Are we turning a brighter shade of green? The relationship between household characteristics and greenhouse gas emissions from consumption in New Zealand

Corey Allan, Suzi Kerr and Campbell Will ()
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Campbell Will: Motu Economic and Public Policy Research

No 15_06, Working Papers from Motu Economic and Public Policy Research

Abstract: We test whether New Zealand households have become greener consumers by estimating environmental Engel curves (EECs), which describe the relationship between household income and the pollution embodied in a household’s consumption bundle. Our pollutants of interest are greenhouse gases (GHGs). To our knowledge, this is the first paper that tests for a change over time in climate change-related household behaviour. We calculate the greenhouse gases embodied in household consumption bundles using standard environmental input-output (IO) analysis combined with detailed household expenditure data from the 2006/07 and 2012/13 waves of the New Zealand Household Economic Survey. Consistent with international literature, we find that emissions increase less-than-proportionately with household expenditure (a proxy for permanent income). There is significant variation in expenditure elasticities across consumption categories; emissions from household energy are unresponsive to household expenditure, while emissions from transport are highly responsive to expenditure. Household expenditure and composition explain the majority of the cross-sectional variation in household emissions. We conduct a simple test for changes over time in household consumption patterns that affect emissions, taking price changes into account. We find that, controlling for a rich set of household characteristics, household emissions were marginally lower on average in the 2012/13 survey than the 2006/07 survey. This result is largely driven by a reduction in emissions from household energy. We also find that wealthier households had a smaller reduction in emissions between surveys. Our results suggest this is due to higher levels of international air travel by wealthier households.

Keywords: Climate change; greenhouse gas emissions; household behaviour; consumption; input–output model (search for similar items in EconPapers)
JEL-codes: D12 D57 Q54 Q56 Q57 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2015-11
New Economics Papers: this item is included in nep-ene, nep-env and nep-tre
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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