Affluence and emission trade-offs: evidence from Indonesian household carbon footprint

The objectives of this study are to analyze the household carbon footprint pattern in Indonesia and to analyze the determinants of the growing carbon footprint in this emerging economy. To measure the household emissions, we combine national input-output, emission database to generate sectoral CO2 emission intensities and matched these intensities with two waves of national expenditure surveys from 2005 and 2009. We then use this household CO2 emission for investigating the drivers of the rise in emissions from the micro perspective. Comparing CO2 intensities, the results show that transportation, fuel-light, are the two most intensive emitting sectors in Indonesia. We also found a significant difference of household carbon emission comparing between per capita expenditure level, region, and education. Regression analysis suggests that expenditure is the main determinant of household emission. Although other household characteristics determine the variation of emission, it is shown that varying affluent level differs significantly in term of carbon footprint. The decomposition analysis confirms that changes in emission are dominantly contributed by the rise of expenditure comparing between household level and over the two periods. Expenditure elasticities analysis suggest that the rise of household emission is mainly caused by general volume increase in overall household consumption, and not by shifting the share of expenditure amongst consumption basket.