The Carbon Footprint of Capital

Lucas Chancel, Stone Visiting Scholar, Visiting Associate Professor of Public Policy, Harvard Kennedy School

Abstract: How are individual carbon emissions distributed across the population? The notion of individual responsibility in the climate crisis is contentious and depends on the accounting framework used to monitor individual emissions. These methods carry underlying assumptions about individual agency and power relations in the economy. In this work, we introduce a novel framework to systematically measure individual carbon footprints, accounting for both consumption and ownership-related emissions to varying degrees. We apply this framework to France, Germany, and the US, via the systematic combination of income and wealth surveys, tax data, input-output tables, and emissions data. We find that individual emissions increase along the wealth distribution and taking into account emissions from capital ownership reinforces this relationship: emissions of the wealthiest 10% of the population are 2-2.8x higher (depending on the country) when ownership emissions are considered, as compared to consumption-only estimates. Financial assets such as equity are found to emit, on average, 75-150 tonnes of CO2 per million dollars or euros owned, contrasting with average per capita emissions of 8-13 tonnes per year in France and Germany and around 20 tonnes in the USA. When ownership emissions are factored in, we find that 75-80% of the emissions attributed to the richest 10% stem from the assets they own, rather than from their direct energy use. We discuss these results through the lens of current academic and policy debates on global carbon inequalities and fair climate transitions.

Lucas Chancel is the 2023-2024 Stone Visiting Scholar and Visiting Associate Professor at Harvard Kennedy School. Professor Chancel is an economist who specializes in inequality and in environmental policy. His work focuses on the measurement of economic inequality, its interactions with sustainable development and on the implementation of social and ecological policies. He is a tenured Associate Professor at Sciences Po and is the co-director of the World Inequality Lab at the Paris School of Economics.