Eat the Rich

We’ve argued before on this blog that taxing wealth is a defensible approach to raising revenue for vital climate change adaptation. It’s also a potential source of capital to finance investment in the low-carbon economy.

The city of Leipzig has been playing host to the International Transport Forum’s annual summit whose background paper this year focuses on the challenge of meeting the travel needs of a future world population of 9 billion.

This graphic showing the distribution across different income groups of vehicle use in the US caught the eye of a colleague to whom I sent the paper:

It tells two stories.

First, that car travel grows as incomes increase (music to the ears of those that have pilloried us for our pieces on growth and climate change). But the paper goes on to explain:

‘…if average income growth is distributed very unevenly, with high growth at the high end and limited, zero or negative growth at the low end, then average income growth does not lead to more travel as the growth accrues only or mainly to those income classes that have already reached the saturation point.’

However, the aggregate picture (told in the figure that is shown before this one in the paper) misses a very important story. In the top three income brackets, total car use has increased in the past decade – almost doubled in the case of those who earn more than $100,000 – whereas in all other income brackets bar the very lowest, car use has decreased.

Before the anti-growthers revisit the comment box below, this isn’t a growth story per se. In fact the suggestion is that there’s a saturation point for people on middle incomes (I’ve written about the peak car phenomenon elsewhere). However, it does show that the rich (of whom there are now a lot more hence in average terms the picture looks better) are consumers of a disproportionately high number of vehicle miles – to a quite staggering extent.

While perhaps a growing number of people can feasibly travel on public transport, car journeys are likely to remain a still relatively high if apparently declining part of this picture. So perhaps those on the right-hand-side of the chart above should be the ones who pay to decarbonise travel for those on the left-hand-side. In national climate policy hitherto, such as cap and trade and carbon tax, the transaction tends on the whole to happen in reverse.

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2 Comments

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2 responses to “Eat the Rich

  1. Tim

    surely the relevant histogram would use the income distribution, rather than absolute numbers for each year. Even if those are constant purchasing dollars, there’s going to be more folk on the right in 2009 than there were in 1995.

    There could be any number of stories behind these numbers. Note, for instance that the miles by income range fell in 1995 above 25k. In ’09 it’s pretty much flat between 25k and 80k.

  2. The thing is about VMT in the US in 2009 is that it was somewhat reduced due to the recession. Many people in the US drive to work and they did that a lot less because less of them had a job to go to. So this is a bit scewed by the recession which impacted US driving habits (and saved a fair bit of GHGs and oil in the process) and seems to show that higher income earners were less affected by the recession and carried on driving as much as they liked. No surprise there then.
    Still, your main point of taxing higher earner’s VMT to fund climate action makes sense. Except that taxing the rich never seems to go down too well in the US.

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