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What drives the change in UK household energy expenditure and associated CO2 emissions? Implication and forecast to 2020

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  • Mona Chitnis

    () (Surrey Energy Economics Centre (SEEC) and Research Group on Lifestyles Values and Environment (RESOLVE), University of Surrey)

  • Lester C Hunt

    () (Surrey Energy Economics Centre (SEEC) and Research Group on Lifestyles Values and Environment (RESOLVE), University of Surrey)

Abstract

Given the amount of direct and indirect CO2 emissions attributable to UK households, policy makers need a good understanding of the structure of household energy expenditure and the impact of both economic and non-economic factors when considering policies to reduce future emissions. To help achieve this, the Structural Time Series Model is used here to estimate UK ‘transport’ and ‘housing’ energy expenditure equations for 1964-2009. This allows for the estimation of a stochastic trend to measure the underlying energy expenditure trend and hence capture the non-trivial impact of ‘non-economic factors’ on household ‘transport’ and ‘housing’ energy expenditure; as well as the impact of the traditional ‘economic factors’ of income and price. The estimated equations are used to show that given current expectations, CO2 attributable to ‘transport’ and ‘housing’ expenditures will not fall by 29% (or 40%) in 2020 compared to 1990, and is therefore not consistent with the latest UK total CO2 reduction target. Hence, the message for policy makers is that in addition to economic incentives such as taxes, which might be needed to help restrain future energy expenditure, other policies that attempt to influence lifestyles and behaviours also need to be considered.

Suggested Citation

  • Mona Chitnis & Lester C Hunt, 2011. "What drives the change in UK household energy expenditure and associated CO2 emissions? Implication and forecast to 2020," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 134, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.
  • Handle: RePEc:sur:seedps:134
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    References listed on IDEAS

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    1. Druckman, Angela & Jackson, Tim, 2009. "The carbon footprint of UK households 1990-2004: A socio-economically disaggregated, quasi-multi-regional input-output model," Ecological Economics, Elsevier, vol. 68(7), pages 2066-2077, May.
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    Cited by:

    1. Qian Wang & Qiao-Mei Liang & Bing Wang & Fang-Xun Zhong, 2016. "Impact of household expenditures on CO2 emissions in China: Income-determined or lifestyle-driven?," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 84(1), pages 353-379, November.
    2. Broadstock, David C. & Hunt, Lester C., 2010. "Quantifying the impact of exogenous non-economic factors on UK transport oil demand," Energy Policy, Elsevier, vol. 38(3), pages 1559-1565, March.
    3. repec:eee:enepol:v:107:y:2017:i:c:p:698-710 is not listed on IDEAS
    4. Liu, Lan-Cui & Wu, Gang, 2013. "Relating five bounded environmental problems to China's household consumption in 2011–2015," Energy, Elsevier, vol. 57(C), pages 427-433.
    5. Tajudeen, Ibrahim A., 2015. "Examining the role of energy efficiency and non-economic factors in energy demand and CO2 emissions in Nigeria: Policy implications," Energy Policy, Elsevier, vol. 86(C), pages 338-350.
    6. Rui Xing & Tatsuya Hanaoka & Yuko Kanamori & Hancheng Dai & Toshihiko Masui, 2015. "Energy Service Demand Projections and CO 2 Reduction Potentials in Rural Households in 31 Chinese Provinces," Sustainability, MDPI, Open Access Journal, vol. 7(12), pages 1-14, November.
    7. Chitnis, Mona & Druckman, Angela & Hunt, Lester C. & Jackson, Tim & Milne, Scott, 2012. "Forecasting scenarios for UK household expenditure and associated GHG emissions: Outlook to 2030," Ecological Economics, Elsevier, vol. 84(C), pages 129-141.
    8. Allinson, David & Irvine, Katherine N. & Edmondson, Jill L. & Tiwary, Abhishek & Hill, Graeme & Morris, Jonathan & Bell, Margaret & Davies, Zoe G. & Firth, Steven K. & Fisher, Jill & Gaston, Kevin J. , 2016. "Measurement and analysis of household carbon: The case of a UK city," Applied Energy, Elsevier, vol. 164(C), pages 871-881.
    9. Xie, Xuan & Shao, Shuai & Lin, Boqiang, 2016. "Exploring the driving forces and mitigation pathways of CO2 emissions in China’s petroleum refining and coking industry: 1995–2031," Applied Energy, Elsevier, vol. 184(C), pages 1004-1015.
    10. Barros, Carlos P. & Gil-Alana, Luis A. & Wanke, Peter, 2016. "Energy production in Brazil: Empirical facts based on persistence, seasonality and breaks," Energy Economics, Elsevier, vol. 54(C), pages 88-95.
    11. Brand, Christian & Goodman, Anna & Rutter, Harry & Song, Yena & Ogilvie, David, 2013. "Associations of individual, household and environmental characteristics with carbon dioxide emissions from motorised passenger travel," Applied Energy, Elsevier, vol. 104(C), pages 158-169.
    12. David C Broadstock & Eleni Papathanasopoulou, 2013. "Gasoline demand in Greece: the importance of shifts in the underlying energy demand trend," Surrey Energy Economics Centre (SEEC), School of Economics Discussion Papers (SEEDS) 141, Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey.

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    Keywords

    Household energy expenditure; CO2 emissions; Structural Time Series Model;

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