The Relationship between Consumption and CO2 Emissions: Evidence for Portugal (original) (raw)

The impact of household consumption patterns on emissions in Spain

Energy Economics, 2010

The aim of this paper is to analyse the relationship between household consumption patterns and pollution in the Spanish economy. The analysis was carried using a Social Accounting Matrix (SAM) for the Spanish economy prepared for 1999. Taking the final demand of households as the exogenous account in the SAM framework and combining this with the information provided by the Household Budget Continuous Survey on income and consumption (INE, 1999), we analyse the pollution produced by both the economy and households in order to satisfy consumption requirements. We also consider the effects of income inequality on expenditure levels, establishing a link between income level, consumption patterns, propensity to consume and CO 2 emissions.

Future changes in consumption: The income effect on greenhouse gas emissions

Energy Economics

The scale and patterns of household consumption are important determinants of environmental impacts. Whilst affluence has been shown to have a strong correlation with environmental impact, they do not necessarily grow at the same rate. Given the apparent contradiction between the sustainable development goals of economic growth and environmental protection, it is important to understand the effect of rising affluence and concurrent changing consumption patterns on future environmental impacts. Here we develop an econometric demand model based on the data available from a global multiregional input-output dataset. We model future household consumption following scenarios of population and GDP growth for 49 individual regions. The greenhouse gas (GHG) emissions resulting from the future household demand is then explored both with and without consideration of the change in expenditure over time on different consumption categories. Compared to a baseline scenario where final demand grows in line with the 2011 average consumption pattern up until 2030, we find that changing consumer preferences with increasing affluence has a small negative effect on global cumulative GHG emissions. The differences are more profound on both a regional and a product level. For the demand model scenario, we find the largest decrease in GHG emissions for the BRICS and other developing countries, while emissions in North America and the EU remain unchanged. Decreased spending and resulting emissions on food are cancelled out by increased spending and emissions on transportation. Despite relatively small global differences between the scenarios, the regional and sectoral wedges indicate that there is a large untapped potential in environmental policies and lifestyle changes that can complement the technological transition towards a low-emitting society.

Reducing carbon emissions in Portugal: the relative roles of fossil fuel prices, energy efficiency, and carbon taxation

Journal of Environmental Planning and Management, 2016

We assess the relative role of fossil-fuel prices, energy efficiency and carbon taxation in achieving climate policy goals using a dynamic general-equilibrium model of the Portuguese economy featuring endogenous growth and a detailed modeling of public-sector activities. Given the expected evolution of international fossil fuel prices, we show that to reach ambitious domestic reductions in emissions, it is fundamental to promote energy efficiency and to levy a significant carbon tax. Improving energy efficiency and implementing a new carbon tax have significantly different economic and budgetary effects. More energy efficiency reduces emissions and boosts economic performance, but increases public and foreign debt. In turn, the new carbon tax reduces emissions at the risk of jeopardizing economic performance, while the effects on public and foreign debt are more favorable. Thus, the relevance of pursuing both strategies in tandem is clear. We estimate that under the reference-price scenario, a steady energy efficiency gain of 2-2.5% and a carbon tax of at least 35 € per tCO2 are required to achieve the stated goal of reducing carbon dioxide emission by 2030 by an amount equivalent to 40% of the emissions in 1990. These views were fully integrated in a proposal presented by the Commission for Environmental Tax Reform [CRFV (2014)] to the

Income, Energy Taxation, and the Environment: An Econometric Analysis

Umea Economic Studies, 2006

This thesis consists of four papers: two of them deal with the relationship between consumption, energy taxation, and emissions on macro level, and two of them focus on the effects of changes in consumption and income on the environmental quality on a micro level. The main objective of paper [I] is to examine how exogenous technological progress, in terms of an increase in energy efficiency, affects consumption choice by Swedish households and thereby emissions of carbon dioxide (CO 2), sulphur dioxide (SO 2) and nitrogen oxide (NO x). The aim of the paper is closely related to the discussion of what is known as the "rebound effect". To neutralize the rebound effect, we estimate the necessary change in CO 2 tax, i.e. the CO 2 tax that keeps CO 2 emissions at their initial level. In addition, we estimate how this will affect emissions of sulphur dioxide and nitrogen oxides. The results indicate that an increase in energy efficiency of 20 percent will increase emissions of CO 2 by approximately 5 percent. To reduce the CO 2 emissions to their initial level, CO 2 tax must be raised by 130 percent. This tax increase will reduce the emissions of sulphur dioxide to below their initial level, but will leave the emissions of nitrogen oxides at a higher level than initially. One of the premises implied in paper [II] is that the changes in consumer prices, as a result of changes in environmental taxes, may send a different signal to the consumer compared with other changes in consumer prices, such as changes in producer price. In addition, this assumed difference in the signaling effect of the changes in environmental taxes, compared to changes in the producer price, may also differ between different commodities. To achieve the objectives a system of demand functions for Swedish households is estimated. To test for the signaling effect of environmental taxes the consumer price for energy goods is partitioned into a producer price part and a tax part. In Paper [III], we estimate the income elasticity of demand for recreational services and other traditional groups of goods in Sweden and we test for potential changes in such estimates over the twentieth century. The paper uses Swedish household surveys for the years 1913, 1984, 1988, and 1996. Because of the difficulty of directly observing the demand for recreational services, we employ an indirect methodology by using the demand for some outdoor goods as proxies for the recreational services demand. In paper [IV], we investigate the relationship between pollution and income at the household level. Here we want to investigate, and hence contribute to the existing literature, under what conditions concerning individual preferences and the link between consumption and pollution a linear relationship is to be expected, but also to empirically assess the relationship. To achieve our objective we formulate a model determining different type of households' choice of consumption for goods. Furthermore we link the demand model to emission functions for the various goods. The results from the empirical analysis show that, at least in a close neighborhood of observed income/pollution, we can reject linearity for all three types of pollutions, CO 2 , SO 2 , and NO x. According to our results the pollution/income relationships are all strictly concave. Thus the implication is that the income distribution seems to matter in the sense that equalization of income will lead to higher emissions. Furthermore it is shown that the slope as well as the curvature differ between different types of households, which means that preferences differ across households.

International Journal of Energy Economics and Policy Testing the Environmental Kuznets Curve Hypothesis in Portugal

2015

This paper provides empirical evidence of an environmental Kuznets curve (EKC) hypothesis for Portugal by applying autoregressive distributed lag bounds testing approach from 1971 to 2008. In order to capture Portugal's historical experience, demographic changes and international trade on carbon emissions, we augment the traditional income-emissions model with variables such as energy consumption, urbanization, and trade openness in time series framework. Empirical results confirm the evidence of EKC hypothesis in both the short-run and long-run. All variables carry the expected signs except trade openness. Despite the success of Portugal in containing CO 2 emissions so far, it is important to note that in recent years, carbon emissions have risen. In order to comply with the 1992 Kyoto Protocol on CO 2 emissions, there is need for policies that focus on the sectors responsible for CO 2 emissions.

The role of consumption patterns, demand and technological factors on the recent evolution of CO2 emissions in a group of advanced economies

Ecological Economics, 2013

Changes in production structures and modifications of patterns of consumption are key factors in the fight against environmental harm. Initiatives such as Agenda 21, promoted by the UN, highlight the need to evaluate the relationships among factors of production and consumption, innovation and demographics, and the environment, in the attainment of sustainable development. In this context, our work studies in depth those factors underlying the economic activity of households, in a representative group of European Union countries and the US. Within the framework of an input-output model, a Structural Decomposition Analysis is considered in order to identify the weight that growth in demand, changes in patterns of consumption, changes in the distribution of income, the substitution of inputs, and changes in energy intensity have all had on the evolution of CO 2 emissions. The work specifically seeks to identify common patterns and differential behaviors among productive sectors in the European social environment. The results show that growth in demand, and therefore in production, largely absorbs the limited effect of technological and efficiency improvements and the incipient changes observed in consumption patterns.

Assessing the Emissions Related to European Households’ Expenditures and Their Impact on Achieving Carbon Neutrality

Climate

The European Green Deal comprises various policy initiatives with the goal of reaching carbon neutrality by 2050. The “Fit for 55 packages” include the Social Climate Fund, which aims to help, among others, vulnerable households and transport users meet the costs of the green energy transition. Thus, analyzing households’ expenditures and the associated carbon emissions is crucial to achieving a net-zero society. In the present study, we combine scenarios of households’ expenditures according to the Classification of Individual Consumption According to Purpose with economic decoupling scenarios to assess, for the first time, the European carbon budget allocation on a consumption basis. Expenditure projections based on socioeconomic scenarios were calculated using the Bayesian structural time series, and the associated emissions were estimated through the greenhouse gas intensity of the Gross Domestic Product. The model can be used to report the carbon budget of households and monito...

Sustainable consumption: fiscal policies and household behaviour

2019

The aim of this thesis is to investigate the influence of climate and health policies on personal well-being and the environment or both as well as how household behaviour influences the sustainability of health goals – prevalence of obesity. The most important contribution of this thesis is the application of new methods, use of experimental data and incorporation of national climate and health policy goals into our analysis. The thesis has six chapters, the first chapter deals with the introduction of the thesis whilst the last chapter summarizes the conclusion from the four main chapters comprising of four papers. The second Chapter investigates the effectiveness of carbon tax to promote climate-friendly food demand, welfare and diet quality in Spain. Tax policy scenarios were based on EU alternative social cost of emissions. Own- and cross-price elasticities of sixteen food groups were calculated from incomplete Exact Affine Stone Index (EASI) food demand system. Results show th...