Ž .
Energy Economics 22 2000 423]440
Impact of household consumption on CO
2
emissions
Jesper Munksgaard
a,U
, Klaus Alsted Pedersen
a
, Mette Wien
a,b
a
AKF, Institute of Local Go
¨
ernment Studies, Nyropsgade 37, DK-1602 Copenhagen, Denmark
b
National En
¨
ironmental Research Institute, Department of Policy Analysis, P.O. Box 358, DK-4000 Roskilde, Denmark
Abstract
Danish household consumption increased by 58 over the period 1966]1992 while CO
2
emissions only increased by 7. Using decomposition analysis we investigated the global CO impact of Danish household consumption from 1966 to 1992. Our conclusion is that
2
overall growth in private consumption } but not changes in the composition of consump- tion } is the key to understanding the increase in CO emissions. However, the effect of
2
growth in private consumption has been partly offset by substantial energy conservation in the energy supply and manufacturing sectors. Q 2000 Elsevier Science B.V. All rights
reserved.
JEL classification: Q40
Keywords: CO ; Household consumption; Decomposition analysis
2
1. Introduction
The Danish Government’s energy action plan ‘Energy 21’ sets the ambitious goal Ž
of reducing CO emissions by 20 in 2005 compared to the 1988 level Ministry of
2
. Environment and Energy, 1996 . However, it has proven difficult to control CO
2
emissions which have only decreased by 4 between 1988 and 1996. Danish consumers are partly responsible for this.
U
Corresponding author. Tel.: q45 33 11 0300; fax: q45 33 15 2875. Ž
. Ž
. Ž
. E-mail addresses:
jmuakf.dk J. Munksgaard , kapakf.dk K.A. Pedersen , mwakf.dk M. Wien . 0140-9883r00r - see front matter Q 2000 Elsevier Science B.V. All rights reserved.
Ž .
PII: S 0 1 4 0 - 9 8 8 3 9 9 0 0 0 3 3 - X
J. Munksgaard, K.A. Pedersen r Energy Economics 22 2000 423]440 424
In the present article we focus on CO emissions associated with private
2
consumption. Our main point is that changing consumer habits and household demand towards more environmental detrimental commodities represents the main
challenge with respect to CO emission reduction targets.
2
Using structural decomposition analysis, we have analysed the factors affecting the development in CO emissions from private consumption over the period
2
1966]1992, distinguishing between direct and indirect CO emissions. Direct CO
2 2
emissions are generated by direct household energy use whereas indirect CO
2
emissions are generated in the industrial sectors producing non-energy commodi- ties demanded by the households. The study thus examines the influence of both
consumer behaviour and behaviour of the firm. The article decomposes CO emissions from Danish household consumption at
2
the global level, i.e. emissions from imported commodities as well as commodities produced in Denmark are taken into account. The reason for doing so is that
Danish consumers are responsible for the global environmental consequences of their consumption.
1
Section 2 below describes the model and methodology while Section 3 describes the data applied and Section 4 reports the results of the analysis. Finally, Section 5
summarises the conclusions.
2. Model and methodology
