Eco-Justice, Economic Inequality and the Gini Coefficient: Integrating Social and Ecological Concerns

by A. Karim Ahmed, Ph.d

January 8, 2018

Although there are various different ways to consider Eco-justice issues, a remarkably simple means is to look at it through the lens of global climate change. As numerous studies have shown, the impact of climate change from emission of greenhouse gases will disproportionately affect the lives of those who live in low-income, developing countries, while the poor and under-served communities in the United States will also feel its greatest brunt. A recent report of a study carried out by the United Nations, The World Economic and Social Survey, 2016: Climate Change Resilience—an Opportunity for Reducing Inequalities, came to this troubling conclusion:

While there is considerable anecdotal evidence that the poor and the vulnerable suffer greater harm from climate-related disasters, the report determined that much of the harm is not by accident, but that it is due to the failure of governments to close the development gaps that leave large population groups at risk. In the past 20 years, 4.2 billion people have been affected by weather-related disasters, including a significant loss of lives. Developing countries are the most affected by climate change impacts. Low-income countries suffered the greatest losses, including economic costs estimated at 5 per cent of GDP.

(United Nations:  http://www.un.org/sustainabledevelopment/blog/2016/10/report-inequalities-  exacerbate-climate-impacts-on-poor/)

At present, China is the biggest greenhouse gas emitter, accounting for 25 % of global emissions, followed by United States (14%) and the European Union (10%)  What is particularly egregious is the lopsided nature of the global greenhouse emissions inventory. The World Resources Institute’s data bank analysis of greenhouse gas emissions states the following:

The top 10 emitters contribute 72 percent of global greenhouse gas emissions (excluding land use change and forestry). On the other hand, the lowest 100 emitters contribute less than 3 percent. While universal climate action is necessary, significant mitigation actions are needed by the largest emitters, taking into account that they have different capacities to do so.

(World Resources Institute: http://www.wri.org/blog/2017/04/interactive-chart-explains-worlds-top-10-emitters-and-how-theyve-changed).

It is important to note that when greenhouse gas emissions are viewed on a per capita basis, each person in the United States produces over two-fold greater amount of carbon-related emissions than those living in China (16.2 versus 7.5 metric tons per capita in 2014). Historically, the United States has contributed the largest cumulative amount of greenhouse gases to the global atmosphere, accounting for over a quarter (27%) of all carbon dioxide emissions since the mid-19th century.

Graph 1

Despite its past and present responsibility for significantly affecting the global environment, the current US administration last June abruptly walked away from its political, societal and ethical obligations made under the Paris Agreement on climate change (signed by 195 nations), one that had been tirelessly negotiated and agreed upon through the capable leadership of former President Barack Obama. As reported in the June 6, 2017 edition of the New York Times:

“It is immoral,” said Mohamed Adow, who grew up herding livestock in Kenya and now works in London as a leader on climate issues for Christian Aid, a relief and development group. “The countries that have done the least to cause the problem are suffering first and worst.”

(New York Times: https://www.nytimes.com/interactive/2017/06/01/climate/us-biggest-carbon-polluter-in-history-will-it-walk-away-from-the-paris-climate-deal.html?_r=0).

Let’s now view the question of Eco-justice from the perspective of economic inequality. In 2013, the French economist, Thomas Piketty, published his monumental treatise, Capital in the 21st Century (English translation, Harvard University Press, 2014), which to everyone’s surprise became an instant bestseller. This 696-page volume hit the book market at the right moment – it was a detailed historical study of economic inequality between the haves and have-nots in our society, at a time when this issue had gained the attention of the public. Piketty provided the attentive reader with a simple mathematical formula: in recent years, r > g, where r, the rate of return on capital, is greater than g, the rate of economic growth. Since 1900, he points out, the growth of wealth among the top 1% rich – whose essential income is largely derived from invested capital – exceeded the overall prosperity of the larger community, as measured by economic productivity in a number of representative countries. Piketty considered this tendency towards wealth disparity in a population to be untenable, posing social tension and economic instability in an increasingly unequal globalized society.

Five years later, the situation of economic inequality is even more disturbing and grave, especially in the United States. Under its Republican leadership, the US Congress narrowly passed this past December a “tax reform” bill that would greatly reward the excessively well-off, exacerbating an income and wealth gap that has only grown larger in recent years in the country. Last year, the Washington-based Center for Economic and Policy Research published a study showing the contrary trends of US pre-tax income between top 1% and bottom 50% of income earners between 1962 and 2014 (see chart below). The authors of the study state: “It’s a tale of two countries. For the 117 million U.S. adults in the bottom half of the income distribution, growth has been nonexistent for a generation, while at the top of the ladder it has been extraordinarily strong.” (Center for Economic and Policy Research: https://www.marketwatch.com/story/the-growing-divide-between-the-haves-and-the-have-nots-in-one-stunning-chart-2017-03-30)

Graph 3

There is another quantitative measure of income and wealth inequality that is employed by many development economists and social planners around the globe. It is called the Gini coefficient. Developed by the Italian statistician, Corrado Gini, in the early part of the last century, this index measures income and wealth disparity of a selected population. The Gini coefficient ranges from 0 to 1, with 0 and 1 representing a society of perfect equality and perfect inequality, respectively.

Where does the United States stand on such a widely used index of economic inequality? Among the 10 richest economies, the United States has the highest income-based Gini coefficient, 0.38, followed by United Kingdom, Japan and Australia, ranging between 0.334 and 0.341 (Scandinavian countries typically have income-based Gini coefficients hovering around 0.25). In other words, based on this economic index, there is greater disparity in income among the US population than other affluent countries in different regions of the globe (Vox: https://www.vox.com/cards/income-inequality/how-economically-unequal-is-the-united-states

Graph 4

In addition, income inequality in the United States in the first decade of the 21st century has reached new heights of disparity: the top decile earned around 45% to 50% of the national income. As can be observed below, such disparate proportion in income distribution had not been seen in the US since the Great Depression of the 1930s.

Graph 5

The second index of economic inequality is measured by wealth-based Gini coefficient, which is calculated by estimating an individual’s net worth, such as personal savings, investments, cash, real estate possessions and other tangible assets. In this instance, United States has the dubious honor of claiming the highest wealth-based Gini coefficient, 0.805, being the “richest, and most unequal, country” in the world, according to Fortune magazine. Among the top ten countries are three European countries (United Kingdom, Austria and Germany), four Latin American countries (Colombia, Chile, Brazil and Mexico) and one Asian country (Indonesia), with wealth-based Gini coefficients ranging between 0.70 and 0.79. (Fortune, September 30, 2015: http://fortune.com/2015/09/30/america-wealth-inequality/).

In terms of overall national wealth, the United States is once again the global winner. At present, with a population of 324 million, United States’ inhabitants possess a net national wealth totaling $93.5 trillion or 33.4% of total global wealth ($280 trillion). Thus, with only 4.6% of the world’s population, the United States owns a hefty one-third of global wealth. The nearest competitors are China and Japan, with national wealth of $29.0 trillion (10.3%) and $23.6 trillion (8.4%), respectively. Moreover, since the 2008 global financial crisis, the United States has seen an “unbroken spell of gains” in national wealth:

Comparing wealth gains across countries, the United States is an unquestionable leader. The country continued its remarkable unbroken spell of gains after the financial crisis and added USD 8.5 trillion to the stock of global wealth. In other words, the US generated more than half of the total global wealth aggregation of USD 16.7 trillion of the past 12 months.

(Credit Suisse, Global Wealth Report, 2017:  https://www.credit-suisse.com/corporate/en/research/research-institute/global-wealth-report.html)

So, where do all these considerations leave us in this country?

  • To begin with, not only is the United States the world’s richest country by a fairly large margin, it is also among the most unequal economically. With the newly passed Congressional tax legislation, economic disparity that already favors the wealthy will only grow wider in the coming years. In the meantime, wage stagnation of past several decades leaves the less affluent and the poor fighting and scraping for measly crumbs from the master’s table. This state of affairs, in the long term, is simply unsustainable. It certainly does not bode well for the future social and economic viability of the country.
  • Secondly, United States inhabitants produce the highest amount of greenhouse gases at a personal level – it releases more than twice as much per person than China, which leads the world in total carbon dioxide emissions. Inordinate consumption of material goods, energy inefficiency and dependence on fossil fuel combustion continues to plague a poorly informed and largely uncaring society in the United States. In this instance, its present negligence and willful indifference to address climate change not only affects its own inhabitants, it adversely impacts the stability of the globe as a whole.

At first glance, global climate change and economic inequality may appear to be completely unrelated societal problems, requiring entirely different approaches and remedies to tackle them. Yet, consider these two salient features: (a) people in affluent societies consume more goods, services, food, water and energy than those who reside in less developed countries, (b) rich people thus have an enormously higher “ecological footprint” than poor and marginalized inhabitants in all regions of the world. This results in an ongoing moral crisis – the rich get richer, living in exclusive and luxurious circumstances; the poor are left far behind, while being most affected by a rapidly deteriorating and unlivable environment.

Hence, there is a crying need to integrate these two areas of concern: the social and the ecological – one dealing with income disparity, poverty eradication and ensuring human dignity, and the other related to safeguarding the natural environment from unsustainable and negligent human activity. This combined, richly-merged and enlightened approach is captured by the concept of Eco-Justice! Such an ethical perspective was well articulated by the Presbyterian Church’s education and policy director, Dieter Hessel, in an engaging article on the Yale Forum on Religion and Ecology (2007):

Ecological responsibility in linkage with social justice is what the world needs now. Healthy earth community requires advocacy and action on urgent environmental issues in ways that connect with  struggles for social and economic justice. Eco-justice envisions and values ecology and justice together,  since there will be little environmental health without socio-economic justice, and vice versa.

(The Yale Forum on Religion and Ecology: http://fore.yale.edu/disciplines/ethics/eco-justice/

Finally, in his historically groundbreaking and remarkable Encyclical Letter on the Environment, Laudato Si’ (“On Care for Our Common Home”), Pope Francis spoke in deeply eloquent and meaningful terms about integrating social and ecological issues as a “complex crisis which is both social and environmental”, i.e., by combating poverty, restoring dignity and protecting nature at the same time and not always dealt apart as is the present approach. It’s the message that needs the strongest support and long-term commitment by policy makers, private sector leaders and public interest activists alike (Pope Francis, Laudato Si’: https://w2.vatican.va/content/dam/francesco/pdf/encyclicals/documents/papa-francesco_20150524_enciclica-laudato-si_en.pdf).

It needs to be said that, generally speaking, there is little in the way of clear awareness of problems which especially affect the excluded. Yet they are the majority of the planet’s popu­lation, billions of people. These days, they are mentioned in international political and econom­ic discussions, but one often has the  impression that their problems are brought up as an after­thought, a question which gets added almost out of duty or in a tangential way, if not treat­ed merely as collateral damage. Indeed, when all is said and  done, they frequently remain at the bottom of the pile. . .

Today, however, we have to realize that a true ecological approach always becomes a so­cial approach; it must integrate questions of jus­tice in debates on the environment, so as to hear both the cry of the earth and the cry of the poor. . .

We are faced not with two separate crises, one environmental and the other social, but rather with one complex crisis which is both social and environmental.  Strategies for a solution demand an integrated  approach to com­bating poverty, restoring dignity to the excluded, and at the same time protecting nature.