CARBON FOOTPRINT 

A Journal of People report

As oil prices rallied and investor confidence in excessively punished oil stocks returned, the world’s oil billionaires became richer in the first quarter of 2021, adding a combined net worth of $51 billion in the first quarter. The energy tycoons from the U.S. to Russia and India boosted their fortunes at the fastest rate of any group in the Bloomberg index.

According to the Bloomberg Billionaires Index, a daily ranking of the world’s richest people, U.S. oil tycoon Harold Hamm saw his net worth jump by $3.3 billion year to date to stand at $8.4 billion as of April 2.

Hamm, 75, who supported Donald Trump in the election, is one of the biggest gainers among energy billionaires.

Shares in Continental Resources that Hamm has founded have jumped by 59% year to date.

According to the index, Indian billionaire Gautam Adani with interests in ports, commodities, and power generation saw his net worth surge by $23.3 billion to $57.1 billion in the first quarter. This was the largest increase in a billionaire’s wealth so far this year anywhere in the world.

In total, the energy billionaires globally saw their combined net worth jump by around 10% in the first quarter, the highest growth in wealth of any group of billionaires in the index compiled by Bloomberg.

Investors have warmed up in recent months to the energy sector, which bore the brunt of last year’s shock of crashing oil prices and oil demand. The energy sector has been the top performer in the S&P 500 index year to date. Some exchange-traded funds (EFTs) tracking oil prices have surged since the start of 2021 as investors turned their attention to industries expected to benefit the most from the economic recovery. Energy is one of those, and analysts still see upsides for energy stocks and ETFs.

The report – “New Supercycle Makes Energy Billionaires Richer Globally” – by Alexander Sazonov, Devon Pendleton, and Jack Witzig (April 2, 2021, updated on April 2, 2021) said:

Leonid Mikhelson, 65, co-owner of the largest non-state owned natural-gas provider in Russia, has added $3.8 billion in 2021, threatening to take over the top spot among the nation’s richest.

The outlook for energy companies like Continental Resources — which struggled last year — has turned more positive, with Hamm’s shale-oil producer even expected to return to profitability.

At their meeting this week, OPEC+ members expressed confidence about the economic recovery and agreed to gradually increase oil production in the coming months. In February, JPMorgan Chase & Co. talked about a new supercycle for commodities, echoing similar comments from banks including Goldman Sachs Group Inc. Oil has climbed 66% in the past six months, and some bulls predict prices could once again top $100 a barrel by the end of next year.

“Higher oil prices translate directly into higher profits and increase these companies’ returns to their shareholders,” said Ryan Dusek, director at Opportune, a commodity risk-advisory group in Houston.

However, the International Energy Agency (IEA) does not see a supercycle in oil on the horizon amid plentiful supply and a large global spare capacity.

Still, the increasing focus on eco-friendly measures is threatening oil producers in the longer term. Biden wants to make the U.S. electricity grid carbon free by 2035, while China and the European Union aim to be carbon neutral by 2060 and 2050, respectively.

Bottom of Form

That is why some companies have been boosting their green ambitions. Adani, who spent two decades building an empire centered around coal, has plans to increase his firm’s renewable-energy capacity almost eightfold by 2025 and has gotten backing from big players including French oil giant Total SE. Mikhelson’s Novatek PJSC, whose Yamal LNG plant in Russia’s Arctic has been operating above capacity, wants to clean up its output even as it more than triples production by the end of the decade.

Even with the recent energy gains, technology remains the main creator of wealth globally, with the wealthiest entrepreneurs in that industry adding $87.6 billion so far this year. Larry Page and Sergey Brin, co-founders of Google parent Alphabet Inc., and Su Hua of Chinese video service Kuaishou Technology are among the top gainers after Adani.

A CNBC report (“Tesla, Elon Musk and beyond: The green companies making billionaires”, Feb 2 2021, updated Feb 3 2021) said:

Elon Musk, the CEO of Tesla, is the richest of the billionaires who owe their fortune to technologies that reduce carbon emissions in the atmosphere, according to an analysis by Bloomberg Green that was recently published.

A full $180.7 billion of Musk’s $199.2 billion net worth was deemed “green net worth” by Bloomberg.

Though Musk’s fortune is largely thanks to electric vehicle maker Tesla, some is from his holdings in SpaceX, and rockets emit carbon dioxide into the atmosphere when they blast off. For this reason, Musk’s wealth from SpaceX was not included in his “green” net worth.

Many of the rest of the so-called “green billionaires” are from China, according to Bloomberg Green, as China is a front-runner in the development and sale of technology to build clean energy economies. The list is also dominated by billionaires in the electric vehicle industry (and related component parts) and the solar energy industry.

The report said:

For the ranking, Bloomberg Green used the net worth of each individual based on the Bloomberg Billionaires Index on Jan. 28, and also calculated the portion of their wealth driven by businesses that reduce greenhouse gas emissions. (In some cases, those numbers are one in the same.)

Further, if several business leaders made their fortune from a particular company, the billionaires and their collective net worths are grouped together in one entry by Bloomberg Green. (For example, Zeng Yuqun, Huang Shilin, Pei Zhenhua and Li Ping owe their status as billionaires to CATL, the battery maker. Bloomberg Green did not delineate how much of the total $60.7 billion in wealth generated from CATL is owned by each stakeholder.)

Here are the top global green billionaires, according to Bloomberg Green. For the complete list, see Bloomberg Green’s ranking.

Elon Musk

Net worth: $199.2 billion

Green net worth: $180.7 billion

Country: U.S.

Company: Tesla, makes electric vehicles

Zeng Yuqun, Huang Shilin, Pei Zhenhua, Li Ping

Net worth: $61.6 billion

Green net worth: $ 60.7 billion

Country: China

Company: CATL, the world’s largest maker of electric vehicle batteries, supplies carmakers including Tesla, Toyota, BMW, Volvo

Li Zhenguo, Li Chunan, Li Xiyan, Zhong Baoshen

Net worth: $16.1 billion

Green net worth: $16.1 billion

Country: China

Company: Longi, the world’s largest manufacturer of “solar wafers,” which is what is used to build solar panels

Wang Chuanfu, Lv Xiangyang, Xia Zuoquan

Net worth: $ 33.5 billion

Green net worth: $13.4 billion

Country: China

Company: BYD, electric vehicle maker currently converting Shenzhen, China’s fleet of buses, taxis, and trucks into electric vehicles. Berkshire Hathaway, the investment company led by Warren Buffett, has owned a portion of BYD since 2008.

Liu Jincheng

Net worth: $10.9 billion

Green net worth: $10.9 billion

Country: China

Company: Eve Energy, a supplier to electric vehicle manufacturers, including clients such as Daimler, BMW, and Xpeng

The report added:

Other notable billionaires on the list include Anthony Pratt, the owner of Pratt Industries, and Aloys Wobben, the founder of Enercon. Pratt Industries is the largest privately held producer of 100% recycled paper and packages and is located in Georgia (though Pratt himself hails from Australia). Wobben built his first wind turbine in the 1970s and started the wind-turbine manufacturing company Enercon in 1984.

Climate tech making new, green fortunes is not likely to slow. A report released in September from PricewaterhouseCoopers found investment into the space is accelerating. In 2013, early-stage venture capital funding for climate tech funding was $418 million and in 2019, venture funding in climate tech was $16.1 billion, according to the report.

“The bottom line is that demand for climate tech is only going to accelerate. With global corporations, investors, and governments pledging to transition to net zero value chains, portfolios and jurisdictions, they are all betting on climate technology breakthroughs to be found, scaled and to transform industries and society,” co-authors Celine Herweijer and Azeem Azhar wrote in the PricewaterhouseCoopers. “Demand is not yet at a stampede but the market is heating up and it’s time for all stakeholders to help back the innovations the world really needs.”

Billionaires’ planes, mansions and superyachts

Richard Wilk , Distinguished Professor and Provost’s Professor of Anthropology; Director of the Open Anthropology Institute, Indiana University,Beatriz Barros , Ph.D. Candidate in Anthropology, Indiana University wrote in The Conversation (“Private planes, mansions and superyachts: What gives billionaires like Musk and Abramovich such a massive carbon footprint”, February 17, 2021):

Tesla’s Elon Musk and Amazon’s Jeff Bezos have been vying for the world’s richest person ranking all year after the former’s wealth soared a staggering US$160 billion in 2020, putting him briefly in the top spot.

Musk isn’t alone in seeing a significant increase in wealth during a year of pandemic, recession and death. Altogether, the world’s billionaires saw their wealth surge over $1.9 trillion in 2020, according to Forbes.

Those are astronomical numbers, and it is hard to get one’s head around them without some context. As anthropologists who study energy and consumer culture, we wanted to examine how all that wealth translated into consumption and the resulting carbon footprint.

Walking in a billionaire’s shoes

We found that billionaires have carbon footprints that can be thousands of times higher than those of average Americans.

The wealthy own yachts, planes and multiple mansions, all of which contribute greenhouse gases to the atmosphere. For example, a superyacht with a permanent crew, helicopter pad, submarines and pools emits about 7,020 tons of CO2 a year, according to our calculations, making it by the far worst asset to own from an environmental standpoint. Transportation and real estate make up the lion’s share of most people’s carbon footprint, so we focused on calculating those categories for each billionaire.

To pick a sample of billionaires, we started with the 2020 Forbes List of 2,095 billionaires. A random or representatives sample of billionaire carbon footprints is impossible because most wealthy people shy away from publicity, so we had to focus on those whose consumption is public knowledge. This excluded most of the superrich in Asia and the Middle East.

We combed 82 databases of public records to document billionaires’ houses, vehicles, aircraft and yachts. After an exhaustive search, we started with 20 well-known billionaires whose possessions we were able to ascertain, while trying to include some diversity in gender and geography. We have submitted our paper for peer review but plan to continue adding to our list.

We then used a wide range of sources, such as the U.S. Energy Information Administration and Carbon Footprint, to estimate the annual CO2 emissions of each house, aircraft, vehicle and yacht. In some cases we had to estimate the size of houses from satellite images or photos and the use of private aircraft and yachts by searching the popular press and drawing on other studies. Our results are based on analyzing typical use of each asset given its size and everything else we could learn.

We did not try to calculate each asset’s “embodied carbon” emissions – that is, how much CO2 is burned throughout the supply chain in making the product – or the emissions produced by their family, household employees or entourage. We also didn’t include the emissions of companies of which they own part or all, because that would have added another significant degree of complexity. For example, we did not calculate the emissions of Tesla or Amazon when calculating Musk’s or Bezos’ footprints.

In other words, these are all likely conservative estimates of how much they emit.

Your carbon footprint

To get a sense of perspective, let’s start with the carbon footprint of the average person.

Residents of the U.S., including billionaires, emitted about 15 tons of CO2 per person in 2018. The global average footprint is smaller, at just about 5 tons per person.

In contrast, the 20 people in our sample contributed an average of about 8,190 tons of CO2 in 2018. But some produced far more greenhouse gases than others.

The jet-setting billionaire

Roman Abramovich, who made most of his $19 billion fortune trading oil and gas, was the biggest polluter on our list. Outside of Russia, he is probably best known as the headline-grabbing owner of London’s Chelsea Football Club.

Abramovich cruises the Mediterranean in his superyacht, named the Eclipse, which at 162.5 meters bow to stern is the second-biggest in the world, rivaling some cruise ships. And he hops the globe on a custom-designed Boeing 767, which boasts a 30-seat dining room. He takes shorter trips in his Gulfstream G650 jet, one of his two helicopters or the submarine on his yacht.

He maintains homes in many countries, including a mansion in London’s Kensington Park Gardens, a chateau in Cap D’Antibes in France and a 28-hectare estate in St. Barts that once belonged to David Rockefeller. In 2018, he left the U.K. and settled in Israel, where he became a dual citizen and bought a home in 2020 for $64.5 million.

We estimate that he was responsible for at least 33,859 metric tons of CO2 emissions in 2018 – more than two-thirds from his yacht, which is always ready to use at a moment’s notice year-round.

Massive mansions and private jets

Bill Gates, currently the world’s fourth-richest person with $124 billion, is a “modest” polluter – by billionaire standards – and is typical of those who may not own a giant yacht but make up for it with private jets.

Co-founder of Microsoft, he retired in 2020 to manage the Bill and Melinda Gates Foundation, the world’s largest charity, with an endowment of $50 billion.

In the 1990s, Gates built Xanadu – named after the vast fictional estate in Orson Welles’ “Citizen Kane” – at a cost of $127 million in Medina, Washington. The giant home covers 6,131 square meters, with a 23-car garage, a 20-person cinema and 24 bathrooms. He also owns at least five other dwellings in Southern California, the San Juan Islands in Washington state, North Salem, New York, and New York City, as well as a horse farm, four private jets, a seaplane and “a collection” of helicopters.

We estimated his annual footprint at 7,493 metric tons of carbon, mostly from a lot of flying.

The environmentally minded tech CEO

South African-born Elon Musk, CEO of Tesla Motors and SpaceX, has a surprisingly low carbon footprint despite being the world’s second-richest person, with $177 billion – and he seems intent on setting an example for other billionaires.

He does not own a superyacht and says he doesn’t even take vacations.

We calculated a relatively modest carbon footprint for him in 2018, thanks to his eight houses and one private jet. This year, his carbon footprint would be even lower because in 2020 he sold all of his houses and promised to divest the rest of his worldly possessions.

While his personal carbon footprint is still hundreds of times higher than that of an average person, he demonstrates that the superrich still have choices to make and can indeed lower their environmental impact if they so choose.

His estimated footprint from the assets we looked at was 2,084 tons in 2018.

The value of naming and shaming

The aim of our ongoing research is to get people to think about the environmental burden of wealth.

While plenty of research has shown that rich countries and wealthy people produce far more than their share of greenhouse gas emissions, these studies can feel abstract and academic, making it harder to change this behavior.

We believe “shaming” – for lack of a better word – superrich people for their energy-intensive spending habits can have an important impact, revealing them as models of overconsumption that people should not emulate.

Newspapers, cities and local residents made an impact during the California droughts of 2014 and 2015 by “drought shaming” celebrities and others who were wasting water, seen in their continually green lawns. And the Swedes came up with a new term – “flygskam” or flying shame – to raise awareness about the climate impact of air travel.

Climate experts say that to have any hope of limiting global warming to 1.5 degrees Celsius above preindustrial levels, countries must cut their emissions in half by 2030 and eliminate them by 2050.

Asking average Americans to adopt less carbon-intensive lifestyles to achieve this goal can be galling and ineffective when it would take about 550 of their lifetimes to equal the carbon footprint of the average billionaire on our list.