Inequality of income and wealth is unfair, yet the world continues to tolerate growing injustices, the most recent being inequalities in vaccine distribution.

French political economist Thomas Piketty and his colleagues at the World Inequality Lab have just published the World Inequality Report 2022, a veritable gold mine of data and information on global inequalities. I found at least three nuggets inside that are blindingly obvious.

First, inequality is above all a political issue. We can all do something about it, but since politics has been captured by money, a few remain more equal than most. Between 1995 and 2021, the richest 1% of the world’s people captured 38% of the growth in global wealth, while the poorest 50% held a pitiful 2% share. Likewise, the richest 10 percent of the world’s population receive 52 percent of global income, while the poorest 50 percent earned only 8.5 percent.

The report showed why these inequalities could not be reduced despite the increase in average income and wealth per capita. Progressive tax rates where the rich paid more than the poor, introduced in the first half of the 20th century to tackle inequality, were dismantled in the 1980s. The neoliberal philosophy of the free market preached low taxes and small governments to encourage entrepreneurship, but effectively handed over more income and wealth to a few elites.

Piketty’s second historical glimpse is that Europe and later America got richer through both the Industrial Revolution and colonization. In 1820, inequalities between countries (inter-countries) were only 11% of global inequalities, which means that most inequalities were national (intra-country). But inequalities between countries increased as the West moved forward with industrialization and resource extraction from the colonies. This peaked in 1980 when it accounted for 57% of global inequality. Since then, rising incomes from China, India and other newly independent countries have narrowed the gap with the West, but by 2020, national inequalities again amounted to 68% of global inequalities. This meant that developing countries allowed their own inequalities to worsen, even as they closed the gap with the West.

In short, the rich are the same everywhere. They have more and want more.

But there is a twist in this story. One of the reasons the rest have caught up with the West is that “nations got richer, but governments got poor.” Essentially, because the governments of Europe, North America, and Japan have used debt to combat slow growth since the 1980s, private wealth has grown at the expense of public wealth. Privatization policies transferred public wealth such as public services to the private sector, while public sector debt continued to rise.

The third idea is that inequalities and climate change are closely linked. Between 1850 and 2020, half (49%) of historical carbon emissions were from North America (27%) and Europe (22%), China accounted for 11%, but became the biggest emitter, although per capita emissions remain lower. A recent IMF study pointed out that “the richest countries represent only 16% of the world population but almost 40% of CO2 emissions. The two poorest country categories in the World Bank’s ranking represent nearly 60% of the world’s population, but less than 15% of emissions. The COP26 debate revolved around whether China, India and other emerging markets that are increasing their carbon emissions should do more on Net Zero commitments.

The entanglement between CO2 emissions and income and wealth levels suggests that global warming policies should focus more on making those responsible for carbon emissions pay more for climate corrective measures. The poorest 50% of Europe’s population emit around 5 tonnes of carbon per person per year, with their counterpart emitting 3 tonnes in East Asia and 10 tonnes in North America.

But the richest 10 percent of these regions account for 29 tonnes in Europe, 39 tonnes in Asia and 73 tonnes in North America. Indeed, the richest 1% in the United States represents 269 tons of carbon per person per year, against 139 tons for the richest 1% in China. The rich are the biggest emitters of carbon everywhere.

All these elements suggest that the fight against climate change and social injustice is part of a global political whole, covering all nations. It’s one thing to promise to reduce carbon emissions at Net Zero, it’s another to design projects and programs to deliver on their promises. Back home, each government will face tremendous resistance from vested interests who want to delay or simply green any action. In other words, talk more and do less.

The report made some excellent suggestions for tackling inequalities, such as progressive tax measures and a global asset register, which are sure to be controversial. But to be effective, they need global cooperation. No country can impose higher tax rates or tougher measures without being undermined by another country.

The next World Summit should be about how to tackle inequalities. Given the issues and such complex facts raised by Piketty and his colleagues, the least we can do is have a democratic, transparent and constructive dialogue about how those who can afford and emit more carbon should pay more. taxes to promote a more sustainable and inclusive environment. world.

Life is unfair, but what can we do about it?– – –
Andrew Sheng writes on global issues from an Asian perspective. The views are entirely his. – Ed.

(Asian News Network)

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