Does sharing backfire? A decomposition of household and urban economies in CO2 emissions

Both multi-person households and dense urban areas reduce per capita carbon dioxide (CO2) emissions by enabling people to share carbon-intensive goods within and between households. In this paper we estimate these household and urban economies in CO2 emissions using detailed household expenditure data for the United States. We then decompose these economies into their primary sources and investigate any potential rebound effects, or diseconomies. The results show that the bulk of household and urban economies come from reductions in emissions from residential energy use and private vehicle transportation. We also find some evidence of rebound effects, with both residential density and multi-person households increasing expenditures on air travel and restaurant meals in particular. These effects are small in comparison to the size of total net economies, suggesting that fears of large rebound effects or backfire effects may be overstated. These results further suggest that policies targeted at the provision of social and technological infrastructure, such as public transportation, mixed-use zoning, and public internet may be most effective in reducing the rural-urban divide in private vehicle emissions.