Economists: 90% Can Earn More Without Climate Collapse

A significant portion of the population could see higher incomes without causing climate collapse, according to economists Olivier De Schutter, Thomas Piketty, and Sebastian Silva-Leander. They argue that the climate crisis and economic inequality are intrinsically linked and that addressing one requires tackling the other. The authors contend that when the wealthiest individuals contribute the most to emissions while paying lower taxes, public willingness to support climate transition efforts diminishes.

This perspective is rooted in two major international reports released in June: the "Global Justice Report" by the World Inequality Lab and "A Roadmap for Eradicating Poverty Beyond Growth," presented to the UN Human Rights Council. These reports, largely overlooked in Sweden, fill a gap left by the IPCC by explaining the economic mechanisms driving the climate crisis. The economists assert that the failure to resolve the climate crisis is not merely a technical issue but a systemic one, deeply embedded within our economic structures and potentially the foundations of Western civilization.

The authors highlight that the flaws of the current economic system are becoming increasingly evident. In periods of rapid economic growth, these issues could be masked, as the overall increase in wealth benefited many, despite unequal distribution and environmental impact. However, as the planet approaches its limits, the negative consequences, manifested as extreme heatwaves and natural disasters, are becoming more pronounced. Simultaneously, with slowing growth, partly due to aging populations and maturing economies, it becomes harder to compensate for the system's drawbacks.

Sweden's own economic data reflects this trend, with GDP per capita growth below 1 percent for 10 of the last 20 years and negative in 5 of those years. This trend is further exacerbated by geopolitical instability and other global shocks. The economists predict that as the climate crisis intensifies, economic growth will likely become even more unreliable. Consequently, the critical issues of resource distribution and utilization will be brought to the forefront, demanding urgent attention and systemic change.

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We cannot understand the climate crisis if we close our eyes to inequality. They are connected. When the richest account for large emissions but at the same time pay less tax, people's willingness to contribute to the transition decreases. But there is another way where most people can have it better without sacrificing the climate.