Household consumption pattern and CO2 emissions: The age and generational effects

Abstract

Reducing household CO2 emissions is central to climate change mitigation. With the profound demographic transition worldwide, age changes and generational shifts of population are reshaping household consumption patterns and emissions. Understanding the age and generational effects in household emissions is fundamental to formulate effective green consumption measures. However, a key challenge is how to properly quantify the impacts of age and generation on household consumption behavior and emissions. This study resolves this issue by proposing an extended demand system model with age and generation factors using the age-period-cohort approach, which is further linked with the multi-region input-output model. The proposed approach presents a novel way to explicitly model the distinct impacts of age variation and generational difference on emissions through characterizing their role in consumption behavior within a unified framework. Applying the proposed approach to a Chinese household dataset reveals the salient yet varying impacts of age and generation on household emissions in China. It is shown that emissions decline progressively with household aging, while younger generations tend to emit less than older ones. A prospective analysis further suggests that these effects would persist and even intensify with China's demographic transition over the next decade. Policy implications regarding household emissions mitigation from age and generation perspectives are discussed.