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Luxury-focused climate mitigation policies: A comparative ethical analysis [1]

['Fausto Corvino', 'Hoover Chair In Economic', 'Social Ethics', 'Institut Supérieur De Philosophie', 'Isp', 'Université Catholique De Louvain', 'Louvain-La-Neuve']

Date: 2025-11 

This article focuses on the climate change policies that are needed to reduce the greenhouse gas emissions of the ultra-rich, primarily from superyachts, private jets, mega-mansions, and high-emission road vehicles. These are all goods for which demand is inelastic and therefore difficult to curb with Pigouvian policies. The article proposes a comparative analysis of the three main luxury-focused mitigation policies discussed in the literature: bans, luxury carbon taxation and progressive carbon taxation. The analysis is based on six normative and non-normative criteria: emissions justice, expressive justice, social efficiency, the non-frustration of legitimate expectations, administrative feasibility and prevention of carbon leakage. The first part of the article discusses how each of these criteria is relevant to an analysis of mitigation policies targeting the emissions of the ultra-rich. The second part examines each luxury-focused mitigation policy against all six criteria and assigns them a score. The third section briefly discusses the results of this comparative analysis.

Methodologically, the article will adopt a “constructive” approach to ethics and public policy [ 13 – 15 ]. Assuming that different people will have different reasonable moral intuitions about the relative importance of the above criteria, all criteria will be treated as equally relevant. Each policy option will be assigned a low, medium or high score with respect to each criterion. The fact that a policy option scores low on one criterion is not in itself a reason to abandon the policy. The data must be contextualised within an overall analysis. More specifically, a policy option that scores low on both a normative and non-normative criterion can be considered less desirable overall than a policy option that scores high on the same two criteria, all other things being equal. However, the article does not indicate how to resolve trade-offs that arise when one policy option scores high on a normative criterion and low on a non-normative criterion and another policy option scores low on the same normative criterion and high on the same non-normative criterion. The article is only intended to define the normative and non-normative attributes of a “menu” of luxury-focused mitigation policies [ 13 ]. This could be useful for policymakers when deciding which policies to implement based on broader political considerations and for the public when evaluating policymakers’ actions or inactions with respect to high-wealth emissions. Those who disagree with this constructive methodology can still adopt the descriptive part of the analysis if they find it convincing, incorporating it into a comparative scheme in which they assign different weights to different criteria based on their preferred normative theories.

Many of the advocates of luxury-focused mitigation policies have not made a strong case for any particular one. Rather, they have tended to focus on a single policy instrument, mainly for the sake of simplicity in arguing against high-wealth emissions, while recognising that, at least in certain cases, there may be reasons to use another policy instrument [ 1 , 3 , 4 ]. This article aims to fill this gap in the literature on the ethics of climate policy. It provides a comparative analysis of luxury-focused mitigation policies based on six criteria: emissions justice, expressive justice, social efficiency, the non-frustration of legitimate expectations, administrative feasibility, and the prevention of carbon leakage. The first four of these criteria are normative. These indicate the desirable states of affairs to which policies should aspire, based on ethical principles and values. The last two criteria are non-normative. These indicate the characteristics policies must possess to have a good chance of achieving the desired states of affairs given existing economic, institutional, and political constraints.

The three main alternative policy instruments to mitigate high-wealth emissions are bans, luxury carbon taxation and progressive carbon taxation. Bans mean the prohibition of buying and/or owning high-end goods after a certain date [ 4 , 9 ]. Luxury carbon taxation refers to imposing a surcharge on the purchase and/or ownership of high-end goods, e.g., as a percentage of the list price [ 1 , 6 , 7 , 10 ]. Progressive carbon taxation consists of introducing different marginal tax rates for carbon emissions, which increase depending on how much an individual emits over a certain period – for example, over the course of a year [ 3 , 11 , 12 ]. I will refer to the three different policy options as luxury-focused mitigation policies. These are usually seen as a necessary complement to climate policies that provide a significant incentive to reduce emissions for everyone who is not ultra-rich – in short, equal-for-all mitigation policies. Some examples of such policies are a flat carbon price, a cap-and-trade system with auctioned allowances, etc.

Various ethical arguments have been put forward for why we should strongly discourage greenhouse gas emissions from luxury and emission-intensive goods such as private jets, superyachts, mega-mansions and high-emission road vehicles [ 1 – 7 ]. We can refer to these as high-end goods, and define the emissions generated by high-end goods as high-wealth emissions. There is a general convergence in the literature that, to effectively curb high-wealth emissions, we need to go beyond Pigouvian policies. This is because high-end goods are mainly consumed by the ultra-rich, i.e., (US dollar) multimillionaires, whose price elasticity is significantly lower than that of everyone else [ 3 , 8 ].

2. The criteria for policy evaluation

In this section I will give a brief overview of the criteria I will use to compare luxury-focused mitigation policies. In the next section, I will evaluate each policy option according to how well it meets each criterion. Finally, I will briefly discuss the results of this comparative analysis.

2.1. Just emissions Climate change is associated with a series of risk thresholds, with increasingly severe and potentially irreversible consequences becoming inevitable once they are exceeded. These are usually presented as thresholds of global warming above pre-industrial levels, for example 1.5°C, 2°C, etc. Different people often have different views, based on ethical, economic and scientific arguments, about the level of risk that is justified in imposing on both present and future generations. However, each chosen risk threshold comes with a limited emissions budget that is probabilistically compatible with it [16]. This means that unless one believes that climate change should continue unchecked, collective emissions must be capped at some point. This raises the normative question of how to allocate the collective carbon budget fairly, i.e., who should have access to it, to what extent and for what reasons. Clearly, the stricter the desired risk threshold, the smaller the collective carbon budget, and the fewer emissions will be compatible with it after accounting for those needed to meet people’s basic needs [17]. If the ultra-rich face the same price constraints on emissions-generating actions as everyone else, they will use up a disproportionate share of the carbon budget. This remains true whether the collective carbon budget is managed with a flat carbon price or opened up to emissions trading after being divided according to a patterned principle or being auctioned. Three arguments can be used to justify luxury-focused mitigation policies insofar as they prevent the collective carbon budget from being consumed by high-wealth emissions rather than other emissions, whether subsistence-related or not. The first is the wasteful emissions argument. High-wealth emissions primarily result from frivolous consumption which does not decisively contribute to human flourishing for those who engage in it. This is because the actions that generate these emissions can be substituted with less polluting alternatives without individuals losing their reasonable chance of experiencing a condition in which “all aspects of [their lives] are good” [18]. In short, the ultra-rich could live a luxurious and ostentatious life by making use of the wide range of low-carbon alternatives to the high-end goods analysed in this article. This distinguishes high-wealth emissions not only from subsistence emissions, but also from emissions that enable people to do things essential to living the life they want, such as pursuing personal fulfilment, developing talents and skills, etc. At the same time, high-wealth emissions significantly erode the carbon budget. A smaller budget increases the general cost of accessing it due to the law of supply and demand. In practice, the smaller the carbon budget, the higher the flat carbon price must be to remain consistent with it. Similarly, in a cap-and-trade system, if the supply of emissions allowances decreases but demand remains constant, the market price will inevitably rise. Consequently, the cost of emissions will increase for those who rely on them to carry out actions crucial to their own flourishing. Luxury-focused mitigation policies would be morally desirable because, by limiting high-wealth emissions, they enable more people to do good in key areas of life while staying within the collective carbon budget [4]. The second is the “real” sacrifice argument. Living within a collective carbon budget has social implications. Either individuals must pay for their emissions, or they must stop emitting, which obviously entails behavioural change. If the government has to impose costs on individuals to mitigate the risk of a “common disaster”, such as climate change, then it could be argued that there is no valid reason why some should bear the “real” costs while others should not. “Real” costs refer to a reduction in individual welfare rather than a simple decrease in wealth [19–21]. Equal-for-all mitigation measures would encourage most people to change their consumption behaviour to protect their income. For many, this would result in significant setbacks to their welfare; for example, they might have to stop travelling, stop buying things they want, move to a smaller house, or have fewer children. However, equal-for-all mitigation policies would not prevent multimillionaires from continuing to own and use private jets, superyachts and mega-mansions, etc. [21]. Of course, policies such as a flat carbon price would impose monetary costs on multimillionaires. Yet, due to their level of wealth, the monetary costs incurred by these individuals as a result of equal-for-all mitigation policies would translate into small or insignificant real costs [20]. Luxury-focused mitigation policies would partially reverse this. They would impose greater real costs on the ultra-rich by forcing them to change their lifestyles. This would also reduce demand on the carbon budget, thus lowering the overall cost of accessing it and alleviating the burden of mitigation on the most vulnerable. The third is the unjust entitlement argument. It has recently been suggested that multimillionaires do not have a moral right to a portion of their wealth, even though it is legally theirs [3]. This would be the case given current levels of inequality within countries, and based on any reasonable theory of socio-economic justice — including libertarian ones, which tend to be more tolerant of extreme wealth. Many multimillionaires spend the unjust portion of their wealth on high-end goods. The emissions produced by these goods erode the collective carbon budget and contribute to climate threats, which disproportionately affect the poorest. All of this “add[s] insult to injury” [3]. Luxury-focused mitigation policies would prevent the ultra-rich from using the carbon budget in a way that compounds background distributive injustice [22].

2.2. Expressive justice Extreme wealth can lead to expressive wrongdoing if it is spent on frivolous consumption that shows total indifference, or even contempt, towards those with much more pressing claims to scarce societal resources [23]. This kind of wrongdoing exacerbates any distributive injustice that fuels inequalities in consumption. Those who engage in extreme forms of frivolous consumption are, more or less voluntarily, conveying the following message to victims of distributive injustice: “I could easily mitigate existing injustices in resource and/or welfare distribution by giving up a small part of my wealth and ensuring you have enough, but instead I choose to spend my money as extravagantly as possible”. The argument that retaining or spending extreme wealth creates a problem of interpersonal morality because it is “preposterous” has recently been defined as the “excess intuition” [23]. From the perspective of expressive wrongdoing, one could argue that there is no substantial difference between retaining extreme wealth in the face of others’ urgent needs and spending it frivolously. However, I posit that when extremely frivolous consumption is also conspicuous — for example, owning a mega-mansion or sailing a luxury superyacht around the world — the expressive wrongdoing becomes more serious because it is made apparent to everyone. Expressive wrongdoing is an interpersonal issue. However, it takes on a political dimension when the government allows it to happen without taking action to prevent it, despite being able to do so easily. By failing to act, the government implicitly legitimises the disregard that the ultra-rich show towards everyone else. This elevates the issue to an institutional level, rendering it a matter of justice [23]. The excess intuition has originally been presented in relation to the distribution and use of wealth. However, it is also applicable to emission shares. Indeed, the excess intuition suggests that there is not only a quantitative difference, but also a qualitative difference, between using emission shares from the collective carbon budget to upgrade from a one-bedroom to a two-bedroom house, and using emission shares to upgrade from a 24-metre yacht to a 40-metre superyacht. The move to a two-bedroom house reflects socially recognised individual preferences [23], such as providing a child with their own space, which is valued by the vast majority and significantly impacts a family’s quality of life. Conversely, upgrading from a yacht to a superyacht is about satisfying frivolous preferences that most people cannot comprehend. Both purchases could be considered unfair uses of the collective carbon budget, albeit to different degrees. This would be the case, for example, if the collective carbon budget were so limited that a dramatic choice had to be made between allowing someone’s subsistence emissions or overshooting the probabilistically compatible mitigation target, thereby causing avoidable and dramatic damage to people and nature [17,24]. However, it could be argued that there is a deeper moral issue with purchasing a superyacht, one that extends beyond the mere violation of the fair allocation of emission shares. By choosing to buy a superyacht, a person demonstrates a complete lack of concern for the climate crisis facing society. They prioritise their own trivial and extravagant desires over preventing climate change and ensuring that others can live decently. In doing so, they position themselves as morally superior to everyone else. This is simply incompatible with the deeply rooted liberal idea of moral equality [25]. The government demonstrate its disapproval of high-wealth emissions by introducing luxury-focused mitigation policies, thus avoiding becoming complicit in the expressive wrongs they entail [26].

2.3. Social efficiency High-end goods are positional. They are pursued mainly because of how they compare with other people’s goods, rather than because of their intrinsic qualities [27–30]. In general, the more people around a multimillionaire who have bigger and/or more luxurious houses, yachts, jets and cars than they do, the more inadequate their own possessions will appear to them. Consequently, the greater the social pressure on the multimillionaire to seek more conspicuous items. It has been argued that a great deal of social resources are wasted when the ultra-rich engage in positional consumption [30,31]. While the relative positions of multimillionaires remain unchanged, total spending increases exponentially. Even worse, competition for high-end goods triggers “expenditure cascades” [31]. As the ultra-rich compete to own the most luxurious items, they gradually raise the bar for what constitutes appropriate consumption for those immediately below them in the social scale — that is, the rich. The rich, in turn, raise it for the upper middle class, and so on down the social scale until a certain point is reached. One consequence of this is that some people may be forced to choose between increasing their positional consumption to keep up with others — for example, by reducing spending on non-positional consumption, such as security, healthcare, etc. — or losing their social position. There are two arguments for the view that luxury-focused mitigation policies would promote social efficiency. One argument is that preventing multimillionaires from purchasing high-end goods would encourage more efficient use of money by everyone. In the aggregate, people would spend less money on social markers and their relative positions would not change significantly [1,2]. A second, narrower argument is that preventing multimillionaires from producing high-wealth emissions would encourage a more efficient use of the collective carbon budget. Indeed, the production of high-end goods generates emissions that erode the carbon budget, and expenditure cascades caused by these goods lead to still more emissions that erode the budget even further. By interrupting this snowballing effect, luxury-focused mitigation policies could preserve large portions of the collective carbon budget without anyone experiencing significant setbacks in their positional status [4]. This article will assess how different luxury-focused mitigation policies can achieve these two interrelated goals.

2.4. The non-frustration of legitimate expectations Every transition policy involves some deviation from the status quo. This deviation is typically justified by the desirability of the final state that the transition aims to achieve (e.g., a low-carbon economy). However, it may also cause a setback to the welfare of individuals who have made long-term plans (e.g., relating to work, family, etc.) based on the expectation that the status quo would remain more or less unchanged. Generally, when implementing a transition policy, a government has a duty to consider these implications [32,33]. This is because the ability to make long-term plans is essential for leading an autonomous and flourishing life. A government that frustrates someone’s long-term plans without valid reason commits a morally questionable act [34]. However, not all of the claims that stakeholders may raise against a transition policy are equally relevant. Some stakeholders’ expectations are legitimate and may therefore exert normative leverage over the policy, while others are not. For a stakeholder’s expectations to be considered legitimate, they must fulfil both epistemic and justice-based requirements [33]. If one or more stakeholders have legitimate grounds for opposing the adoption of a transition policy, the government must consider abandoning at least part of the desired deviation from the status quo. For instance, they could implement a less ambitious transition policy than initially proposed. Alternatively, they could proceed with the desired deviation from the status quo and mitigate the resulting frustration among stakeholders by providing some form of compensation [33,35]. Accordingly, different policy options can be evaluated based on the extent to which they frustrate the legitimate expectations of stakeholders, and on whether they can create resources to compensate for such frustration. To illustrate this, we can consider how it applies to luxury-focused mitigation policies. Luxury-focused mitigation policies could lead to a collapse in the production of high-end goods. This could frustrate the expectations of those who have planned their lives around the assumption that luxury production would continue unimpeded by government interference. For the sake of argument, we can focus exclusively on the luxury industry, bearing in mind that these considerations can be extended to part of the supply chain. We can distinguish three main categories of actors: investors, workers, and consumers. It can be said that all of these actors have formed the epistemically reasonable expectation that the production of high-end goods will not be severely impeded by governments. In fact, multimillionaires are generally taxed less than other people, which is why their wealth and numbers have grown in recent decades. One reason for this is that they generate most of their income from capital investments, which are usually taxed less than income from labour [36]. Furthermore, some high-end goods are taxed at a lower rate than ordinary goods. For instance, private jet flights are taxed less than scheduled flights in both the US and the EU [37]. In some countries, fuel for superyachts is also taxed at a lower rate than fuel for smaller boats [38–41]. The bottom line is this: Governments have permitted the consumption of high-end goods to grow disproportionately without attempting to control it [10]. For an epistemically valid expectation to be considered legitimate, however, certain justice-related criteria must be met. One of these is the criterion of consistency [33]. If someone has an epistemically valid expectation that they can continue to do X and a valid moral conviction that society should do Y, the expectation to do X is only legitimate if others in similar situations can also do X without preventing society from doing Y. As previously mentioned, there are compelling moral reasons for keeping climate change within reasonable risk limits. If everyone invested their money in the most profitable opportunities or consumed whatever they liked best, it would be impossible to achieve a rapid climate transition [42]. Therefore, although epistemically valid, the expectations of investors and consumers in the luxury industry are not legitimate. However, this is not the case for some people working in the luxury industry, particularly those on low wages or with restricted access to alternative income sources. It is indeed possible for society to implement an ambitious climate transition while ensuring that everyone’s basic needs are met, either through work or income support [43,44]. Therefore, on the one hand, there are valid reasons to put an end to high-wealth emissions as soon as possible. On the other hand, some luxury industry stakeholders have legitimate expectations that they will continue to benefit from the production of high-end goods. The government’s challenge lies in finding a balance between these competing demands. There are two non-exclusive strategies for achieving this [35]. The first is to select a policy instrument that does not involve the immediate and/or complete cessation of high-end goods production. The second is to tackle high-wealth emissions head on and, at the same time, compensate those whose legitimate expectations are frustrated by the policy. This article will evaluate luxury-focused mitigation policies based on their ability to fulfil these strategies. The fact that a policy option frustrates the legitimate expectations of some stakeholders without raising any revenue does not mean that this frustration cannot be compensated for by allocating resources from elsewhere. However, I posit that a luxury-focused mitigation policy would be more effective in avoiding the frustration of legitimate expectations if it generated revenue internally and “constrained” these resources [45] to compensate those affected.

2.5. Administrative feasibility When analysing a policy option, two aspects of feasibility must be considered: political and administrative. Political feasibility refers to the probability that a policy will be approved by the relevant bodies and officially incorporated into the system of rules and laws. It is subject to both hard and soft constraints [46,47]. Hard constraints render a policy option unfeasible due to “logical” or “nomological” restriction [46]. Soft constraints, on the other hand, are economic, institutional and cultural factors that make the adoption of a policy option more or less probable [47]. Unlike hard constraints, soft constraints are malleable, especially over time. For example, a policy proposal for the government at time t to distribute more than all the wealth available in the country to a specific social group at time t would obviously encounter nomological constraints and would therefore be rejected a priori. However, a proposal for the government to ban all cars from the country immediately would not encounter hard constraints, but rather enormous soft constraints. It would provoke widespread social protest and have dire economic consequences, etc. Therefore, while banning cars is feasible in the strict sense, the probability of it passing through the policy-making process is incredibly low. The administrative feasibility of a policy proposal refers to an organisation’s ability to achieve the desired outcome once the proposal has been approved by the relevant bodies and enacted as law or regulation. This depends on the effort required in terms of personnel, technology, and methodologies, as well as the body’s capacity to implement the policy and sanction infringements [48–50]. For example, banning all cars would probably be as politically unfeasible as banning cars with number plates bearing even numbers. However, the latter would certainly be less administratively feasible, as it would require local police to analyse all number plates in order to identify and punish offenders. Luxury-focused mitigation policies do not face hard constraints and are therefore politically feasible. However, they would encounter significant soft constraints in the form of strong opposition from consumers, producers, and more broadly, everyone involved in related industries. Furthermore, consumers of high-end goods — i.e., multimillionaires — typically exert considerable political influence through media ownership, political party sponsorship, public profile, and access to lobbying services. This influence could be used to oppose luxury-focused mitigation policies [10]. While empirical literature has analysed what can make climate policies more socially acceptable, focusing particularly on compensation mechanisms [51], this has not yet been applied specifically to policies targeting emissions from the ultra-rich. Therefore, this article conservatively assumes that all luxury-focused mitigation policies have a low level of political feasibility, and does not discuss this further. Clearly, the fact that one or more policy options encounter a low level of political feasibility does not render discussion of these options useless. As previously mentioned, the soft constraints are malleable. In the case of luxury-focused mitigation policies, for instance, these constraints could be overcome by generating sustained political momentum from the ground up. Discussing the normative arguments in favour of these policies so that they become visible to as many people as possible is certainly a step in this direction. For the above reasons, the comparative analysis of the three policy options will focus solely on administrative feasibility. In particular, the analysis will assess the policies based on how easy they are to implement, taking into consideration the complexity of collecting the required information and the effort involved in sanctioning violations. Since we are assuming that all three luxury-focused mitigation policies have a low level of political feasibility, policies that are more administratively feasible than others are more likely to be feasible in general. This is also because administrative feasibility could affect political feasibility: the easier a policy proposal is to implement, the easier it could be to build political support for its approval, all other things being equal.

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[1] Url: https://journals.plos.org/climate/article?id=10.1371/journal.pclm.0000740

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