Exclusive | ‘Making the Global Rich Pay for Climate and Welfare Is the Most Obvious Form of Reparations We Need’: Thomas Piketty

Piketty:  In our benchmark "sustainable convergence" scenario, all countries converge to €5,000 in monthly per capita gross national income or GNI (€60,000 per year) by 2100, which is close to the current level in the world's richest countries. In other words, there is a growth cap in rich countries, but poor countries are allowed to reach this level.

As of 2025, monthly GNI varies from €290 in Sub-Saharan Africa and €720 in South and South-East Asia to €4,590 in North America/Oceania. So what we propose involves enormous growth for a country like India, which would become as prosperous as the US is today in per capita terms, including a 4-5x rise in per-capita material consumption. This does not look like moderation to me.

That being said, we also look at scenarios with even higher growth, including a "Productivist Convergence" scenario with no work-time reduction, where all countries converge to €10,000 in monthly GNI. The problem is that this comes with cataclysmic global warming: 4 degrees or more according to our projections. In contrast, we show that it is possible to limit warming to 1.8 degrees with the €5,000 target.

Using lower-bound estimates for the welfare costs of high temperatures, both in terms of GDP loss and non-monetary well-being damages; we conclude that most countries and individuals would be better off with €5,000 and 1.8 degrees than with €10,000 and 4 degrees, especially in a country like India, where high temperatures are likely to have a devastating impact.

Somanchi:  The key question here is how can all countries in the world reach €5,000 in per capita monthly GNI by 2100, which is slightly more than the current level in countries like the US today, while at the same time preserving planetary habitability and keeping temperature rise below 2 degrees.

We show that this is possible under very strict conditions. First, all countries need to rely on low-carbon energy sources, driven by massive climate investments financed by the Global Justice Fund. Next, this development path requires a large reduction in labour hours, so as to limit total growth and material footprint, especially in the North; a major shift from material to immaterial sectors, with 43% of labour hours in education, health, and public services in all countries by 2100; and changes in food habits, so as to allow for a gradual return of forest cover to 1900 levels.

This ambitious structural transformation of the economy, which we call "sufficiency", plays a central role in making prosperity for all compatible with planetary habitability. This is the key message of the Global Justice Report.

Fast decarbonization of energy systems alone will not suffice. It needs to be supplemented by sufficiency and by a sharp compression of inequality, so as to finance climate investment and to sustain political support from bottom- and middle-income groups, both in the North and in the South.

Compared to most climate scenarios, including those studied by the IPCC (Intergovernmental Panel on Climate Change), the main novelty is that we put sufficiency, equality, and prosperity for all countries at the centre of the analysis. We find that by combining fast decarbonization, sufficiency, and drastic inequality compression, we are able to keep global warming at 1.8 degrees by 2100.

The share of the bottom half of global wealth increases from 2% to 30%, while the share of the billionaire class decreases from 6% to 0.05%. Nearly 90% of the world’s population double their income while working roughly half as many hours as they do today.

Our framework can also be used to study alternative scenarios; for instance, if all countries converge to a per capita GDP lower than €60,000 by 2100, for instance, €30,000 and €15,000. We find that targeted sufficiency, for example, €60,000 with large sectoral shifts, can be more effective than large uniform degrowth, for example, €15,000 with no sectoral shifts, in reducing material footprint, emissions, and global warming.

In other words, what matters most is the sectoral composition of production more than its aggregate level.

Piketty:  So another important question is how to finance the massive investment in climate infrastructure, education, and health that is needed for sustainable convergence between poor and rich countries, and at the same time allow for substantial growth in monetary incomes for the lower- and middle-income groups both in the North and in the South.

The global rich, and especially the billionaires and multimillionaires from the North, have benefited disproportionately from global economic growth in recent decades and bear a major historical responsibility for the accumulation of GHG (Greenhouse gas) emissions since the Industrial Revolution, and particularly over the 1970–2025 period, a critical period that is responsible for more than 70% of total cumulative emissions since 1800. To put it bluntly, the billionaires and other multimillionaires of 2026 would never have been able to accumulate so much wealth without these enormous global emissions.

They have been the prime beneficiaries of the global economic system leading to the current situation of rising temperatures, with particularly negative environmental consequences for the inhabitants of the poorest countries on Earth, especially in Sub-Saharan Africa and South and Southeast Asia. It is therefore perfectly legitimate, in our view, that they become the prime contributors to the redistribution of income and wealth that is now necessary to repair the damage and to reconcile global socioeconomic convergence with the preservation of planetary habitability.

In effect, we project an income scale of 1 to 5 for all countries in the future, and a wealth scale of 1 to 10. While this might seem like a drastic compression in inequality, this is in line with long-run trends in some of today’s richest countries.

In Nordic Europe, the ratio between the income of the top 0.1% and the bottom 10% used to be as large as 150 in 1910. Over the course of the 20th century, it was reduced to 11. Had you told this to the European elites of 1910, they would have predicted the collapse of the economy and the end of innovation and growth. Instead, what followed was the period with the fastest productivity growth and rising prosperity ever observed. Nordic European countries have had the highest productivity levels in the world, as measured by hourly GDP in PPP (purchasing power parity) terms, the best measure available, from the 1980s to the present day, even higher than those in the US.

This is the road to follow at the global scale over the course of the 21st century. This will not happen in one day, but it is critical to formulate a clear, quantified plan on the basis of the best available historical evidence.

Somanchi:  Annual labour hours have dropped from 3,000 hours in the 19th century to 2,100 in the world today, with 1,500 in Europe, and this contributed to the long-run rise in well-being. Our projected decline for the future is in line with historical trends. Back in 1930, Keynes famously predicted that his grandchildren would work less than 10 hours per week. This was maybe excessive, but this is clearly the general direction of history. This is even more true in the 21st century, given the need to limit global warming and material footprint.

Moreover, we see the projected reduction of labour hours as the logical outcome of sustained productivity growth. In our benchmark scenario, countries like India experience strong productivity growth as they converge towards the levels of today’s rich countries. Under the standard assumption that workers value leisure, an assumption well supported by historical evidence, workers would respond to rising productivity partly by working fewer hours. This effect could be especially strong for those at the lower end of the income distribution struggling to secure basic living standards.

That being said, the fact that the projections are consistent with past experiences does not imply that they are easy to implement. The key question is whether the institutional conditions exist to allow workers to translate higher productivity into both higher incomes and more leisure. The historical reduction in working hours relied on very strong collective mobilisation, social struggles, and legislative action, and the same will likely be needed in the future.

We also stress that limiting labour hours is primarily an issue for countries that have already achieved high living standards. In India, the priority is to improve per capita incomes, and work-time reduction will obviously happen later than in rich countries.

Piketty:  Geopolitical rivalries and economic nationalism will not solve today’s social and environmental challenges; rather they will lead the world to climate catastrophes. At some point, we will collectively need to turn to something else, and it is important to start thinking right now about an alternative plan and development model.

The social demand for economic justice and climate justice will become stronger and stronger over the course of the 21st century, particularly in the Global South. Back in 2013, when I proposed a global wealth tax, many thought it was unrealistic. But 10 years later, it was on the official agenda of the G20, thanks to the mobilisation of countries like Brazil and South Africa. If and when India and other major countries from the Global South join this movement, it will be impossible for the North to resist this pressure.

The same conclusion applies to the reform of international financial institutions. Today’s international system is governed by plutocratic principles. Countries in Europe and North America/Oceania have four times more votes at the IMF (International Monetary Fund) and World Bank than their share of the global population, while countries in Sub-Saharan Africa and South and South-East Asia have four times fewer votes than their population share. We urgently need to move to democratic rules, one person, one vote.

Future climate catastrophes and political pressures from the Global South will make such an evolution impossible for today’s rich countries to escape.

Somanchi:  In the ideal scenario, all countries eventually join the Platform, including the US and China. But in order to achieve this outcome, we may need to start with a smaller coalition. How can such incomplete coalitions make progress? One option would be to subject non-cooperative countries to trade and financial sanctions, in proportion to reasonable estimates of the climate damages they impose on others.

The important point is that there will be no hegemonic economic power in the 21st century. The US share of world GDP was as large as 40% in 1945. It is only 15% in 2025 (in PPP terms), and in our projections it will be only about 5% by 2100. No country will be in a position to resist the pressures coming from a sufficiently large coalition of countries.

Piketty:  High-wealth owners and their lobbies have always tried to argue that extreme inequality is in the general interest, and that taxing them would hurt the poor. However, this is not what we see in history. In the US, the top federal income tax rate was over 80% on average over the 1930–1980 period, and this was the period of highest productivity growth in US history, much faster than over the 1980–2025 period, characterised by lower taxes and higher inequality.

In the postwar period, you see exceptional wealth taxes in countries like Germany and Japan, with top wealth tax rates as high as 50–90%, and this surely contributed to the post-war growth miracle in these countries. At the time, there was a need to create fiscal space to finance large infrastructure investments, just as there is today, and many countries were able to make tough decisions in order to set the right priorities. The same conclusion applies today at the global level.

Somanchi:  Let us be clear, wealth is ultimately power. And there are strong arguments for opposing the concentration of power in and of itself, not least for the disproportionate influence it facilitates over society and government. Then there are also very legitimate questions of fairness and economic justice. That India is home to a rapidly expanding billionaires class while simultaneously recording some of the worst child nutrition outcomes in the world is a serious indictment on its current development path.  

Equally troubling is the fact that the current path does not seem to be leading us to broader economic opportunities and a sustainable and equitable future. If billionaires were leading the world to shared prosperity and reasonable climate outcomes, then I would perhaps have nothing to complain about. Instead, they are rapidly accumulating ever more wealth, even if this comes at the cost of aggravating the climate crisis and our material footprint.

We urgently need more resources in low-carbon energy infrastructures, education and health, and this shift in development priorities will certainly not come from giving ever more power to billionaires. 

Piketty:  Yes, we are making a case for reparations. The Global Justice Platform does not go far enough in this direction, but it already goes a long way, probably more than any other quantified plan that has been proposed so far. We also discuss how the GJP could be scaled up in order to fully compensate for historical colonial and climate damages.

This could involve an even more progressive system of global wealth and income taxes, tax surcharges for billionaires from the North, or direct compensations for specific colonial damages like the Home Charges extracted from India.

Regarding climate damages, the key point is that today’s global rich, who live mostly in the global North, bear a disproportionate responsibility. Making them pay for climate infrastructures and education and health expenditure is the most obvious form of reparations which we need to put in place.  

Somanchi:  In order to properly value socio-economic progress, we need to rethink the indicators that we use. We of course need monetary indicators, including gross domestic product and gross national income, for instance in order to compare income and wealth levels between and within countries. But we also need material indicators, including GHG emissions, temperatures, forest cover, education and health, labour hours, and so on.

As for why societies remain fixated on GDP, I think ordinary people are far more rational about this than they are given credit for. In practice, policies framed around sustainability rather than growth have far too often meant higher costs for ordinary people without any corresponding effort to tax wealth or reduce inequality at the top.

Take the 2018 French carbon tax: a strongly regressive tax on average workers commuting by car, with full exemption for kerosene used by air travellers, and with the revenues used to finance a wealth tax repeal benefiting the top 1%. This triggered massive popular protests like the "yellow vests" movement, and the carbon tax was ultimately abandoned, while the wealth tax repeal was maintained.

Or take the 2019 removal of fuel subsidies in Ecuador as part of an IMF-backed austerity package, which fell hardest on poor, working-class, and indigenous communities that depended on affordable fuel for transport and livelihoods.

They reflect a deeply entrenched pattern of "classless ecology", the idea that you can address environmental challenges without confronting the distribution of income, wealth, and power. The solution is not to lecture people into caring about well-being instead of output. It is to build a credible alternative where environmental and social goals are pursued together, financed by those at the top, with concrete and measurable benefits for the majority.

That is what the Global Justice Platform aims to do by proposing a quantitatively and institutionally grounded step toward global justice. It certainly does not seek to close the debate. Rather, it offers a transparent basis on which citizens, unions, parliaments, and international bodies can debate, contest, and decide the course of the coming decades.

All data series and computer codes underlying the Report are made available online at our website, which we hope everybody can use to participate in this deliberation and design their own preferred scenarios for the future.