The Carbon Footprint of Indian Households Nicole Grunewald, Mirjam Harteisen,Jann Lay, Jan Minx and Sebastian Renner

Hypothesis Research Questions: 1.What are the main determinants of the growing carbon footprint in fast growing emerging countries? 2.Which consumption categories are the most carbon intensive, which ones are the least intensive? 3.How will carbon emissions develop over time when household income increases?

Hypothesis Unique features:  Detailed view on household carbon footprint in India  Valuable insight for future climate & development research by adopting a micro perspective on carbon emissions Why focus on the household carbon footprint in India?  We expect to see large income gains in this countries  Accounting for emissions consumed rather than emissions produced fulfills equity criteria

Hypothesis Household Carbon Footprint 2004/05 Source: NSS 2006 and CSO 2005

Hypothesis

Related Literature Parikh et al. (1997) estimate CO 2 requirements / carbon footprint of households in India with different incomes, rural and urban, estimations for 1990 and 2010 –Differing energy intensities enable CO 2 reductions by changing consumption patterns Lenzen (1998) analyze energy and carbon footprint of households in Australia –The indirect energy and GHG demand matters more (65%) Pachauri and Spreng (2002) analyze energy requirements of households in India for –Higher energy requirements due to rising income and population

Related Literature Pachauri (2004) analyzes energy requirements of households in India controlling for household characteristics in 1993 and 1994 and divide 9 consumption categories –Income matters but characteristics as well Bin and Dowlatabadi (2005) analyze energy and CO 2 requirements of households in the US in 1997 and divide 10 consumption categories –Indirect energy requirements represent the larger share Lenzen et al. (2006) analyze the effect of rising income on energy demand in Australia, Brazil, Denmark, India and Japan –No Kuznets type relationship, energy elasticities vary across countries

Data NSS survey on Indian household expenditure –Representative survey of India consisting households –Data on overall household expenditure disaggregated to around 400 items –Household characteristics like: rural or urban, type of housing, income class, status, size, religion IO Tables from Central Statistical Organization 2004 –The whole Indian economy disaggregated to 130 sectors

Methodology - Carbon Intensities

Descriptive Analysis Emission Intensities of Indian Household Expenditure 04/05 Source: NSS 2006 and CSO 2005

Descriptive Analysis Household Expenditure 04/05 Urban and Rural Source: NSS 2006 and CSO 2005

Descriptive Analysis Household Carbon Footprint 04/05 Urban and Rural Source: NSS 2006 and CSO 2005

Descriptive Analysis ● Expenditure categories with high carbon intensity and growing share of total expenditures:  fuel and light: coal, electricity etc.  Entertainment: recreation goods  Toilet articles: soap, shampoo etc.  Clothing ● Expenditure categories with low carbon intensity and growing share of total expenditures:  Consumer services: telephone charges, barber etc.  Education: books, school fees etc.

Methodology – Household Carbon Footprint Where: CF i is the (log) carbon emissions by each household i Income i is measured as total expenditure of household i and in the following results it is represented by income quintiles Characteristics i are household control variables such as religion, gender of the household head, education u i is the error term

Hypothesis

Results – Determinants of the HH CO2 Footprint Note: OLS regression, dependent variable is the (log) household carbon footprint, R 2 =0.23 and 124,643 Observations; Source: Authors estimations

Results – Determinants of the HH CO2 Footprint Note: OLS regression, dependent variable are the residuals, R 2 =0.81 and 124,001 Observations; Source: Authors estimations

Results Income is the strongest driver of household carbon emissions Moving from the poorest quintile to the richest increases the household carbon footprint by more than 80% One further household member increases the carbon footprint by about 35% But household characteristics also play a role, female headed households and households of Hindu religion emit on average less The choice of energy source for cooking plays role, LPG households emit more then those using kerosene

Outlook Income GroupN. HouseholdsShareMean CO 2 in tTotal CO2 in ktShare in total Low Middle High All Note: High > 10 $ ppp, Middle 2 $ppp, Low 2 $ppp; Source: Authors estimations Distribution of Income Groups and Respective Emissions

Outlook There are currently household's living of less than 2$ ppp per day and are causing about 57% of total emissions If we would want to cut this number of household's living of less then 2$ ppp per day total into half (we anticipate that their income rises to more than 2$ ppp, total emissions could rise from 133kt CO 2 to 157kt CO 2 These scenarios could help countries to get realistic estimates about their future emissions

Conclusion Higher income leads to a higher carbon footprint especially due to the following consumption categories: Fuel and light, clothing and beverages The household carbon footprint of the richest quintile is almost five times the carbon footprint of the poorest quintile When reducing poverty future emissions will have to rise but a change in consumption habits such as energy sources can make this rise less steep

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