Skip to main content Accessibility help
×
Home

Affluence and emission tradeoffs: evidence from Indonesian households' carbon footprint

  • Mohammad Iqbal Irfany (a1) and Stephan Klasen (a2)

Abstract

This study estimates Indonesian households’ carbon emissions that are attributed to their expenditures in 2005 and 2009 to analyze the pattern, distribution and drivers of their carbon footprint. Employing an input-output-emission-expenditure framework, the authors find a significant difference in household carbon emissions between different affluence levels, regions and educational levels. They also find that, while many household characteristics influence emissions, total expenditure is by far the most important determinant of household emissions, both across households and over time. Consequently, emissions inequality is very similar to expenditure inequality across households. The decomposition analysis confirms that changes in emissions are predominantly due to rising expenditures between the two periods, while expenditure elasticities analysis suggests that the rise in household emissions is mainly caused by the overall rise in total household expenditure, and not by shifting consumption shares among consumption categories. The paper discusses policy options for Indonesia to reduce this very strong expenditure–emissions link.

Copyright

References

Hide All
Ang, B.W. (2005), ‘The LMDI approach to decomposition analysis: a practical guide’, Energy Policy 32: 11311139.
Bin, S. and Dowlatabadi, H. (2005), ‘Consumer lifestyle approach to US energy use and the related CO2 emissions’, Energy Policy 33(2): 197208.
Cameron, A.C. and Trivedi, P.K. (2010), Microeconometrics Using Stata (revised edn) College Station, TX: Stata Press.
Chow, G.C. and Li, J. (2014), ‘Environmental Kuznets curve: conclusive econometric evidence for’, Pacific Economic Review 19(1): 17.
Deaton, A. and Kozel, V. (2005), ‘Data and dogma: the great Indian poverty debate’, World Bank Research Observer 20(2): 177199.
Deaton, A. and Muellbauer, J. (1980), Economics and Consumer Behavior, Cambridge: Cambridge University Press.
EDGAR (2016), Emission Database for Global Atmospheric Research (EDGAR), Release Version 4.3.2, [Available at] http://edgar.jrc.ec.europa.eu/
Girod, B. and de Haan, P. (2009), ‘GHG reduction potential of changes in consumption patterns and higher quality levels: evidence from Swiss household consumption survey’, Energy Policy 37(12): 56505661.
GOI (Government of Indonesia) (2015), Intended Nationally Determined Contribution, Republic of Indonesia, Geneva: UNFCCC.
GOI (Government of Indonesia) (2016), First Nationally Determined Contribution, Government of Indonesia, Geneva: UNFCCC.
Grossman, G.M. and Krueger, A.B. (1995), ‘Economic growth and the environment’, Quarterly Journal of Economics 110(2): 353377.
Grunewald, N. (2013), ‘ Growth, carbon dioxide emissions, climate and wellbeing ’, PhD thesis, Wirtschaftswissenschaftlichen Fakultät, University of Göttingen.
Huff, K., McDougall, R., and Walmsley, T. (2000), ‘Contributing input-output tables to the GTAP data base’, GTAP Technical Paper 1(4.2), Global Trade Analysis Project, West Lafayette, IN.
IEA (International Energy Agency) (2013), CO 2 Emissions from Fuel Combustion, [Available at] http://www.iea.org/publications/freepublications/publication/co2emissionsfromfuelcombustionhighlights2013.pdf.
IPCC (Intergovernmental Panel on Climate Change) (2014), Climate Change 2014: Mitigation of Climate Change, Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Edenhofer, O., Pichs-Madruga, R., Sokona, Y., et al. (eds)], Cambridge and New York, NY: Cambridge University Press.
Irfany, M.I. and Klasen, S. (2016), ‘Inequality in emissions: evidence from Indonesian household carbon footprint’, Environmental Economics and Policy Studies 8(4): 459483.
Jakob, M., Steckel, J.C., Klasen, S., et al. (2014), ‘Feasible mitigation actions in developing countries’, Nature Climate Change 4(11): 961968.
Kaya, Y. (1990), ‘Impact of carbon dioxide emission control on GNP growth: interpretation of proposed scenarios’, Energy and Industry Subgroup Memorandum, IPCC Response Strategies Working Group, Geneva.
Kenny, T. and Gray, N.F. (2009), ‘A preliminary survey of household and personal carbon dioxide emissions in Ireland’, Environment InterTotal Expenditure 35: 259272.
Kok, R., Benders, R.M.J., and Moll, H.C. (2006), ‘Measuring the environmental load of household consumption using some methods based on input–output energy analysis: a comparison of methods and a discussion of results’, Energy Policy 34(17): 27442761.
Lenzen, M. (1998a), ‘Energy and greenhouse gas cost of living for Australia during 1993/94’, Energy 23(6): 497516.
Lenzen, M. (1998b), ‘Primary energy and greenhouse gases embodied in Australian final consumption: an input-output analysis’, Energy Policy 26(6): 495506.
Lenzen, M., Wier, M., Cohen, C., Hayami, H., Pachauri, S., and Schaeffer, R. (2006), ‘A comparative multivariate analysis of household energy requirements in Australia, Brazil, Denmark, India and Japan’, Energy 31(2–3): 181207.
Li, J. and Wang, Y. (2010), ‘Income, lifestyle and household carbon footprints (carbon–income relationship), a micro-level analysis on China's urban and rural household surveys’, Environmental Economics 1(2).
Mishra, S.C. (2009), ‘Economic inequality in Indonesia: trend causes and policy responses’, UNDP Regional Office Paper, Strategic Asia.
Murthy, N., Panda, M., and Parikh, J. (1997), ‘Economic development, poverty reduction and carbon emissions in India’, Energy Economics 19(3): 327354.
Pachauri, S. and Spreng, D. (2002), ‘Direct and indirect energy requirements of households in India’, Energy Policy 30(6): 511523.
Parikh, J., Panda, M., and Murthy, N.S. (1997), ‘Consumption patterns by income groups and carbon dioxide implications for India: 1990–2010’, International Journal of Global Energy 9(4–6): 237255.
PEACE (2007), Indonesia and Climate Change: Current Status and Policies, [Available at] http://siteresources.worldbank.org/INTINDONESIA/Resources/Environment/ClimateChange_Full_EN.pdf.
Renner, S., Lay, J., Schleicher, M., and Nuryartono, N. (2015), ‘Poverty and distributional impact of energy subsidy reform in Indonesia’, Mimeo, GIGA Institute, Hamburg.
Serino, M.N. and Klasen, S. (2015), ‘Estimation and determinants of the Philippines’ household carbon footprint’, Developing Economies 53(1): 4462.
Siagian, U.W.R., Dewi, R.G., Boer, R., Hendrawana, I., Yuwono, B.B., and Ginting, G.E. (2015), Pathways to Deep Decarbonization in Indonesia, Paris: Sustainable Development Solutions Network (SDSN) and Institute for Sustainable Development and International Relations (IDDRI).
Stern, D., Common, M.S., and Barbier, E. (1996), ‘Economic growth and environmental degradation: the environmental Kuznets curve and sustainable development’, World Development 24(7): 11511160.
Torras, M. and Boyce, J.K. (1998), ‘Income, inequality, and pollution: a reassessment of the environmental Kuznets curve’, Ecological Economics 25: 147160.
UNFCCC (2010), ‘United Nations Framework Convention on Climate Change’, [Available at] http://unfccc.int/2860.php.
Wagner, M. (2008), ‘The carbon Kuznets curve: a cloudy picture emitted by bad econometrics?’, Resource and Energy Economics 30(3): 388408.
Wier, M., Lenzen, M., Munksgaard, J., and Smed, S. (2001), ‘Effects of household consumption patterns on CO2 requirements’, Economic Systems Research 13: 259274.
York, R. (2012), ‘Asymmetric effects of economic growth and decline on CO2 emissions’, Nature Climate Change 2: 762764.
Yusuf, A.A. (2006), ‘On the re-assessment of inequality in Indonesia: household survey or national account?’, MPRA Paper No. 1728, [Available at] https://mpra.ub.uni-muenchen.de/1728/.

Related content

Powered by UNSILO
Type Description Title
PDF
Supplementary materials

Irfany and Klasen supplementary material
Online Appendix

 PDF (1.3 MB)
1.3 MB

Affluence and emission tradeoffs: evidence from Indonesian households' carbon footprint

  • Mohammad Iqbal Irfany (a1) and Stephan Klasen (a2)

Metrics

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed.