Housing wealth and household carbon emissions: The role of homeownership in China

Abstract

Using panel data collected from the 2012 and 2016 China Family Panel Studies (CFPS) surveys, this paper measures household carbon footprints and assesses wealth-related effects on household carbon emissions. We find that housing wealth has an evidently larger impact on household carbon emissions, almost twice as large as that of financial wealth. The larger effect is likely attributable to the fact that Chinese households have limited investment channels, and the overwhelming proportion of household wealth is tied up in housing. We also find that housing wealth effects on household carbon emissions vary across different types of homeownership. Renters, who do not own their homes, produce higher carbon emissions than do homeowners, on average. In terms of emission elasticity, households with sole homeownership have the strongest and most positive emission response to housing wealth appreciation. The significant impacts of housing wealth offer essential and useful information for predicting China's future emission trajectory and point to the potential impact of housing policy as an effective tool for reducing carbon emissions.