The income threshold of household carbon emissions: Nonlinear growth and decoupling challenges

Decoupling carbon emissions from economic growth is a key pathway to address climate change. However, most studies overlook the behavioral mechanisms behind the non-linear growth of household emissions and the challenges this non-linearity implies for decoupling. This study advances a consumption-transition model related to carbon emissions. The theoretical model suggests that once income exceeds a critical threshold, households shift from basic-needs spending to symbolic consumption and may imitate consumption patterns of higher-income households. This change can sharply increase demand for carbon-intensive goods and alter the decoupling status. Using China Family Panel Studies data for 2014–2022, we empirically identify an income threshold in household emissions, namely a carbon emission growth turning point (CEGTP), after which emissions rise more rapidly with income. Sensitivity analysis indicates that emission patterns remain stable within ±15% of the CEGTP, enabling robust comparison between high- and low-income households. We find that more than half of urban households have disposable income below the CEGTP, which may imply a significant risk of future emission increases. Consistent with the theoretical model, labor-dominated households exhibit a higher income elasticity of emissions than households dominated by older individuals or children, because working-age adults may be more prone and able to engage in symbolic consumption. The higher elasticity is primarily driven by discretionary spending, such as travel, rather than necessities like food, residential energy, or clothing. Thus, the key to achieving decoupling is to apply targeted policies to steer incremental consumption onto a low-carbon path.