Unravelling the Greenhouse Gas Emissions of Household Consumption: A Decomposition Analysis of the Netherlands Between 2000-2019

Abstract

This study examined the relationship between climate change and household consumption in the Netherlands. During the period 2000-2019, the direct and indirect greenhouse gas emissions attributable to Dutch household expenditures were reduced from 151.7 to 127.1 MtCO2e. The study aimed at understanding to what extent socioeconomic factors contributed to this reduction of emissions. Five driving factors were selected to be evaluated: population, household size, household demand, demand structure, and emission intensity. A combination of environmentally-extended input-output analysis and decomposition analysis was utilised to quantify each driver’s impact on household GHG emissions. The results indicate that the estimated -24.6 Mt reduction of emissions was facilitated by three drivers and counterbalanced by two of them. Decreasing the emission intensity of consumption contributed -30.9 Mt, and lower household demand (after inflation) and a slight shift of consumption towards less emissive sectors added another -5.0 and -1.6 Mt each. In contrast, population growth and a decrease in household size were found to have raised household GHG emissions by 12.5 and 9.7 Mt, respectively. An amount of -9.3 Mt remained unexplained due to data inconsistencies. The findings underline the importance of decreasing emission intensities as mitigations realised this way have outpaced economic growth in the past two decades. At the same time, the results also highlight the powerful role of demographic trends prevailing in the Netherlands, which prospective climate policies are recommended to address to optimise GHG emission reductions.