yachts exempt from carbon tax

• Transportation

Private Jet Owners Are Emitting More Carbon and Paying Fewer Taxes Than the Rest of Us

T hose who can afford to own a private jet make up just 0.0008% of the global population. Yet, on a per-passenger basis, private jets generate 10 times more carbon emissions than commercial airlines.

Now, a new study by the D.C.-based non-profit Institute for Policy Studies and the non-partisan national organization Patriotic Millionaires shows the amount of taxes private-jet users pay doesn’t match up with the scale of impact this ultra-wealthy luxury is having on our planet.

Roughly one out of every six flights managed by the Federal Aviation Administration (FAA) is a private-jet flight. Yet private jets only contribute 2% of all taxes that fund the FAA. For the average flier, these appear as a 7.5% charge on the price of the ticket plus a passenger facility fee of up to $4.50. Private-jet users meanwhile only pay a fuel surcharge tax of roughly $0.22 per gallon. (Fuel taxes for commercial flights are another item often added to the ticket cost, but they vary by airline and route.) Combined, these taxes help pay for things that everyone benefits from, like maintenance of airports runways and staffing air traffic control.

Read more: From Private Jets to Superyachts, Here’s the Climate Impact of the Rich and Famous

Private air travel has been booming in popularity since the pandemic began. The use of private jets has grown by 20% since 2020, with related emissions increasing by more than 23% . Before the pandemic, the FAA tracked 4.8 million domestic and international private-jet flights in 2007. By 2022, that had grown to 5.3 million. (Most of these are domestic; in 2022, flights within the U.S. made up 85% of all private aircraft trips.)

As this trend continues, inequality will grow too—unless, as the authors of the new report argue, we rethink how jetsetters are taxed, and what sorts of concessions we allow them. That’s already happening in some places outside the U.S.; Schiphol Airport, the largest in the Netherlands, said recently that it plans to ban private jets from using its runways .

Read more: Why You Should Care About Celebrities’ Climate Hypocrisy

There are a few ways to reimagine air travel taxes. As the authors of the new study suggest, a “transfer fee” could be imposed on the sale of a jet, whether new or pre-owned. This is something Canada did last year , setting a 10% luxury tax on the purchase of new aircraft manufactured after 2018 and valued at over $74,000 (CAD$100,000). (It also did the same for yachts and luxury cars.)

Other researchers have proposed a “frequent flying levy” —a tax that increases with each additional flight you take on an annual basis after your first (which wouldn’t be taxed). The more you fly, the more you pay. Rather than a flat climate tax, this structure better targets the subset of people who contribute most to the emissions impact of air travel.

However you think about it, the underlying assumption is the same: If the amount a person paid to fly more accurately reflected the environmental impact of their flight, maybe that would shift how people think about the way they travel, making less-polluting options more affordable. And as the authors of this week’s study write, “any taxes imposed will not affect 99% of us and the revenue raised could be used to ensure we have a more environmentally sustainable planet.”

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HABITS OF THE RICH

Offshore gurus help rich avoid taxes on jets and yachts.

Buying a $27-million private jet or plush mega-yacht means millions in sales taxes — unless you know the right pro.

Formula One auto racing star Lewis Hamilton got a new luxury jet, a $27 million candy-apple-red Bombardier Challenger 605 with Armani curtains. He also got a refund on the value-added tax.

And the lawyers at Appleby , an elite law firm founded in Bermuda, were there to help.

They teamed with the London-based accounting giant Ernst & Young to craft an arcane plan to sidestep the VAT, a consumption tax charged in Europe on everything from socks to cars. One of the conditions: Hamilton’s inaugural flight would have to touch down on the Isle of Man, the British crown dependency in the Irish Sea known for its lenient tax treatment of the world’s super-rich.

“This will involve a short stay, normally less than 2 hours,” Appleby said in a written explanation of the tax-avoidance strategy .

The four-time Formula One world champion was up to the challenge. He and his girlfriend, Pussycat Dolls pop star Nicole Scherzinger, planned to make a layover on the Isle of Man on their first time out to Europe on his new jet in January 2013, according to an itinerary sent to Appleby.

Whether Hamilton actually made the trip could not be learned. But in the end, he did pick up a $5.2 million VAT refund, according to secret documents reviewed by the International Consortium of Investigative Journalists, the BBC, The Guardian, and more than 90 other media partners.

The documents come from the internal files of offshore law firm Appleby and corporate services provider Estera, two businesses that operated together under the Appleby name until Estera became independent in 2016. The files, which are now called the Paradise Papers , were originally leaked to the German newspaper Süddeutsche Zeitung and shared with the International Consortium of Investigative Journalists.

In a statement to The Guardian, Hamilton’s lawyers said that the race car driver has a set of professionals in place who run most aspects of his business operations on his behalf and that no subterfuge or improper levels of secrecy have been put in place.

Shielding offshore trillions

The episode opens a window onto a low-profile network of lawyers, bankers, accountants, financial advisers and other professionals who operate offshore in the gray international area between tax jurisdictions. This global system exists largely to shield assets from taxes, creditors and competitors and has been instrumental in luring trillions of dollars offshore, leaving other taxpayers to make up the difference.

An offshore subspecialty that handles private jets and mega-yachts has prospered even as concerns about the wealth and privileges of the global 1 percent have grown.

The yacht-and-jet offshoring business extends far beyond secretive tax havens and discreet law firms. It has involved U.S. banking giants such as Wells Fargo & Co., respected regional banks such as the Bank of Utah, and U.S. legal powerhouses such as Akin Gump Strauss Hauer & Feld. The banks have helped create trusts that have enabled otherwise ineligible foreigners to register jets in the United States, which can increase their resale value. Akin Gump helped an Arab monarchy qualify for a VAT refund on private jets it wanted to turn into spy planes. Ernst & Young worked with Appleby on a range of tax-related matters.

A spokeswoman for Wells Fargo said the bank is in the process of exiting the business of acting as trustee for foreign owners of non-commercial jets. “As a regular course of business, Wells Fargo evaluates its products and services to make sure we deliver the best experience for our customers while maintaining appropriate risk levels,” she said.

Alex Cobham, chief executive of Tax Justice Network, a U.K.-headquartered nonprofit that fights financial secrecy, said offshore ownership of luxury planes and boats is “a symptom of global inequalities.” These arrangements allow the rich to exploit the weaknesses of the international tax system through “hidden ownership and circular financing schemes,” he said.

Leaked documents from Appleby and other sources reveal a long list of rich and super-rich individuals who rely on offshore operatives to handle the tax issues and other challenges involved in owning luxury planes and boats. Among them: celebrities like Hamilton; the crown prince of Saudi Arabia and other royalty; and politicians and figures connected to them, such as Russian President Vladimir Putin’s friends the billionaire brothers Arkady and Boris Rotenberg.

U.S. President Donald Trump, too, has taken advantage of offshore arrangements to organize ownership of private aircraft.

Leaked documents from the Bermuda corporate registry, not related to Appleby, list Trump as the owner of a Bermuda shell company that in turn owned a Boeing 727 jet used by Trump, who put it up for sale in 2009. Trump disclosed the company, D.J. Aerospace (Bermuda) Ltd., in his election disclosure filings. Trump’s offshore ownership of the jet has been previously reported. The jet is now owned by Weststar Aviation, a Malaysian company.

The Wall Street Journal reported in December that another Trump aircraft – a Boeing 757-200 he used during his presidential campaign – is controlled through a complex ownership and leasing setup involving limited liability companies; the arrangement could have enabled Trump to avoid paying $3.1 million in New York sales tax upfront and to instead pay it in installments spread over many years.

Trump and Rotenberg did not respond to requests for comment from ICIJ and partners.

Isle of riches

A craggy, rain-swept island otherwise known for its tailless Manx cats, the Isle of Man has long been a key outpost in the offshore industry, thanks in large part to its close but ambiguous relationship with the United Kingdom.

It has a “partnership” with the U.K., but it controls its own domestic policy — and has turned itself into a hub in the global financial system by offering low tax rates and tolerating high levels of corporate secrecy. It didn’t have an aircraft registry until 2007 but now maintains the largest offshore plane registry in the world, with roughly 1,000 private airplanes, each generating fees for the island’s financial services industry, the Isle of Man’s biggest employer.

The registry’s growth is in part due to the Isle of Man’s lenient VAT policy and tolerance for arrangements that exploit it. Appleby alone has been responsible for creating companies that owned at least 48 private jets with an average price of $33.9 million, according to an analysis of the law firm’s internal documents by the BBC and ICIJ.

Appleby also has a big business in registering yachts, particularly in the Cayman Islands, where it has set up offshore companies that claim ownership of dozens of yachts and ships. The owners of these vessels include the royal families of the United Arab Emirates and Saudi Arabia, Russian fertilizer billionaire Andrey Guryev and Microsoft co-founder Paul Allen. Guryev did not respond to request for comment. An Allen representative declined to comment.

On the Isle of Man, Appleby has drawn big-name customers by creating offshore arrangements that push the boundaries of EU tax rules, according to international tax experts contacted by ICIJ and its partners the BBC and The Guardian.

For instance, the Isle of Man grants, on a case-by-case basis, pre-approved exemptions that are not subject to public scrutiny. EU member states could choose to offer similar exemptions to the super-rich, but political pressures constrain them from doing so.

In 2011, under pressure from the European Union, the United Kingdom tightened a rule that had allowed owners to avoid the VAT if the aircraft weighed more than 8,000 kilograms.

That created an opening for firms on the the Isle of Man, which has access to the giant EU market through its relationship with the U.K., to attract even more offshore business.

Some of the complex Isle of Man arrangements don’t appear to meet the criteria set out in the EU’s VAT-exemption language, tax experts said. EU language, for instance, requires companies to be real operating businesses and not “letterbox” companies. “It doesn’t pass the smell test,” said Maria Martinez, a former international tax attorney now with the antipoverty nonprofit Oxfam America, referring to the Isle of Man’s handling of many tax arrangements.

After ICIJ partners sent questions about the arrangements to the Isle of Man’s government, its chief minister, Howard Quayle, called an October 23 press conference and declared: “We have found no evidence of wrongdoing or reason to believe that our customs and excise division has been involved in a mistaken refunding of VAT .” He added, “The Isle of Man is not a place that welcomes those seeking to evade or abusively avoid taxes.”

At the same time, however, Quayle announced that he had invited the U.K. treasury to conduct an assessment of the Isle’s jet-registration business.

And in response to The Guardian and ICIJ questions, the government disclosed that VAT refunds for 231 jets registered on the island had totaled more than $1 billion. Without the Isle of Man structures, much of that revenue would have gone to EU countries where the planes would have been registered.

How Lewis Hamilton’s jet deal flew

The exemption that Appleby helped secure for Formula One champ Hamilton’s jet, for instance, shows how expansively the Isle of Man interprets EU aircraft rules.

Appleby began with a pitch to Hamilton and his representatives: “By working with Ernst & Young LLC as a VAT specialist and through the use of their dedicated VAT Deferment Account together with appropriate structuring, the need to fund the VAT would not be required.”

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Officials from Ernst & Young and Appleby, and other advisers, exchanged emails and held conference calls to puzzle over how to deal with EU rules, which allow VAT refunds for private planes only when they’re used for business purposes by real companies that operate in the EU.

Appleby set up an Isle of Man company called Stealth (IOM) Ltd. to lease the jet from Hamilton’s British Virgin Islands holding company, Stealth Aviation Ltd., and import the plane to the Isle of Man and, thus, thanks to the island’s relationship with the U.K., into the EU. The letterbox company then subleased the plane to TAG Aviation Ltd., a third-party jet operator in England.

But EU rules require that the company that imports the plane be a real – not a shell – company that actually operates in the EU. Only “fixed establishments” are eligible, and a fixed establishment is defined as having a “sufficient degree of permanence and a suitable structure in terms of human and technical resources to enable it to provide the services which it supplies,” according to EU rules.

Stealth (IOM) Ltd. has no employees. Knock on the door at 33-37 Athol St. in Douglas, the capital, and you’ll find an Appleby office that also serves as headquarters for more than 1,100 companies and trusts. Stealth (IOM) has no staff and no building of its own. It has a “brass-plate” address and a single director, General Controllers Ltd. – another Appleby shell company used as a “nominee director,” a stand-in for the controlling parties.

Although the importing firm clearly exists only on paper, Isle of Man officials pre-approved Hamilton’s arrangement. After that, all that was required was a layover on the Isle of Man for customs to sign the jet’s paperwork allowing the VAT refund. Neither Hamilton nor his plane ever had to visit the island again, even though the firm that imported it is incorporated there.

Appleby sold its Isle of Man jet operation and the rest of its fiduciary business to the unit’s managers in early 2016; the new company took the name Estera.

In their statement, Hamilton’s lawyers said Stealth (IOM) Ltd. is not a shell company and was formed to run a leasing business and hire the aircraft on a long-term basis at a commercial rate. They said the company made all necessary disclosures to Isle of Man officials, who approved the approach.

The lawyers said that reducing taxes was not the motive for the arrangements, but even if it had been, it is lawful to lease, rather than buy, to reduce the VAT.

They added that it was not correct that Hamilton had paid no VAT on any of the arrangements.

In a separate statement, Ernst & Young said commercial leasing arrangements such as those used by Hamilton constitute entirely legitimate commercial practice. The accounting firm said that as a commercial business, the import company is entitled to reclaim the VAT incurred on its business asset against the VAT which it is due to pay on the import of the aircraft into the European Union if the aircraft is being used wholly or predominantly for business purposes by the end user.

It said the relevant consideration for such arrangements is where the aircraft flies (not where the aircraft is bought, leased to or leased from). Ernst & Young said it advises clients they should consider whether VAT needs to be charged for all flights within EU airspace and added that it is not able or required to monitor a client’s use of an aircraft on a day to day basis following registration.

“All our advice, whether in planning or compliance, is based on our knowledge of tax law and providing transparency to tax authorities,” Ernst & Young said in the statement.

It could not be learned whether any Hamilton entities paid VAT on trips within the EU.

EU rules forbid VAT refunds for personal jet purchases and imports. Hamilton, however, received a refund even though he had planned to use the plane for non-business purposes one-third of the time, according to draft leases in the Appleby files. And his social media feeds and website often flaunt his private use of the plane. One video, uploaded to Hamilton’s YouTube account, shows him, his dog Coco, and some friends aboard the plane, followed by scenes of him cavorting on four-wheeled dirt bikes in Colorado and dancing and drinking at a 2015 festival in Barbados.

The jet was used primarily for business purposes, Hamilton’s lawyers said, adding that on the few occasions that it was used for private purposes, a proper hire charge was invoiced and paid.

An unsigned statement to the Guardian on behalf of the Isle of Man government, said the government is committed to enforcing tax rules. “Whilst it is clear that no jurisdiction in the world could ever guarantee that instances of evasion, abusive tax avoidance and error do not occur on an individual basis, the Isle of Man is committed to ensuring that it is not used by those seeking to evade taxes or to abusively avoid taxes,” the statement said.

The statement added that in October 2016 the government began “to review the accuracy and efficacy of the declarations being made to it” by the roughly 270 aircraft ownership arrangements there.

Such arrangements aren’t so unusual among the very rich.

The United Arab Emirates – one of the world’s wealthiest countries – sought to avoid the VAT with help from Appleby. In 2012, the authoritarian Persian Gulf monarchy bought two Bombardier Global 6000s for $120 million and committed to paying $98 million more to convert them into high-tech spy planes.

Because it’s a state, the UAE wasn’t eligible to register an aircraft in the Isle of Man. Appleby and Washington-based Akin Gump lent a hand. Appleby created a shell company called Advanced Integrated Systems (IOM) Ltd. that could register the aircraft on behalf of the UAE.

Appleby also received assurance from the island’s customs officials that the planes wouldn’t be taxed. Akin Gump helped arrange Appleby’s registration of the plane, according to emails sent from its lawyers to Appleby. Neither Akin Gump nor the UAE returned requests for comment.

Not all such maneuvers, in the Isle of Man or elsewhere, are particularly complicated.

When Mohammed bin Salman, now crown prince of Saudi Arabia, bought the mega-yacht Serene from Russian vodka billionaire Yuri Shefler for $456 million, it was docked in the Port of La Ciotat, in the south of France. (The hefty price bought 30,000 square feet of living space, including an underwater viewing room, a climbing wall, a cinema and an indoor seawater pool, as well as space for 52 crew members. The yacht also has a helicopter hangar, at least five onboard boats and a submarine garage.)

Advisers proposed motoring the 439-foot yacht to international waters in the western Mediterranean and closing the sale there, according to documents sent from the American law firm Baker McKenzie to Appleby in 2015.

It couldn’t be learned if the plan was ever carried out. It’s unclear if any VAT was paid. A spokeswoman for the Saudi government declined to comment, as did Baker McKenzie.

Martinez, of Oxfam, said moving yachts is a common tax-avoidance strategy. “If you’re in international waters, no country can claim it,” she said. “It’s stateless income.” Whether the sale closed in international waters and whether the location was part of a tax-avoidance strategy could not be learned.

American flyers

The lucrative business of working around ownership problems for aircraft and yachts has also attracted U.S. financial institutions. Appleby worked at least nine times total with Wells Fargo and Bank of Utah to create trust structures enabling noncitizens to register jets in the United States.

The Bank of Utah served as a trustee on one such deal involving natural-gas oligarch Leonid Mikhelson, deemed by Forbes the richest man in Russia, with a fortune estimated at $17 billion. Appleby made arrangements that included creating an Isle of Man branch of Mikhelson’s Panama company, Golden Star Aviation Ltd., which leased a Gulfstream G650 from a Cayman Islands company to also avoid VAT in Europe on the $60 million plane. (Golden Star Aviation’s president is listed as James Ackroyd-Cooper, a personal trainer in Suffolk, England.) The arrangement saved Mikhelson up to $12 million, according to Isle of Man documents approving the exemption from the 20 percent tax. Using the Bank of Utah as trustee also gave Mikhelson access to the U.S. jet registry, which would likely increase the plane’s resale value.

“Mr. Mikhelson acts strictly within the boundaries of the law and in compliance with applicable legislation at all times,” a spokesperson said. “He does not deem it necessary to provide any comments on his personal property activities.”

Gabriel Zucman, an assistant professor of economics at the University of California, Berkeley, and the author of “The Hidden Wealth of Nations,” said tougher information-sharing requirements for the offshore industry are required to stop the wealthy from avoiding taxes. “This confirms that the offshore system benefits a tiny elite who uses it to avoid and sometimes evade billions of dollars in taxes,” he said. “Unless we are willing to accept ever rising inequality, this situation is unsustainable.”

Appleby cut its ties to Mikhelson after U.S. authorities retaliated against Russia’s 2014 invasion of Crimea by blacklisting his natural-gas company, Novatek, along with other businesses and people tied to Putin.

This confirms that the offshore system benefits a tiny elite who uses it to avoid and sometimes evade billions of dollars in taxes. Gabriel Zucman

An Appleby official wrote that, “with regret,” he had to advise Mikhelson’s representatives of the law firm’s decision to end relationships that were directly or indirectly connected to entities or people on the U.S. sanctions list. Appleby helped transfer Mikhelson’s arrangements to another Isle of Man firm.

The Bank of Utah applied to renew Mikhelson’s plane’s registration with the Federal Aviation Administration in 2016, two years after his company was sanctioned, according to FAA records.

In an interview with an ICIJ partner, The New York Times, Bank of Utah trust officer Joe Croasmun said the bank took seriously its obligations to know its customers and to be on guard against suspicious activities. When asked about the bank’s relationship with Mikhelson, Croasmun went to look in the bank’s files. When he returned, he said that the bank was indeed trustee for Golden Star Aviation but that he couldn’t find any mention of the Russian businessman.

“His name is not in there,” he said.

In a later statement, Croasmun said, “We view our risk management processes to be a living and breathing methodology, always growing to implement best practices and enhancing our country risk assessment as the world changes. We are currently doing a review of all countries we have designated as ‘higher risk’ – including transactions involving Russia.”

Contributors to this story also included:  Tim Robinson and Mike McIntire.

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Call for transparency on data on private jets and yachts operating in Europe and registered in tax havens

Question for written answer  E-002948/2022 to the Commission Rule 138 Karima Delli (Verts/ALE), Ciarán Cuffe (Verts/ALE), Jutta Paulus (Verts/ALE), Jakop G. Dalunde (Verts/ALE), Pär Holmgren (Verts/ALE), Alice Kuhnke (Verts/ALE), Anna Deparnay-Grunenberg (Verts/ALE), Alviina Alametsä (Verts/ALE), Tilly Metz (Verts/ALE)

Business aviation has grown by 16% in three years. A jet creates on average 5 to 14 times more CO 2 pollution per passenger than a commercial aircraft, yet private jets are excluded from European legislation on carbon trading or on sustainable fuels for aviation (‘Refuel aviation’).

• 1. Why did the Commission not include private jets in its proposals in the first place? Is it in favour of including them now? With the energy crisis, does the Commission intend to put forward proposals to reduce these forms of transport?
• 2. A number of jets operating in Europe are registered in tax havens and escape any form of taxation. Can the Commission ask Eurocontrol to publish data on these jets?
• 3. We also lack transparency on private yachts operating in Europe and registered in tax havens. Could the Commission keep a public register of these yachts?

In the name of climate justice and the fight against tax evasion, it is imperative to bring more transparency to these practices and to ensure that private jets and yachts operating mainly in Europe are subject to the rules and taxation regimes of the countries where they pollute.

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The EU Proposes To Exempt Private Jets From Fuel Tax

According to Argus Media , the European Commission has proposed exempting private jets and cargo flights, two of the most polluting forms of transportation, from the planned EU jet fuel tax. A draft indicates that the tax would be phased-in for passenger flights, including ones that carry cargo. The draft, which the commission will present on 14 July with its proposed revisions to the bloc's 2003 energy-taxation directive, indicates there could be an exemption from taxation for energy products and electricity used for intra-EU air navigation of cargo-only flights . It proposes allowing EU states to only tax such flights either domestically or by virtue of bilateral or multilateral agreements with other member states.

Meanwhile, private jets will enjoy an exemption through classification of "business aviation" as the use of aircraft by firms for carriage of passengers or goods as an "aid to the conduct of their business", if generally considered not for public hire. It gets better: a further exemption is given for "pleasure" flights whereby an aircraft is used for "personal or recreational" purposes not associated with a business or professional use.

Non-governmental organization Transport & Environment (T&E) called the proposal "generally good".

"The downside, though, is the commission is considering exempting cargo carriers that are often US-run," said its aviation director Andrew Murphy, who noted "multiple" solutions for taxing jet fuel used by cargo carriers that "tend to use older, dirtier aircraft".

Hilariously, none other than Murphy recently co-authored a report indicating that private-jet CO2 emissions in Europe rose by 31% between 2005 and 2019, with flights to popular destinations up markedly during summer holiday seasons. He has argued for a fuel tax for this "leisure-driven" private jet sector.

But, naturally, the very rich people who use private jets, pulled just enough strings within Europe's bureaucracy to avoid paying the tax.

Of course, in a world of fake concerns about climate change and ESG poseurs galore, there needed to be some excuse for this glaring exemption, and sure enough Airlines for Europe (A4E) came up with one, saying that it feared setting minimum tax rates for intra-EU flights could lead to distortion of competition. The industry association, which counts 16 airline groups as members including Ryanair, Air France/KLM, Lufthansa, IAG, EasyJet, and Cargolux, indicated that the commission's proposal could lead to aircraft deliberately carrying excess fuel bought outside the EU specifically to avoid the bloc's jet fuel tax.

So it's best to just do away with the tax altogether.

The draft may change before 14 July and does not contain the all-important annexes with tax rates. To enter into force it must be approved by all 27 EU member states, and it may change markedly over the coming months. A commission proposal made in April 2011 to update EU energy taxation rules failed after finance ministers could not agree by unanimity in 2014.

The commission wants to align energy taxation with EU climate goals, meaning that taxes should be based on the net calorific value of the energy products and electricity and that minimum levels of taxation across the EU would be set out according to environmental performance and expressed in €/GJ. These minimum levels should be aligned annually on the basis of the EU's harmonized index of consumer prices, excluding energy and unprocessed food.

Next week, the commission will propose changes to the EU's emissions trading system (ETS). A draft of these did not detail how aviation will be treated, but no free allocations are envisaged for maritime, road transport, and buildings sectors. Officials will also present the commission's mandate for sustainable aviation fuels (SAF), whereby all firms could be expected to fill up with blended jet fuels at EU airports.

By Zerohedge.com

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Private planes, mansions and superyachts: What gives billionaires like Musk and Abramovich such a massive carbon footprint

Distinguished Professor and Provost's Professor of Anthropology; Director of the Open Anthropology Institute, Indiana University

Ph.D. Candidate in Anthropology, Indiana University

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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’s 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 didn’t 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 doesn’t 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.

[ Like what you’ve read? Want more? Sign up for The Conversation’s daily newsletter .]

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 shouldn’t 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.

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Canada is taxing luxury cars, yachts, and private jets as celebrities come under scrutiny for their emissions

• Canada is adding a 10% tax on the purchases of luxury aircraft, cars, and boats.
• It comes as US celebrities are under fire for environmental impacts of their private jet usage.
• Some experts argue focusing on individuals distracts from the need for bigger climate initiaitves.

As stars like Taylor Swift and Drake are being scolded for their private jet usage, Canada revealed new details about how it's hoping to make the wealthy think twice about contributing to the climate crisis with their extravagant modes of transportation. 

The Select Luxury Items Tax Act — which will go into effect September 1st — will add a 10% tax on the full value of any Canadian purchases of aircraft and cars that exceed $100,000, as well as boats that exceed $250,000. These thresholds are in Canadian dollars and convert to roughly $78,000 and $194,000 respectively in US dollars. 

The Canadian government has argued the tax will not only discourage the wealthy from purchasing emissions-intensive vehicles, but reduce inequality as well. 

"Some Canadians have lost their jobs or small businesses, while some sectors of the economy have flourished," per a statement on the government's website. "That's why it is fair today to ask those Canadians who can afford to buy luxury goods to contribute a little bit more."

The details of the tax come on the heels of a recent report from Yard, a UK marketing firm, titled "Celebs with the Worst Private Jet Co2 Emissions." Using flight data from the popular Twitter account @CelebJets — which tracks the jets of the rich and famous — the report detailed the biggest "offenders" and their carbon footprints. 

Pop star Taylor Swift came in at number one. As of the July 29th report, her private jet had flown 22,923 minutes, or 15.9 days, in 2022, emitting over $8,000 metric tons of carbon dioxide equivalent — over 1,000 times more than the average person's annual emissions. A 2021 Transport & Environment report found that a private jet can emit the same level of carbon dioxide in four hours that the average person in the European Union produces over an entire year. The boxer Floyd Mayweather, the musician Jay-Z , and the former baseball player Alex Rodriguez followed Swift on the list. 

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Some of the celebrities have called the report into question, however. A spokesperson for Swift, for instance, told The Washington Post that the musician's jet is "loaned out regularly to other individuals," suggesting many of the trips were not hers. A lawyer for Jay-Z, meanwhile, said the rapper does not own the jet in question. 

While Yard's analysis has not been peer reviewed , and as the authors emphasize , "there is no way to determine if these celebrities were on all the recorded flights," the report highlights the environmental impact that celebrities, politicians, business executives, and other wealthy individuals can inflict through significant private jet usage and other actions. A 2021 Oxfam analysis found that in 2015, the richest 1% accounted for 15% of global carbon emissions. The Yard report, coupled with the Canadian luxury tax act, suggest this scrutiny isn't going away anytime soon.

The luxury tax has been criticized for hurting the aviation industry and putting too much onus for the climate crisis on individuals

The new Canadian tax has received criticism from the business community. Some have argued it could have " serious implications " for an aviation industry that has already faced challenges during the pandemic — potentially resulting in the loss of at least 900 jobs . 

"The economic impact of the luxury tax will be significant and have not been studied with a comprehensive understanding of our industry," Anthony Norejko, President and CEO of the Canadian Business Aviation Association, said in a statement. 

With regards to the criticism of celebrities, some experts say focusing too much on the actions of any one individual can distract from the policy changes that are needed to generate real progress, like the significant climate legislation currently lingering in Congress. Others have pointed to the way the oil company BP for instance, launched a carbon footprint calculator in the mid-2000s to put the onus of climate action more on individuals, rather than the fossil fuel industry.  

"My feeling is that while I would prefer Taylor Swift make more responsible transportation decisions, shouting at celebrities on the internet is not in my personal top 10 list of policy levers," NASA climate scientist Kate Marvel told Axios. 

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