Consumption-based Carbon Research Articles

Race to Top or Race to Bottom Approach: Disaggregated Effect of Fiscal Decentralization and Its Implications for Consumption-Based Carbon Emissions

Race to Top or Race to Bottom Approach: Disaggregated Effect of Fiscal Decentralization and Its Implications for Consumption-Based Carbon Emissions

Determinants of consumption-based and production-based carbon emissions

Determinants of consumption-based and production-based carbon emissions

Navigating the green future: Unraveling the role of fintech, decentralization, natural resources, and monetary policy uncertainty in China

Improving environmental integrity is a crucial policy agenda in achieving sustainable development goals, and reliable carbon emission measure is imperative in devising an effective climate strategy. Increasing climate susceptibility instigates us to explore the factors of ecological sustainability. Therefore, we scrutinize the dynamic influence of monetary policy uncertainty, mineral resources dependency, Fintech, fiscal decentralization, and trade on consumption-based carbon emissions (CCE) in China using the quarterly data from Q1-2005 to Q4-2021. For estimation, the study employed the bootstrap autoregressive distributed lag (ARDL) method, and the overall findings exhibit that fiscal decentralization significantly decreases the CCE, while monetary policy uncertainty, Fintech, and natural resources dependency increase CCE. Imports are responsible for higher CCE, while exports report the opposite. Consistent findings are endorsed by the short-run estimates with lower magnitude, and the error correction term significantly adjusts towards the steady state equilibrium with 61.0% quarterly adjustment in case of any deviation from stready state equilibrium. The results also confirm a bi-directional causality among all variables except Fintech, policy uncertainty, and CCE. This study offers relevant policy recommendations.

Analyzing the impacts of renewable energy, patents, and trade on carbon emissions-evidence from the novel method of MMQR.

Achieving sustainable development necessitates proactive measures to mitigate the economy's negative impact on environmental standards. A new empirical association between renewable energy patent innovation and net international trade on carbon emissions in ASEAN countries from 1990 to 2021 is presented, along with its significance. Using present panel data techniques, this study investigates the connections between these factors. Second-generation cointegration and unit root tests, as well as a novel method of Moments Quantile Regression, are used in the econometric procedure. Compared to standard quantile regression, this method is more resistant to outliers and provides an asymmetric relationship between the variables. The findings show that trade increases carbon emissions in countries with medium to high emissions, that patent innovation contributes to increasing emissions, and that renewable energy mitigates carbon emissions in countries with low to medium emerging economies. Our results are consistent with other specifications, including quantile regression canay (Canay 2011), fully modified, dynamic, and fixed effect regressions, proving the EKC hypothesis. These countries need to prioritize greener products and adopt advanced manufacturing technologies to reduce carbon emissions from consumption. However, as prosperity increases, it also leads to higher consumption-based carbon emissions, worsening ecological damage in the region. Implementing policies like trade synchronization and increasing investment in patent innovations are proposed in this study to lower the current level of carbon emissions.

Linking perception and reality: Climate-sustainability perception and carbon footprints in the Nordic countries

Nordic countries are often recognized as leaders in climate-sustainability. A potential dissonance exists, however, between this perception and the measured sustainability of their lifestyles. In global terms, they are highly affluent countries spreading their climate impact beyond their borders by importing a large share of the energy and resources used by their residents. In this research, we focus on the potential dissonance between the self-perceived climate-sustainability of the lifestyles in the Nordic countries and the actual consumption-based carbon footprints (CBCF), estimated through a survey-based CBCF calculator with ∼8000 respondents across Sweden, Norway, Denmark, Finland and Iceland. Using bivariate and regression analysis, the study found that across all levels of climate-sustainability perception the CBCF the respondents ranged from 6.3 to 11.3 tCO2-eq/capita, representing a significant difference (79%) between the highest emitting (very low perception) and lowest emitting groups (high perception). A general negative correlation between elevated levels of climate-sustainability perception and CBCF was found, predominantly in the areas of diet, vehicle possession, and consumption of goods and services. Intriguingly, a counterintuitive increase in CBCF at extremely high levels of climate-sustainability perception was seen. Additional factors that contribute to higher climate-sustainability perception are explored, such as age, climate literacy, and pro-climate attitude (PCA). Conversely, individuals with high incomes or belonging to households with children display lower levels of climate-sustainability perception. Across all perception groups, however, the results confront the perception of the Nordics as climate leaders as Nordic CBCFs were still far above the average CBCF for the lowest global 50% of Earth's population and were far above (∼2–4x) suggested 2030 targets to remain below 1.5 °C warming. The findings of this study serve as an invaluable resource for policymakers aiming to align public perception with effective sustainability measures, thereby assisting in reducing CBCF and achieving global climate goals.

Development of an interactive multi-region enviro-economic equilibrium (IMR3E) model for managing inner- and inter-region carbon-emission mitigation

Under the multiple pressures of climate change, carbon mitigation and economic development, systematically studying the compound effects of economic and environmental policies on the system is desired. An interactive multi-region enviro-economic equilibrium (IMR3E) model is developed to i) explore various carbon-mitigation effects (and their interactions) under multiple policy alternatives (in terms of carbon, income and production taxes) and their combinations. ii) characterize interactions among sectoral activities of multiple provinces, as well as their inner- and inter-region social-economic and environmental (SEE) effects. It is discovered that about 20 % of the carbon emission of the Yangtze River Economic Belt is to meet the final demands in other provinces (mainly in Guangdong and Beijing) outside the YREB. The power generation sector and the non-metallic mineral products industry (including the cement industry) are the main sources of external carbon emissions. Moreover, the composite effects of the implementation of different enviro-economic policies in YREB will be amplified along with the supply chain, and are reflected in the impact on carbon emissions of different provinces. The adjustment of YREB's production tax and carbon tax will have a certain impact on the indirect emission intensity of other provinces, while the income tax will not. For system symbiosis (i.e., an ecological indicator that reflects the fitness of the entire system), adjusting production tax is the most important factor, and a lower production tax level is the most beneficial. Regarding the consumption-based carbon emission intensity of other provinces, carbon tax policy has the greatest impact, with a contribution rate of over 95 %. Moreover, the interaction of carbon tax and production tax should be fully valued when adjusting the industrial structure.

Natural resources, carbon neutrality, and fiscal federalism: Implications for G7 countries amid rising Covid-19 concerns

Growing apprehensions regarding the environment have become a significant focus of recent literature. In this vein, revenue decentralization, expenditure decentralization, natural resource rent, and economic growth gained less prominence in explaining the consumption-based carbon dioxide emissions of the G7 countries amid rising Covid-19 concerns. Thus, the role of these factors is crucial in investigating their impact on environmental sustainability using G7 nations from 1990 to 2021. The preliminary findings assert the existence of cross-sectional dependence, slope heterogeneity, first-order stationary, and long-run equilibrium relationship between the stated variables. The results show that revenue decentralization positively impacts carbon neutrality, while expenditure decentralization, natural resource rent, and economic growth enhance environmental degradation in the region. Regarding the indirect impact, expenditure decentralization positively moderates the influence of natural resource rent; however, the magnitude is less than its direct impact. Concerning the moderating effect of revenue decentralization and natural resource rent, the outcomes revealed that revenue decentralization mitigates the destructive consequences of natural resource dependency and subsidizes the emissions mitigating effects. The study suggests a transparent fiscal decentralized setup could help to achieve environmental sustainability.

Can sustainable resource management overcome geopolitical risk?

Sustainable development is a serious concern for policymakers and researchers worldwide, as it requires the management of economic growth, social progress, and environmental protection. In this context, our study examines the influence of geopolitical risks, natural resource rent, and key economic factors on consumption-based carbon emissions within the G-7 countries. Based on panel data spanning from 1990 to 2020, our findings indicate a direct positive relationship between geopolitical uncertainties and carbon emissions, leading to heightened environmental damage. In contrast, revenues from natural resources show an inverse connection with emissions. Additionally, while higher imports and GDP escalate emissions, exports tend to mitigate carbon emissions. The current study contributes to the literature by highlighting the importance of promoting stable political environments and sustainable resource management practices to reduce carbon emissions and ensure resource efficiency for sustainable development in G-7 economies. These findings suggest that policymakers should prioritize environmentally friendly policies and encourage sustainable resource use to achieve sustainable development.

Do environmental taxes, environmental innovation, and energy resources matter for environmental sustainability: Evidence of five sustainable economies

This study explores the relationship between environmental taxation, environmental technologies, energy resources, and consumption-based carbon emissions in five leading green economies from 2000 to 2019. The study applied the Cross-Sectional Auto-Regressive Distributed Lag (CS-ARDL) model to derive benchmark results, with Augmented Mean Group (AMG) and Common Correlated Effect Mean Group (CCEMG) techniques being utilized for conducting robustness analyses. The empirical findings suggest that environmental taxation, environmental innovations, and the consumption of renewable energy are associated with a reduction in consumption-based carbon emissions, thereby contributing to enhanced environmental sustainability. Conversely, the utilization of non-renewable energy is linked to an increase in consumption-based carbon emissions. These results align with the objectives outlined in the Sustainable Development Goals' 2030 agenda, particularly SDG 7 (Affordable and Clean Energy), SDG 9 (Industry, Innovation, and Infrastructure), and SDG 13 (Climate Action), offering valuable policy implications.

The city within the global: A framework for the simultaneous estimation of city emissions metrics

In line with national targets, sub-national governments – including cities – are introducing targets to reduce the emissions associated with economic activity within or associated with a particular geography. Cities are important drivers of not only emissions but also economic activity and are embedded into complex economic systems which reach beyond their boundaries, which can raise major issues in identifying whether a city is assisting in promoting sustainability across a wider spatial level. This paper sets out a methodology to downscale global Input Output tables to city-level and use these to calculate production- (territorial) and consumption-based carbon accounts at the city level simultaneously. Illustrating this for the case of Glasgow, Scotland, we show that the city's territorial emissions are significantly lower than its consumption-based carbon footprint (considering both the Areal and Personal Carbon Footprint), but that both metrics are sensitive to assumptions about the emissions intensity of individual sectors. Our results highlight the importance of data quality and accuracy, and the benefits of local knowledge, rather than the unquestioned use of national metrics.

Towards BitCO2, an individual consumption-based carbon emission reduction mechanism

Human activities, such as burning fossil fuels for electricity generation, heating, and transport, are the primary drivers of a large amount of greenhouse gases emission. The individual consumers, able to influence the supply-chains behind the commodities their chose to fulfil their needs is the driver behind production and, consequently, its impacts. Thus, the active and willing participation of citizens in combatting climate change may be pivotal to address this issue. The present work is aimed at presenting and modelling a novel market-based carbon emission reduction mechanism, called BitCO2, designed to incentivize individual consumption choices toward lower carbon footprints. This mechanism is tested for the Italian private transportation sector thanks to an ad hoc developed System Dynamics model. The Battery Electric Vehicle (BEV) adoption, if compared with the Internal Combustion Engine Vehicle (ICEV) one, cause less CO2 emissions per km travelled. After a certain number of travelled km, a BitCO2 token is assigned to BEV owners for each ton of avoided CO2. This token can be exchanged in a dedicated market and used to get a discount on insurance services. Assuming a Social Cost of Carbon of 9.22 [2.13–22.3] €/tonCO2eq, model results show that the BitCO2 mechanism would allow for a cumulated CO2 emission reduction of 973 [68.9–5’230] ktonCO2eq over 20 years of operation with a peak of 39.3 [5.34–189] thousand additional BEV registration per year.

Does reducing income inequality promote the decoupling of economic growth from carbon footprint?

Mitigating climate change, improving economic growth, and reducing income inequality are three of Sustainable Development Goals (17 SDGs). It has been well understood that economic growth has a significant impact on carbon footprint, but it remains unclear whether this impact will be mitigated or intensified by reducing income inequality. By applying the Multi-Regional Input-Output model, this study assesses the consumption-based carbon footprints of 43 major economies over the period 1995–2019 and conducts the corresponding empirical analysis. Through examining the moderating effect of income inequality (Gini coefficient) on the relationship between economic growth (GDP per capita) and consumption-based carbon footprint (CO2 per capita), we demonstrate that a lower Gini coefficient – a more equitable distribution of income − could significantly promote the decoupling of economic growth from carbon footprint. The results also show a heterogeneous moderating effect of income inequality – reducing income inequality in rich countries helps decouple economic growth from carbon footprint more than in poor countries. This study contributes to a better understanding of the synergy among economic growth (SDG 8), income inequality reduction (SDG 10), and carbon mitigation (SDG 13). Given that reducing income inequality in the context of economic growth can have significant benefits for carbon mitigation, we would suggest that income inequality reduction should be incorporated into climate action, particularly in rich countries.

The effects of carbon-related news on carbon emissions and carbon transfer from a global perspective: Evidence from an extended STIRPAT model

Climate change poses an enormous challenge to countries across the world. News is a crucial channel to draw society's attention to this issue and strengthen climate governance initiatives, such as carbon emission reduction. The aim of this research was to investigate the effects of carbon-related news on carbon emissions and carbon transfer. First, we analyzed the topics of carbon-related news from media outlets such as ABC, CNN, and The Guardian from 2009 to 2019. Then, we calculated the carbon emissions from both production- and consumption-based perspectives and constructed the carbon transfer network of major countries around the world. Finally, we examined the direct and lag effects of carbon-related news attention and contents on carbon emissions and carbon transfer by using the extended population, affluence, and technology (STIRPAT) model as the analytical framework. The results showed the following. First, countries are paying increasing attention to carbon-related issues with the rise of global carbon emissions, and they mainly focus on the social aspects of carbon emissions. Second, there are differences in production- and consumption-based carbon emissions by country. The amount of embodied carbon transfer between countries has increased over time and the carbon transfer network has become tighter. Finally, carbon-related news has a positive impact on improving carbon emissions and carbon transfer worldwide. Different news topics have also shown varying effects on carbon emissions and carbon transfer. In summary, this study further revealed the impacts of carbon-related news on carbon emissions and transfer and accordingly provided policy implications in carbon emission reduction for the government.

Carbon emissions, environmental distortions, and impact on growth

The climate changes over the past few decades are a significant threat to the future of humanity. In this regard, in current years, consumption-based carbon emanations have dominated research on environmental issues and international trade. This study examines how carbon emission influences the economic growth of the top five polluted economies of the world. To get an estimate on an empirical level, the study uses a Panel Autoregressive Distributed Lag (PARDL) approach. After a shock, the system shifts towards a long-run equilibrium, as the estimated results show that the ECM value is negative and significant. Empirics show that energy consumption and GDP are positively and significantly associated with CO2 emissions in both the long and short run. In addition, the GDP2 effect indicates the Kuznets curve (EKC) effect in the top five polluted countries. Industrial production is positively linked with CO2 emissions in the short term but negatively correlated and statistically insignificant in a long time. Finally, it is recommended that policymakers focus on reducing pollution, especially in high‑carbon emissions, and in other countries, countries that prerequisite to cutting the use of coal and oil energy could help reduce CO2 emissions to protect the environment. In addition, these countries must switch to using clean energy such as natural gas.

Does nuclear energy reduce consumption-based carbon emissions: The role of environmental taxes and trade globalization in highest carbon emitting countries

This research examined consumption-based carbon emission reduction by nuclear energy consumption and environmental tax while considering the context of trade globalization in the highest five emitter nations from 1990 to 2020. This study used various empirical methodologies, including preliminary analysis to check the stationarity and cointegration, the CS-ARDL for long-run analysis, CCEMG, AMG for robustness, and the D-H causality test for short-term pairwise causation. The results indicated that nuclear energy consumption, environmental tax, and trade globalization help to mitigate consumption-based carbon emissions while economic growth and population density boost carbon emissions. Furthermore, the results also found two-way casual connection exists between nuclear energy consumption, population density, and consumption-based carbon emissions. Thus, the results emphasize the need for government policies that encourage nuclear energy and environmental tax as a strategy to reduce carbon emissions and achieve and maintain environmental development.

Structural Characteristics of the Household Carbon Footprint in an Aging Society

The aging population has posed a challenge to China’s carbon neutrality pledge. To study the household carbon footprint in an aging society, this paper has combined the age-specific consumption pattern and environmental input-output life cycle assessment (EIO-LCA) to calculate the carbon footprint of household consumption across age groups, and then identified the key pathways of carbon emissions via structural path analysis (SPA). Results indicate that the elderly contribute 11.65% to total consumption-based carbon emissions. The working group (ages 15–64) has the highest average carbon footprint (0.85 tCO2e), while the elderly group (ages 65 and above) has the lowest average carbon footprint (0.82 tCO2e). Urban households of all ages have a higher carbon footprint than rural households. Housing and food are the dominant sources of the elderly carbon footprint. Notably, the production and distribution of electric power and heat power sector associated with housing energy consumption plays a leading role in the carbon emissions pathways of elderly consumption. Measuring the carbon footprint of older people can support policy designs and decision making in key sectors along the supply chain, and further encourage low-carbon lifestyles among China’s elderly. Additionally, the findings of this study have broad applications, especially for developing countries undergoing demographic transitions.

Understanding the Role of Energy Productivity, Eco-Innovation and International Trade in Shaping Consumption-Based Carbon Emissions: A Study of BRICS Nations.

In recent years, addressing the issue of carbon emissions has gained significant attention in the field of environmental sustainability. This study aims to contribute to the existing literature by investigating the interplay between eco-innovation, international trade, energy productivity, and consumption-based carbon emissions in the context of the BRICS economies. Using data spanning the period from 1990 to 2020, we employ advanced methodological techniques to overcome challenges associated with cross-section dependency, non-stationarity, and heterogeneity. The results of our study provide compelling evidence of a long-term cointegrating association between eco-innovation, energy productivity, economic growth, imports, exports and consumption-based carbon emissions. The results reveal that eco-innovations, exports, and energy productivity are associated with reductions in CO2 emissions. Conversely, imports and GDP growth contribute to higher CO2 emissions. Our findings have significant implications for policymakers, businesses, and stakeholders involved in shaping environmental policies and sustainable development strategies. The observed negative correlations between eco-innovation, exports, energy productivity, and consumption-based carbon emissions offer a clear channel for mitigating environmental pollution. By prioritizing and promoting eco-innovation initiatives, encouraging sustainable exports, and enhancing energy productivity, policymakers can effectively reduce carbon emissions and foster sustainable economic growth.

Measuring inequality of household carbon footprints between income groups and across consumption categories in China

To achieve carbon neutrality, most countries focus on reducing carbon footprint and its inequality based on not only production, but also consumption. We applied multi-source data and methods to measure inequality of consumption-based household carbon footprints (HCFs) between income groups and across consumption categories. Results showed that, per capita household carbon footprints (PHCFs) increased continuously in 2011–2017, from 1.75 t CO2 to 2.47 t CO2. The increment was larger and larger owing to the rapidly growing household consumption expenditure. Average PHCF of high-income households was 5.33 times greater than that of low-income households in 2017. The high-income households should be more responsible for reducing HCFs and implementing the shift to the low-carbon lifestyle. Inequality was significant with a Gini coefficient of 0.458 for total PHCFs. The contribution rate of between-group inequality to overall inequality was increasing, from 42.49% in 2011 to 60.39% in 2017. There was the polarization characteristic in the inequality of HCFs between income groups. Gini coefficients of PHCFs for some categories were much greater than that of total PHCFs. It is necessary to focus on these categories such as rent, car purchase, furniture and durable goods to reduce HCF inequality. This study revealed the key income groups and consumption categories contributing most to HCF and its inequality, which could provide the references for carrying on the studies and actions of reducing them in the developing countries.

Green finance and clean taxes are the ways to curb carbon emissions: An OECD experience

The rising carbon dioxide emissions pose a significant threat to environmental sustainability. The attention, once primarily on production-based emissions, has recently shifted towards consumption-based carbon (CCO2) emissions. While much of the existing literature focuses on production-based impacts, the interplay between green finance, environmental taxes, and CCO2 emissions is yet to be comprehensively explored. To address this knowledge gap, our study investigates the dynamics of these variables across 21 OECD economies from 1990 to 2020, also considering trade activities and economic growth. We employ the second-generation unit root test and methodologies to manage cross-sectional dependence and slope heterogeneity, establishing cointegration among the variables of interest. Applying an innovative quantile regression method adapted for non-normal data distribution, our results highlight economic growth and imports as major drivers of CCO2 emissions, with exports, green finance, and environmental taxes serving as substantial mitigating forces. This pattern remains consistent across all quantiles. Our analysis reveals a unidirectional influence of trade on CCO2 emissions, with bidirectional causality observed between economic growth, green finance, environmental taxes, and CCO2 emissions. In light of our findings, we recommend fostering green finance and levying environmental taxes in industries with high pollution output as key strategies for advancing environmental sustainability.

The impact of manufacturing servitization on consumption-based carbon rebound effect: A global value chain research perspective

This study investigates the causal effect of manufacturing servitization on the consumption-based carbon rebound effect, employing the empirical approach based on the value-added trade and SBM-DEA model. The results show that improving the servitization level will lead to a significant decrease in the consumption-based carbon rebound effect of the global manufacturing industry. Moreover, the main paths through which the manufacturing servitization inhibits the consumption-based carbon rebound effect are the human capital and government management. We also find that the impact of manufacturing servitization is more substantial in advanced manufacturing and developed economies, which is smaller in manufacturing sectors with higher global value chain positions and lower export penetration levels. These findings suggest that improving the level of manufacturing servitization helps alleviate the consumption-based carbon rebound effect and is conducive to achieving the target of global carbon emission reduction.