Template-Type: ReDIF-Paper 1.0
Author-Name: Corey Allan
Author-X-Name-First: Corey
Author-X-Name-Last: Allan
Author-Email: corey.allan@motu.org.nz
Author-Workplace-Name: Motu Economic and Public Policy Research
Author-Name: Suzi Kerr
Author-X-Name-First: Suzi
Author-X-Name-Last: Kerr
Author-Email: suzi.kerr@motu.org.nz
Author-Workplace-Name: Motu Economic and Public Policy Research
Author-Name: Campbell Will
Author-X-Name-First: Campbell
Author-X-Name-Last: Will
Author-Email: campbell.j.will@nz.pwc.com
Author-Workplace-Name: Motu Economic and Public Policy Research
Title: Are we turning a brighter shade of green? The relationship between household characteristics and greenhouse gas emissions from consumption in New Zealand
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.
Length: 45 pages
Creation-Date:  2015-11
File-URL: https://motu-www.motu.org.nz/wpapers/15_06.pdf
Number: 15_06
Classification-JEL: Q56, Q57, D12, Q54, D57
Keywords: Climate change; greenhouse gas emissions; household behaviour; consumption; input–output model
Handle: RePEc:mtu:wpaper:15_06