Expenditure elasticity and income elasticity of GHG emissions: A survey of literature on household carbon footprint

Abstract

The relationship between income of households and their carbon emissions is often summed up by a number, the elasticity of the carbon footprint with respect to income. I survey here the cross-sectional studies of household carbon footprints and their estimation of elasticities with respect to income and with respect to expenditures. The distinction between the two elasticities comes from the fact that the saving rate rises with income.I compile published estimates of elasticities of carbon footprint or energy requirements, and I compute new estimates. This totals around eighty estimates (a third of which are newly computed) for over twenty countries. It shows that, generally, the carbon footprint grows less rapidly than expenditures, and confirms that the incomeelasticity is lower than expenditure-elasticity. Unambiguously, the assumption of an income-elasticity equal to 1 is not supported by the published literature.I discuss the difference between carbon inequality and carbon concentration, the ambiguity in the literature between income-elasticity and expenditures-elasticity. I present the limitations of our knowledge on the income-carbon footprint relationship, from contestable assumption in the methodology as well as measurement errors in household budget surveys. I examine how elasticity can be used in "top-down" assessment of global distribution of carbon footprint.

Global Carbon Inequality, 1990-2019: The Impact of Wealth Concentration on the Distribution of World Emissions

“…Available literature typically finds that carbon emissions associated to individual consumption depend on several factors including income and expenditure, as well as households' location, energy conversion technologies, occupation status, habits, age, national regulations and energy mixes [50,87,73,85,68,13,57,71] (see also SI Tables 3.1 and 3.2 for a complete list of studies on the matter). While non-income factors play a significant role in determining direct individual emissions levels (i.e.…”

“…Studies measuring the elasticity of individual carbon emissions (or the strength of the relationship between rising individual income and CO 2 emissions, see Methods) 17 are presented in SI Table 3.1 and A3.2. These studies find that the elasticity of household consumption to emissions typically falls in the 0.9-1.1 range, while the elasticity of household income to emissions typically falls in the 0.5-0.7 range [50,87,73,85,2,38,68,13,71]. 18 Using these observed regularities, and taking stock of recent progress in income inequality measurement, it is possible to estimate emissions inequalities between world individuals in a relatively straightforward and transparent manner, over long time spans.…”

Global carbon inequality over 1990–2019

“…Data on individual emission inequalities have been produced for several countries and years by researchers using input-output analysis applied to the environment and household surveys. Available literature typically finds that carbon emissions associated with individual consumption depend on several factors, including income, household location, energy conversion technologies, occupation status, habits, age, national regulations and energy mixes 14,[29][30][31][32][33][34][35][36][37] . While non-income factors play a role in determining individual emission levels, income retains a very large role in explaining variance in emissions between households.…”

Carbon Footprint Research Based on Input–Output Model—A Global Scientometric Visualization Analysis

“…With the popularity of the concept of consumer responsibility, CF associated with the consumption of services and goods has attracted more and more attention. A country’s CF can be split into household (private) consumption, public consumption, and investment [ 74 ]. The environmental impact of household consumption has remained one of the hot topics in CF studies over the last year.…”