What is the role of profit and luxury consumption in the ecological transition?

Federica Cappelli and Stefano Di Bucchianico

Economic Modelling, 2025, vol. 147, issue C

Abstract: Empirical evidence has demonstrated the essential role of income distribution and richer households’ consumption patterns in determining excessive consumption–generated greenhouse gas (GHG) emissions. To analyse this issue at the theoretical level, we employ the distinction between subsistence and luxury emissions and examine the connection between income distribution and environmentally wasteful emissions caused by luxury consumption. In our model, physical surplus production makes room for positive profitability. Income in the form of profits enables wasteful luxury consumption and boosts consumption–generated GHG emissions. We illustrate greener consumption, reformist and just transition scenarios to delineate social and environmental boundaries. Only the just transition scenario is found to be a viable option to respect both boundaries.

Keywords: Profit rate; Luxury goods; Greenhouse gas emissions; Just transition; Climate change (search for similar items in EconPapers)
JEL-codes: B24 Q52 Q57 (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0264999325000458
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:147:y:2025:i:c:s0264999325000458

DOI: 10.1016/j.econmod.2025.107050

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().