A new study published in the journal Communications Sustainability has estimated that the world's highest-consuming 10% of people could be causing environmental damage worth $1.7 trillion to $5.7 trillion annually. According to the research, approximately 60% of this highest-consuming group lives in the US and the European Union, while India accounts for only about 2%. The study found that damage through biodiversity loss makes up 47-56% of the total bill, followed by climate change at 36-45%. Researchers from the universities of Oxford and Leiden combined consumption-based environmental footprints with prices from the Environmental Prices Handbook 2024 to estimate the monetary cost across climate change, biodiversity loss, nitrogen and phosphorus pollution, and freshwater use. The study calculates this bill by examining planetary boundaries - scientists believe there are nine fundamental environmental systems, each with limits on pressure handling, and crossing these boundaries causes long-lasting and potentially irreversible damage. The figures are likely conservative, as they cover only four of nine planetary boundaries and reflect direct consumption alone, with the highest-income individuals' emissions from investments not captured in this analysis.
The study identifies food consumption, particularly red meat, as a primary driver of deforestation, alongside energy usage including flights and heating and cooling homes that typically rely on burning fossil fuels such as gas, oil and coal. The $5.7 trillion figure, published in a paper by researchers at University of Oxford and University of Leiden, was calculated by using estimates of the monetary impacts of climate disruption, biodiversity loss, nutrient pollution and freshwater use. The study reveals significant regional variations in consumption patterns, with about 40-45% of EU's population and over half of the US population falling within the highest-consuming group. The annual damage bill for a person in the global top 10% averaged between $2,300 and $7,500, but climbs to $19,000 to $63,000 in the US. In the US, per-person damage impacts are found to be 6-20% of their income or 0.8-3% of their wealth. In contrast, India's per-person damage bill is $41,014, equivalent to 0.8-2.8% of income or 0.2-0.5% of wealth. Among the six countries studied - Brazil, China, Egypt, Germany, India, and the US - the top 10% of consumers within the US had the highest per-person bill of any country, causing up to $63,000 worth of environmental damage per year.
The study reveals that the environmental damage costs of the top 10% significantly exceed current global climate and biodiversity funding commitments. Both the lower USA and lower Chinese estimates each already cover the $675 billion gap in biodiversity financing needed by 2030. The central USA estimate surpasses the $993 billion per year for climate action by 2035 agreed upon at the COP3021. The lower world estimate even matches the biodiversity and climate financing targets combined. These findings demonstrate the substantial potential revenue of environmental taxes if the polluter-pays principle is adopted, highlighting the mitigation responsibility of the top 10% and illustrating the potential for financing necessary environmental transitions. The study notes that the damage tally, which one researcher described as 'bonkers', also exceeds global funding gaps for tackling the climate and biodiversity crises, highlighting how economic priorities remain skewed towards running down the Earth's life-support systems.
The study's authors suggest that environmental pricing or taxation is aimed at incentivising a shift from polluting to more sustainable consumption. According to the research, environmental taxes focused on the top 10% simultaneously improve equity by targeting luxury consumption rather than basic goods in high-income countries. In low-income countries, any carbon tax is progressive, while in high-income countries, higher taxes for luxury consumption reduce inequality. The findings could be used as the basis for environmental taxation policies, where green taxes such as carbon taxes would hold the biggest polluters responsible by putting higher taxes on activities that pollute the most, while also limiting pollution and carbon emissions by disincentivizing environmentally damaging activities. The costs highlight the mitigation responsibility of the top 10% and illustrate the potential revenue of environmental taxes if the polluter-pays principle is adopted. The authors emphasize that environmental taxation is one tool among several, including regulation, public investment and shifts in consumption norms, and stress that taxation does not justify or compensate for the damage itself. The study concludes that governments could target this high-consuming groups through taxes on luxury goods, wealth and carbon, reducing emissions and pollution while raising revenue to support sustainability transitions and reducing inequality.
Co-author Paul Behrens from the University of Oxford emphasized that the true environmental cost by this group is likely to be even higher, stating 'If anything, these numbers are conservative. The bill leaves out the emissions tied to wealthy people's investments.' According to Behrens, research has shown that a large proportion of a rich person's carbon footprint comes from what they own, meaning their stocks, bonds and other assets. A Greenpeace study last week estimated that the assets owned by the world's richest 1% – often invested in greenhouse gas-intensive companies – were associated with a quarter of global emissions and caused nearly $1tn of climate damage each year. The study found that among the highest earners in this heavy-polluter group, investments account for roughly half of their emissions - but those emissions were excluded from the analysis, making the actual damage potentially even larger than reported. The study presents lower, central and upper estimates to reflect uncertainty, with the biodiversity component carrying the widest uncertainty because it relies on transferring European willingness-to-pay studies to other contexts. High-consuming households in emerging economies are catching up, with the average environmental damage bill for the top 10% in China having overtaken that of the top 10% in Germany, according to the report.
