When someone shifts a cost onto people who had no say in it, economists call that an externality, and the standard remedy is to make whoever causes it pay. Pollution is the textbook case. A new study in Communications Sustainability by Inge Schrijver, Rutger Hoekstra and Paul Behrens measures one large instance of it: the environmental damage caused by the world’s top 10% of consumers, the decile that spends the most.
The authors put the annual damage from the global top decile at $1.7 to $5.7 trillion, or $2,300 to $7,500 per person, in 2017 dollars. For a top-10% American consumer the estimate runs from $19,000 to $63,000 a year, or 6 to 20 percent of income, depending on how the damage is priced. That global total is on the order of the world’s climate and biodiversity financing gaps combined, the shortfalls that international negotiations have spent years failing to close.
What the Study Counts
Their method is relatively simple. The authors take published estimates of the top decile’s footprint in four areas of environmental impact — climate, biodiversity, the nitrogen and phosphorus cycles, freshwater — and multiply each by a price drawn from the Environmental Prices Handbook, a European reference that assigns monetary values to environmental harm.
The largest single component is biodiversity loss, at 47 to 56 percent of the total. Climate change is second, at 36 to 45 percent. Nitrogen accounts for 6 to 8 percent, and water and phosphorus for under 2 percent each. That biodiversity rather than carbon dominates the total is the paper’s most notable result, but also the one with the greatest degree of uncertainty.
How Solid Is the Number?
Biodiversity is the hardest of these damages to price. It has no market value, so the authors derive one from willingness-to-pay surveys, which mostly capture recreational value, scaled from European ecosystems to the rest of the world.
The pricing problem does not affect the core finding. Stephen Polasky, an environmental economist at the University of Minnesota and a leading figure in natural-capital valuation, reviewed the paper at my request. He confirmed that the biodiversity pricing is highly uncertain, which the paper itself acknowledges, but told me its “main conclusions are correct, namely that the top 10% of global consumers are causing damages for which broader society bears the costs.”
The paper’s own sensitivity test bears this out. Even pairing the lowest biodiversity price with the highest prices for everything else, biodiversity still accounts for 27 percent of the global damage. And because that price captures only recreational value, it misses most of what intact ecosystems are worth. If anything, that points to an underestimate. The precise value is uncertain. The conclusion that the damage is large is not.
Does Pricing Nature Commodify It?
A common objection to this kind of work is that assigning nature a price treats it as a commodity, something that can be traded away once paid for. The authors address this directly. Following economist Robert Costanza and colleagues, they argue that pricing a resource is not the same as putting it up for sale. A price records what something is worth to society. It does not authorize a transaction, and paying for environmental damage would neither license it nor undo it.
The estimate is also conservative in scope. It counts only consumption. About half of the carbon emissions associated with the top 10% come from investments rather than from what they buy, and the paper leaves those out. The full attributable damage is therefore likely larger than the published figure.
Could the Damage Be Taxed?
The authors frame that estimated cost as potential revenue under the polluter-pays principle, money that could fund a transition away from the damage. They benchmark it against a $675 billion biodiversity financing gap for 2030 and a $993 billion annual climate goal set for 2035 at COP30. Raising it would mean taxing the wealthiest consumers, who also have the most capacity to resist.
Thomas Sterner, an environmental economist at the University of Gothenburg who studies environmental taxation, endorses the analysis but doubts that it will be politically feasible. “We live in a period where even the most obvious of taxes, gasoline taxes, are being attacked by populist parties and fossil lobbies with great success,” he told me. He notes that European fuel taxes, which he calls the planet’s best example of successful climate policy, are now in some places being repealed. Taxing consumption broadly is politically hard, and taxing only the wealthy has its own difficulties: “Trying to tax only the rich might be fraught with practical issues of its own,” Sterner warned.
The study does not settle how any of this revenue would be raised. Its contribution is narrower. The environmental cost of the world’s richest consumers, long treated as effectively zero, now has an explicit estimate. The estimate is uncertain, and its authors say so. It is more useful than the zero it replaces.
