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

Published online by Cambridge University Press:  09 August 2017

Mohammad Iqbal Irfany  and
Stephan Klasen
Mohammad Iqbal Irfany
Affiliation:
Faculty of Economic Sciences, Georg-August-University of Goettingen, Oeconomicum, Platz der Göttinger Sieben 3, 37073 Göttingen, Germany; and International Centre for Applied Finance and Economics (InterCAFE), Bogor Agricultural University, Indonesia. E-mail: mirfany@uni-goettingen.de
Stephan Klasen
Affiliation:
Faculty of Economic Sciences, Georg-August-University of Goettingen, Germany. E-mail: sklasen@uni-goettingen.de
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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.

Type
Research Article
Information
Environment and Development Economics , Volume 22 , Issue 5 , October 2017 , pp. 546 - 570
Copyright
Copyright © Cambridge University Press 2017 

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