that messaging making inequality reductions central to climate actions could even weaken efforts to reduce emissions.
There are two main arguments being made here. First, the clean energy revolution – based on plunging costs of solar, wind and battery technologies ‒ is now unstoppable and will soon deliver such abundant, ever cheaper energy for everyone that the market will rapidly make fossil fuels redundant. In this view, climate change is purely a technology problem, a matter of markets delivering based on economic efficiency – with maybe a little help via subsidies, regulatory standards and carbon pricing.
Secondly, it is also argued that adding social justice programs, however worthy, will complicate and reduce support for the decarbonisation initiatives. For example, here is distinguished climate scientist Michael Mann, writing in Nature:
"Saddling a climate movement with a laundry list of other social programs risks alienating needed supporters (say, independents and moderate conservatives) who are apprehensive about a broader agenda of progressive social change."
I guess this may explain why the Teal Climate Independents are largely silent on reducing inequality, reassuring their well-off constituents that ‘we will deliver a safe climate for your children, but your wealth is safe with us.’
Inequality – how bad is it?
Extremely bad and getting worse – Green Issue readers won’t need much convincing about this. At the global level, Oxfam and other organisations continue to produce ever more mind-boggling data. The wealthiest 10% own 75% of the world’s wealth, while the poorest 50% own just 2%. Just the 56,000 wealthiest individuals (entry level $200 million, median wealth nudging towards $1 billion) have three times the wealth of the poorest 50%. While the number living below the World Bank Poverty Line has barely changed since 1990, in just 2024 alone the world’s billionaires grew their wealth by $2 trillion.
Research by ACOSS shows that Australia is keeping up with world inequality trends and our wealthy are looking after themselves very well, thank you. In 2019, the highest 10% of households ranked by income had an average after-tax income of $5,200 per week, or seven times that of the lowest 20% (average below $800). The highest 10% of households ranked by wealth possess 44% of all wealth in Australia, averaging $5.2m per household. Wealth inequality has escalated over the past two decades, with the highest 10% capturing almost half (45%) of the overall increase in wealth between 2003 – 2022. In 2023, the share of wealth accruing to the highest 10% grew from 42% to 44% while that of the lowest 60% declined from 20% to 18%. In 2023, there were 159 billionaires in Australia with average wealth of $3.2 billion each. Nice work if you can get it – though as Oxfam argues, when it comes to billionaires it’s a case of TAKE rather than MAKE wealth.
How Inequality Fuels the Climate Crisis
I’m indebted to books by Thomas Piketty and Naomi Klein, also several articles by proponents of the Green New Deal. They all describe several ways in which inequality is an important driver of carbon emissions. Therefore, moving rapidly towards a world where income and wealth are much more equally shared is essential if we are to have any hope of ensuring a safe climate for our children and grandchildren.
The wealthy are champion polluters. First of all, let’s look at the wealthy’s huge carbon footprint. Everyone knows that the richest 10% with their extravagant lifestyles are responsible for a vastly disproportionate share of global emissions, much greater than that of the poorest 50%. However, it’s hard to find widely-agreed numbers for this. Piketty explains several ways of comparing their contribution to carbon emissions (for example comparing by investments or by personal consumption) but his ballpark average figure from these different measurement methods is that the richest 10% are responsible for nearly 50% of emissions compared to 20% for the poorest 50%. Just the richest 1% are responsible for more than twice the emissions of the poorest 50%.
One intriguing estimate is that global emissions would be reduced by 30% if the emissions of the 1.1 billion richest were capped at those of the least polluting members of that group. Presumably those admirable rich people are still living very comfortably – not using private jets but also not exactly reduced to huddling around candles in their yurts.
Their high polluting activities are harder to abate. The increases in energy to achieve a much-needed improvement in the lives of the poorest involve sectors that are easiest to transition to green technologies, such as insulation, rooftop solar and batteries and getting off gas to go full electrification of homes. By contrast, luxury high polluting activities are amongst the hardest to abate, for example excessive use of flying, especially in private jets. It follows that substantial cuts to emissions would result from heavy taxes on the income and wealth of the top 10%, then using the proceeds to enable lower income households to get off gas, afford rooftop solar, batteries, full home electrification, insulation and homes better designed to maintain a comfortable temperature.
Extreme inequality gives the wealthy extreme power. Concentrated wealth leads to excessive influence over the media, politics and the production process. In our extremely unequal societies, the 1% now own most of the means of production. This gives them enormous power over investment decisions, especially since the post-1980s privatisation-mania, where shareholder power is everything – certainly dwarfing environmental concerns. They use their power to suppress community opposition to environmentally-damaging projects and their relationship with government can now most accurately be described as state capture. In WA, the relationship between wealthy gas company owners/investors and government is state capture on steroids.
Inequality breeds non-cooperation. Inequality erodes social trust and thus the social foundations of collective action, especially actions calling for common sacrifice. In the neoliberal decades of widening inequality, many working people have been forced to absorb reforms that reduce their wages, security and working conditions. This makes them fearful and wary of further change, including calls for everyone to share the costs and burdens of changes involved in the clean energy transition.
Public acceptance of carbon pricing is a particularly sharp example of this, as it asks everyone to accept the same increased cost of energy and related necessities. Of course these cost increases have negligible impacts on the budgets of higher income people, but can be harsh for lower-income people, because energy costs comprise a much higher share of their budgets and they often live in energy inefficient homes and are renters. So they are easily turned against the carbon price initiative by fear-mongering predictions of soaring costs to the family budget.
Piketty believes that most ecological parties have failed to put social justice at the heart of their climate design and messaging. Hence their climate change policies are resisted by working class people. Carbon taxes appear to them as just another neoliberal nasty regressive tax:
"Ecologism without massive redistribution of wealth and economic power seems like a trick on the working classes… In practice, these voters often feel stigmatised for their environmental responsibilities (e.g.: with their use of personal cars or detached houses), while the relatively favoured urban classes that stigmatise them are often responsible for much greater environmental damage (e.g.: through their use of planes, or more generally, their higher incomes)."
Piketty’s critique is aimed at environmental parties in France and Germany, but I think it has at least some resonance with Australia.
Inequality Solutions are Climate Crisis Solutions
So for starters, carbon price policies should include compensation directed particularly and generously at lower income households. And emission reduction programs more generally must be twinned with a raft of bold measures to reduce inequality.
There are two major categories of action here. Firstly, governments and a range of other non-market actors must deliver egalitarian universal services across much more of the economy, in competition with the private sector or even replacing it. Secondly, governments must enact strong progressive taxes on the wealth and incomes of wealthy individuals and corporations. These inequality-reduction reforms would enable people to embrace the inevitable transformations to a zero emissions economy without fearing for their economic security – in fact, actively supporting the changes for the obvious benefits they will deliver.
I’m proud that the Australian Greens have strong, well-researched and costed policies in both of these two categories. For example, we propose much increased investment to provide a wider range of non-market essential services free or at affordable rates in education, health (free dental and mental health care is urgently needed and has widespread support), expanded and much cheaper public transport, measures to enable low-income households to afford rooftop solar and batteries, and much more. I’m especially proud of our proposals around affordable housing for all, which are based on the state becoming a major player in the housing market, providing affordable home ownership and rentals for those seeking an alternative to the private market.
Under the second category, we lead the political pack in advocating for direct wealth taxes and reforming tax settings that overwhelmingly benefit the wealthy, for example negative gearing and the capital gains tax discount.
We don’t usually argue for this raft of policies as essential for the urgent task of averting climate disaster. Maybe we should – or would it just complicate the messaging?
References:
Thomas Piketty (2025), Equality is a Struggle: Bulletins from the Front Line 2021-2025
Naomi Klein (2014), This Changes Everything: Capitalism vs the Climate
Header photo: Rising inequality Jac Depczyk
[Opinions expressed are those of the author and not official policy of Greens WA]