IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/24923.html
   My bibliography  Save this paper

Per Capita Income, Consumption Patterns, and CO₂ Emissions

Author

Listed:
  • Justin Caron
  • Thibault Fally

Abstract

This paper investigates the role of income-driven differences in consumption patterns in explaining and projecting energy demand and CO₂ emissions. We develop and estimate a general-equilibrium model with non-homothetic preferences across a large set of countries and sectors, and trace embodied energy consumption through intermediate use and trade linkages. Consumption of energy goods is less than proportional to income in rich countries, and more income-elastic in low-income countries. While income effects are weaker for embodied energy, we find a significant negative relationship between income elasticity and CO₂ intensity across all goods. These income-driven differences in consumption choices can partially explain the observed inverted-U relationship between income and emissions across countries, the so-called environmental Kuznets curve. Relative to standard models with homothetic preferences, simulations suggest that income growth leads to lower emissions in high-income countries and higher emissions in some low-income countries, with only modest reductions in world emissions on aggregate.

Suggested Citation

  • Justin Caron & Thibault Fally, 2018. "Per Capita Income, Consumption Patterns, and CO₂ Emissions," NBER Working Papers 24923, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:24923
    Note: EEE ITI
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w24923.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yannic Rehm & Lucas Chancel, 2022. "Measuring the Carbon Content of Wealth Evidence from France and Germany," Working Papers halshs-03828939, HAL.
    2. Moz-Christofoletti, Maria Alice & Pereda, Paula Carvalho, 2021. "Distributional welfare and emission effects of energy tax policies in Brazil," Energy Economics, Elsevier, vol. 104(C).
    3. Moritz A. Drupp & Ulrike Kornek & Jasper N. Meya & Lutz Sager, 2021. "Inequality and the Environment: The Economics of a Two-Headed Hydra," CESifo Working Paper Series 9447, CESifo.
    4. Yannic Rehm & Lucas Chancel, 2022. "Measuring the Carbon Content of Wealth Evidence from France and Germany," World Inequality Lab Working Papers halshs-03828939, HAL.
    5. Haug, Alfred A. & Ucal, Meltem, 2019. "The role of trade and FDI for CO2 emissions in Turkey: Nonlinear relationships," Energy Economics, Elsevier, vol. 81(C), pages 297-307.
    6. Michael Cary, 2020. "Have greenhouse gas emissions from US energy production peaked? State level evidence from six subsectors," Environment Systems and Decisions, Springer, vol. 40(1), pages 125-134, March.
    7. Uygar Ozesmi, 2019. "The Prosumer Economy -- Being Like a Forest," Papers 1903.07615, arXiv.org.
    8. Carl Gaigné & Lota D. Tamini, 2021. "Environmental Taxation and Import Demand for Environmental Goods: Theory and Evidence from the European Union," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(2), pages 307-352, February.

    More about this item

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:24923. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.