Tax the Rich — and Save the Planet | Esther Duflo | TED

So most of the time when we think about climate change, we conjure these images of wildfires and storms and floods. But the reality is that temperature alone kills. And in particular, right here in Africa. We don't see it in the capital of France or the US, because it's mostly happening in poor countries, which are already hot, and where citizens don't have the protection of air conditioning or office jobs. By the best estimates, by the end of this century, in 2100, an extra six million people will die just because of increased temperature. And all of these deaths will take place in low- or middle-income countries. Every ton of carbon that we emit from the US, from India, from China, stays in the atmosphere for a very, very long time, contributes to the warming of the Earth and therefore, kills people. Now let's try, for the sake of concreteness, to put a dollar value on these lives cut short. Now I can see what you're thinking, the economist comes, you know, we cannot really price a life. The reality is, we are doing it all the time. As individuals, we are thinking about, you know, the probability of dying in a bicycle accident and the cost of a helmet and we kind of weigh one against the other. And our governments also do it. For example, when thinking about the cost of investment that can protect the lives of people on a highway, for example. Mexico, which has about the world's average income, uses a value of a statistical life of about two million dollars. So using this number of two million dollars for a value of a statistical life, as a benchmark, we calculated the dollar value of the life lost because of emissions. And the costs are staggering. Every year, the greenhouse gas emissions of the OECD inflict a cost of 1.7 trillion dollars -- with a T -- on low- and middle-income countries. And the costs are the largest in the countries that are the poorest. Take Niger, a country where the GDP is just shy of 650 dollars a year. The yearly damages from the OECD emissions in Niger are 9,000 dollars. Meanwhile, from COP to COP, rich countries are nickel and diming the poor countries for the climate money, for mitigation, for adaptation. We are supposed to be on the road map from Baku to Belem from 300 billion to 1.3 trillion, but it is likely to be a road to nowhere if we continue with buzzwords and with hairy schemes. The money is difficult to raise. It's even harder to spend. Climate negotiators from India, from Africa, are so tired to negotiate with dozens of outfits to access money that should legitimately be theirs. So there has to be a better way. And I'm here to tell you one better way. So first of all, how about we stop beating around the bush and try to raise 1.7 trillion dollars for our moral debt to the poor countries? (Applause) Can we do that? Well, yes, we can. But let's face it, there is no money to be made saving the life of an old woman in Pakistan. And this is too much money for philanthropy. So the money has to come from publicly-funded international redistribution. Now you're looking at me and saying, "She probably was under the rock the last few months." Every country in the north, starting from the US, but not ending there, is cutting international commitment, not adding to them. So how can I go and say, well, how about 1.7 trillion of new money? So we have to take the money where it is, which is in the bank accounts of the richest people on the planet and the largest multinational corporations. Now -- (Cheers and applause) Before you think I'm, you know, a dangerous alien, I'm not talking about expropriation. The reality is that the richest people on the planet

do not pay their fair share in taxes. (Applause) Warren Buffett, who is no communist, quipped that he paid less taxes than his assistant. And it's true. But it's not just in the US. Worldwide, rich people have all sorts of perfectly legal maneuvers to avoid paying the same taxes as everybody else. Proportionately, they pay less taxes than anybody in this room, probably, unless you're a billionaire. (Laughter) A tax on the wealth of the 3,000 richest people in the world of about three percent a year would raise 400 billion dollars. A slight increase in the minimum tax on multinational corporations from 15 to 21 percent would raise 300 billion dollars. I'm not dreaming, because the tax on international corporations, it exists already. Twenty years ago, it would have seemed crazy to think that we could have an agreement, worldwide, to have such a tax. And yet, in 2021, 120 countries signed a treaty, and it's already implemented by 40 countries. And what is nice about it is that it does not require every single country to participate. If the US, for example, doesn't participate, the way the rules are made, France and Germany, for example, can tax the US companies on their sales in France or Germany to make sure that overall, they pay 15 percent on their profits. We could do just the same for the billionaires. France and Germany could send them a tax bill, say, to Jeff Bezos, in the unlikely event that Jeff Bezos doesn't pay his taxes, they could start levying money on Amazon's tax in France. So this is feasible. This is already in the conversation. Brazil put it on the map during their presidency of the G20. It made it to the final declaration with support from many countries, including France, for example, and Spain, and with support from some of the Brazilian richest billionaires. Thank you, Neto Setubal. Now it has also a lot of support. Seventy percent of Americans and 80 percent of Europeans are in support of a tax on the wealthiest people to help the poorest people cope with climate change. But some people are a little worried that what would we do with the money if we managed to raise it? The climate activists are worried about international institutions hogging it, and the rich countries are worried about developing countries' governments using it for their own purposes. So here is a simple solution. Send it straight to people. (Applause) We know how to do it. The infrastructure is already there. Chief of all, here, in Africa, where almost everyone has a mobile money account already. There are more than 100 randomized controlled trials of cash transfer programs that show that people use the money well. And moreover, the money not only is used well, but it also helps resilience. For example, in Zambia, when people received about 12 dollars a month in a support income, not only did it increase their consumption on average, but it removed the ups and downs that they get with drought and flood usually. Here in Kenya, people used a universal basic income that they had to finance, first, a better roof over their head, and second, solar panels to power a fan, a pump or a cell phone, thus increasing resilience and increasing productivity. For some countries which are very poor, there is enough damage money to fund a UBI for everyone such that nobody has to live under the poverty line. For richer middle-income countries, there is enough to fund a sort of insurance where no one needs to work when it's 35 degrees outside. Finding ways to reliably collect money to pay for our moral debt to the world's poorest citizens would do a lot to repair the trust between the West and the rest. And it is badly needed, because the reality is that the future of climate mitigation is in the countries that are today poor. Even if the OECD, even if the US, Europe managed to reduce their emissions, unlike the countries of Africa, India, etc. don't get into a crazy trajectory, the climate fight will be lost. So the future is here. And it can only be done if there is trust. So what we need is really a new grand bargain about climate mitigation and adaptation.

What we need is a situation where every poor country is entitled to the damages that our continued emissions impose on them, and in exchange of this money for their citizens, they commit to forceful climate action, including potentially carbon-pricing mechanism. It's urgent, it's feasible, it's just. So all of you here, especially any billionaire, either in the room or watching me, please stand up and demand a billionaire tax for climate justice. Thank you. (Cheers and applause)