Social capital, household income and carbon dioxide emissions: A multicountry analysis

Abstract

As climate change due to carbon dioxide (CO2) emissions is an important issue, the role of households in CO2 emissions reduction through behavioral intervention cannot be ignored. The traditional environmental Kuznets curve (EKC) hypothesis explains the inverted U-shaped relationship between economic growth and the environment. This study expands EKC theory by adding household-level social capital, income, and disaggregated CO2 emissions based on the cross-sectional data of both satellite-monitored data and a large-scale survey of 86,764 respondents across 30 developing and developed countries. The separate and combined effects of self-reported social capital on CO2 emissions are tested by regression, allowing an inverted-U shaped function. The results show that higher community attachment and social trust are associated with higher concern about the global warming issue. Low-income countries show a higher level of concern about global warming than high-income countries. Within a country, individual differences between groups with low and high levels of community attachment and social trust are much larger in high-income countries than in low-income countries. The separate effect of income is associated with increasing CO2 emissions, social capital is associated with decreasing CO2 emissions, and the combined effect of income with social capital is correlated to reduce the positive impact of income on CO2 emissions. Furthermore, by including of social capital with household income, the turning point of household income can be reduced from approximately USD 5900 to USD 4900 and USD 7000 to USD 3300 at the country and region levels, respectively. Overall, the estimated results suggest that increasing social capital may be an effective approach for emissions reduction at the household level.