Not only do the rich consume much more carbon-intensively than the poor, given their means to engage in high-emitting activities like flying in private jets, owning multiple homes, and eating lots of meat, but they also disproportionately benefit from climate-destroying investments, the researchers find. The study, recently published in PLoS One, lays a major slice of emissions at the feet of the one percent, and suggests taxing the shareholder class as one way to curb the influence of fossil-fuel companies. 

“The top one percent is responsible for more emissions than the bottom half of the country,” said Jared Starr, a sustainability scientist at the University of Massachusetts–Amherst and the study’s lead author. “For the top households, over 50% of their emissions responsibility is coming from income flowing from their investments,” he told Fortune. “So if we want change, we have to look at this segment.”

Here’s how that breaks down in raw numbers. For the top 1% of households, a group whose average income is $1.5 million a year, roughly $600,000 of annual income can be tied to climate-destroying investments. For the top 0.1% of households, whose take averages $6.8 million a year, roughly $3.8 million in annual income can be tied to climate-destroying investments. This group also contains the so-called “super emitters,” about 21,000 households, each emitting the equivalent of 3,000 tons of carbon dioxide a year, or 300 times the emissions of a lower- or middle-class American. 

That doesn’t mean the ultrarich are piling money into oil companies, Starr noted—rather, the figure assumes a typical balanced portfolio of investments for each income level, and then calculates the carbon intensity based on overall figures for the U.S. economy. 

So here’s what it has to do with Milton Friedman, and how the lefty research at U. Mass leaned into the famously conservative economics of the Chicago School to make their case.

Blame the investors, not the customers 

The study flips recent research on emissions inequality by looking not at how people consume, but at where their money comes from. This is becoming a trademark for U. Mass–Amherst, whose economics department is known for being ahead of the curve on issues including the minimum wage, price controls, and health care. For instance, one of Starr’s coauthors, Michael Ash, has previously published research on corporate pollution and Medicare for All; and another colleague not involved in the paper, Arindrajit Dube, has been a leading researcher on the economic benefits of raising the minimum wage. 

Starr argues that any hope of bringing down carbon emissions requires targeting the ultrawealthy.

“Eventually, we have to stop creating carbon pollution. If we don’t, the planet will be uninhabitable,” he said. “The question is, how do we provide the right incentive for people on corporate boards and the executive C-suite and shareholders to shift their behavior?”

One proposal the study suggests is a tax on investment products directly tied to how polluting they are. For him, that’s a logical outgrowth of the idea of shareholder supremacy—the notion, first popularized by Milton Friedman in the 1970s, “that companies exist to create value for shareholders.”

Friedman first articulated this provocative take in a 1970 essay that boldly claimed: “There is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits.” He mocked business leaders who claimed to pursue social good, and claimed that “the use of the cloak of social responsibility, and the nonsense spoken in its name by influential and prestigious businessmen, does clearly harm the foundations of a free society.” 

That idea, that businesses only need to concern themselves with making money, overturned decades of a gentler, more nationalistic management philosophy, under which corporate leaders had paid lip service to balancing the needs of many constituents—shareholders as well as customers, employees, and their communities. The shareholder-king theory ushered in decades where CEOs pursued high stock prices through increasingly questionable methods, including complex buyouts, layoffs, or selling off entire parts of the business, and eventually led to a wholesale backlash against corporations, with one 2003 documentary declaring the modern corporation pathological.

Shareholder value means shareholder responsibility

The UMass researchers embrace the shareholder-primacy theory to put responsibility for corporate activities squarely at the feet of the investor class.

“Why does economic activity happen?” Starr asked. “We have the perspective of the consumer that it exists for us, to make goods and services possible. In the U.S., though, there’s this idea that companies exist to create value for shareholders. They do that by creating goods and services for people, but the ultimate goal is to create value for shareholders—so shareholders are a large part of the reason these emissions are happening.” 

A tax on carbon-heavy investments would avoid the potential pitfalls of a broad-based carbon tax, which can penalize the poorest members of a society, and could be politically popular, the paper argues. “Because unearned investment income and asset ownership are heavily concentrated at the top of the income distribution, limiting a carbon tax to either of these items could further focus it on those reaping the most economic benefit from [greenhouse gas] emissions, increase public support, and reduce [greenhouse-gas]-intensive economic activity in a more direct way,” the paper says.

A positive side effect is that this sort of tax would likely send a clearer investment signal than current ESG rankings, which, apart from being mired in a political tug-of-war between the parties, have been criticized for being opaque and hard to follow. What’s more, for the one-percenter who’s interested in reducing their climate impact, an investment tax is relatively easy to avoid. 

“It’s a pretty low bar to say, Okay, I don’t have to invest in fossil-fuel companies,” Starr said. “I don’t have to change where I live, I don’t have to change my job. I just have to choose not to invest in companies that are destroying the climate.”