How wealth inequality is supercharging climate risks – Inside track

This post is by Will Snell, chief executive at Fairness Foundation

Most people working on climate policy are familiar with the arguments about how poverty and deprivation increase the impacts of climate breakdown, by putting more people who are particularly vulnerable at risk from heatwaves, flooding and other events. Poverty is closely correlated with income inequality, so similar arguments apply here. However, there’s much less discussion of the ways in which wealth inequality increases climate impacts. Do we really know how big the problem is, or how to fix it?

Those living in poverty are vulnerable to heatwave risks in more than one way. For example, someone might work in a job that exposes them to extreme heat with few opportunities to stay cool, returning on overheating public transport to an overcrowded, poorly insulated home in an area with little green space and security concerns that rule out opening windows at night. Air conditioning is unaffordable and other cooling measures might not be possible in rented accommodation.

To explore this issue in more depth, the Fairness Foundation, with the Future Threats Lab and the Policy Institute at King’s College London, ran a workshop for 25 experts in climate resilience, vulnerability and inequality. The workshop examined how wealth inequality in the UK affects our ability to respond to extreme heat events both by increasing vulnerability for particular groups and for society as a whole, and by undermining the effectiveness of heatwave adaptation measures.

Wealth inequality leaves us all more exposed
We identified three ways in which wealth inequality exacerbates the existing impacts of poverty and deprivation on heatwave risks, all of which arguably apply to other climate risks, such as flooding and wildfires.

First, wealth inequality increases the risks for those already vulnerable to extreme heat. We now live in a society in which what you own (or inherit) is more important than what you earn. For most people who own at least some wealth, much of it is held in the form of housing, which provides a measure of security. By contrast, people who don’t own housing are increasingly locked out not just of home ownership, but of financial security more broadly. Without wealth it is harder to escape poverty and to benefit from educational and career opportunities. Wealth inequality also makes our economy less productive and more extractive, undermining one key route for reducing poverty and vulnerability.

Second, wealth inequality affects political decisions that have an impact on heatwave risks. Policies that might reduce poverty and vulnerability, such as higher taxes on wealth or higher wages for those on low incomes, are often blocked by lobbying and media pushback, or by politicians who prioritise the interests of wealthy homeowners over those of people with less money who are less likely to vote. A similar dynamic makes it difficult for the state to raise enough revenue to invest in adaptation measures. And finally, this distortion of the political process undermines net zero, the key mitigation strategy. This hampers the government’s ability to act with the necessary speed and boldness in the face of opposition from wealthy vested interests, poorer people who understandably object to anything that increases the cost of living and authoritarian populist politicians who weaponise net zero for political ends.

Third, wealth inequality undermines social cohesion and resilience to extreme heat and other climate risks. Political decision making that benefits the elite rather than the public good makes it harder for institutions to effectively adapt to changing circumstances, while reducing public faith in politicians and increasing public discontent. Taken together, these dynamics increase the risks of societal unrest, while increasing the negative impacts of climate shocks on all of us, not just those who are most vulnerable.

We must tackle inequality at its source
Addressing the root causes of vulnerability is key; pursuing reactive measures to compensate for the impacts of wealth inequality will never be enough. We must reduce both the degree of wealth inequality and its wide ranging impacts, for example by increasing taxes on wealth, by reforming our labour market and housing market to share wealth more broadly at source and by investing in public services and a stronger social safety net.

Ultimately, the workshop underlined the difficulty, but also the importance, of having conversations about deep and complicated structural issues such as wealth inequality, when many of us are focused on their downstream impacts such as poverty and vulnerability. We very much hope that these conversations will continue.

The report that came out of the workshop has been published today and sets out the key evidence, a summary of the expert discussion and some lessons learned from running the event. The workshop followed a report that we published last October on the impacts of wealth inequality (and policy responses to it), and a workshop in November looking at the impacts of wealth inequality on societal resilience.