The role of lifestyle changes in low-emissions development strategies: an economy-wide assessment for Brazil

Abstract

ABSTRACTReconciling climate and socioeconomic goals is a significant challenge in the developing world. Improving living standards is imperative. However, if emerging middle-classes in developing countries mirror current western consumption patterns, the chances of stabilizing greenhouse gas (GHG) emissions at safe atmospheric concentration levels will undoubtedly be reduced. In this sense, the mitigation potential of changing consumption patterns has been increasingly acknowledged. A growing body of literature explores what new consumption patterns might look like, along with their potential contribution to reducing emissions.This paper simulates shifts in household behaviour using a macroeconomic framework. We apply a hybrid computable general equilibrium model with six representative household groups to simulate exploratory scenarios for the Brazilian economy up to 2050. In the reference scenario, household demand is defined by current trends and standards. Consumption patterns converge among income groups, leading to major increases in demand for energy, transportation, consumer goods and services, especially for poorer households. This scenario is contrasted with an alternative pathway in which households seek a less carbon-intensive lifestyle. Our results indicate that a major gap in consumption levels and associated emissions between the poorest and richest households persists in the long run. We also show that sustainable practices contribute to significantly reducing energy-related GHG emissions with minor variations in GDP, employment and income distribution.Key policy insightsThere is a comprehensive portfolio of consumer strategies that can contribute to lowering the GHG emissions intensity of consumption at the household level in Brazil.Through a dematerialized consumption profile, households can contribute to mitigating up to 17% of energy-related GHG emissions compared to a reference projection in 2050.Emissions reduction can be achieved with minor economic losses. Impacts on employment are less than on GDP, since there is a structural shift towards labour-intensive sectors, namely services. However, this comes at the expense of a rise in price levels, given that higher wages lead to an increase in production costs.Per capita emissions from energy use are significantly higher for wealthier households, compared to poorer ones. Therefore, the greatest opportunities for decarbonizing consumption reside in policy interventions that target upper income groups.