Household expenditure on consumption categories with differing environmental pressure intensities

Indicator Assessment
Prod-ID: IND-343-en
Also known as: CSI 043 , SCP 013
Created 01 Oct 2014 Published 02 Mar 2015 Last modified 08 Oct 2015, 01:25 PM
Between 1996 and 2012, trends in household spending patterns were mixed. The trend, however, is towards an increasing share of consumption categories with reduced environmental pressures per Euro spent. In addition, almost all consumption categories have also seen reductions in environmental pressure intensities.   Together, these two developments are likely to have caused a relative decoupling of environmental pressures from growth in household consumption expenditure.

Key messages

Between 1996 and 2012, trends in household spending patterns were mixed. The trend, however, is towards an increasing share of consumption categories with reduced environmental pressures per Euro spent. In addition, almost all consumption categories have also seen reductions in environmental pressure intensities. Together, these two developments are likely to have caused a relative decoupling of environmental pressures from growth in household consumption expenditure.

Are Europeans switching consumption patterns to goods and services with less environmental pressures per Euro?

Greenhouse gas emissions induced by household consumption, per Euro spent of expenditure in 12 household consumption categories, 2000-2007

Note: Trends in greenhouse gas emissions induced by household consumption, per Euro of expenditure in 12 household consumption (COICOP) categories, shown for 3 years 2000, 2004 and 2007. Emissions are based on the footprint perspective and include both emissions directly emitted by households (for example by burning fuels for heating) and emissions associated with the production of goods and services purchased by households.

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Acidifying emissions induced by household consumption, per Euro spent of expenditure in 12 household consumption categories, 2000-2007

Note: Trends in acidifying emissions induced by household consumption, per Euro of expenditure in 12 household consumption (COICOP) categories, shown for 3 years 2000, 2004 and 2007. Emissions are based on the footprint perspective and include both emissions directly emitted by households (for example by burning fuels for heating) and emissions associated with the production of goods and services purchased by households.

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Tropospheric ozone precursor emissions induced by household consumption, per Euro spent of expenditure in 12 household consumption categories, 2000-2007

Note: Trends in emissions of tropospheric ozone precursors induced by household consumption, per Euro of expenditure in 12 household consumption (COICOP) categories, shown for 3 years 2000, 2004 and 2007. Emissions are based on the footprint perspective and include both emissions directly emitted by households (for example by burning fuels for heating) and emissions associated with the production of goods and services purchased by households.

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Direct material input induced by household consumption, per Euro spent of expenditure in 12 household consumption categories, 2000-2007

Note: Trends in Direct material input (DMI) induced by household consumption, per Euro of expenditure in 12 household consumption (COICOP) categories, shown for 3 years 2000, 2004 and 2007. Emissions are based on the footprint perspective and include both emissions directly emitted by households (for example by burning fuels for heating) and emissions associated with the production of goods and services purchased by households.

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Over the period assessed, two main relative decoupling effects can be identified from changes in household consumption expenditure categories. First, there has been a shift in consumption expenditure from categories with high environmental pressure intensities (pressures per Euro spent) to ones with lower intensities due to changes in consumption patterns. Second, a reduction has been seen in the environmental pressure intensities of individual consumption categories. While the policy question addressed here is mainly concerned with changes in consumption patterns, this indicator can also be used to illustrate the second decoupling effect.

Trends in consumption expenditure reveal a moderate shift in consumption expenditure patterns to less environmentally intensive types of goods and services.

Interpretation of such shifts between consumption categories is not straightforward, however. For example, if a household saved money by buying cheaper food produced in a less environmentally friendly manner (and instead spent it on recreation, for example), this would not necessarily lead to less environmental pressures overall. Changes in spending patternswithina consumption category can, in turn, change the pressure intensity of that category.

The distribution of expenditure (in current prices) between the 12 COICOP categories changed only slightly between 1996 and 2012 (Figure 1). This is unsurprising as a large majority of household expenditure is, in practice, fixed. However, there have been modest changes, with growth in the share of low impact expenditure categories such as on education, communication and health. However, there has also been a three percentage point growth in the share of household expenditure on housing and utilities – a high impact expenditure category. The economic downturn that started in 2008, as well as the fact that prices for this category increased more than average inflation, might have influenced this development. Meanwhile, the share of household expenditure used for transport, food, furnishings and equipment – also high impact consumption categories – has fallen.

Per capita expenditure measured in chain linked volumes (Figure 2) has grown in all consumption categories except alcoholic beverages, tobacco and narcotics, which actually fell 17 %. The two most rapidly growing consumption categories, ‘communications’ (which grew a staggering 208 %) and ‘recreation and culture’ (which grew 76 %), are two of the categories with the lowest environmental pressure intensities (Figures 3-6). ‘Health’ expenditure also grew by 47 %, another low-intensity expenditure category.

As expenditure on all categories (except alcohol, tobacco and narcotics) has either remained stable or increased between 1996 and 2012, the overall changes in spending patterns are likely to have had a relative, as opposed to an absolute, decoupling effect on environmental impacts caused by consumption. This is because pressures caused by consumption will have grown, but less rapidly than overall consumption expenditure.

Figures 3-6 demonstrate that, almost without exception, all 12 consumption categories have seen reductions in environmental pressure intensities between 2000 and 2007. However, it should be noted that this could have been caused by improvements in the production processes of individual goods and services within each consumption category, but also by shifts in the products being purchased within each consumption category. For example, a shift from the use of private cars to trains will show up as a reduction in pressure intensity in the Transport COICOP category in Figures 3-6.

It should be noted that other environmental pressures and impacts, such as biodiversity loss, emissions to water and soil and land use impacts due to European consumption, are at least as important in a consumption perspective, but such data is currently not available in a comparable format.

Indicator specification and metadata

Indicator definition

This indicator shows trends in total household consumption expenditure of Europeans as characterised by the Classification of Individual Consumption by Purpose (CIOCOP).

COICOP is a nomenclature developed by the United Nations Statistics Division and subsequently adopted by Eurostat to classify and analyse individual consumption expenditures incurred by households, non-profit institutions serving households and general government according to their purpose. Trends at the single digit disaggregation level demonstrate how patterns of consumption across 12 expenditure categories in Europe are changing. Figure 1, which compares the share of expenditure across the COICOP categories in two years, uses current prices, while figure 2, which shows the trends in expenditure in the 12 expenditure categories, is presented in chain linked volumes.

Figures 3-6 show environmental pressures per Euro of spending for each of the 12 household consumption categories for four environmental pressure categories. This enables expenditure trends in the first two figures to be interpreted with respect to potential changes in environmental pressures caused by household consumption.


Units

Figure 1:        % (the share of total expenditure on each COICOP category)

Figure 2:        index, 1996 = 100 (developments in absolute expenditure in household consumption (COICOP) categories per capita)

Figure 3-6      kg/Euro (the unit pressure (kg CO2-equiv., g SO2-equiv., g NMVOC-equiv. and kg material use) per Euro of spending of household consumption categories)


Policy context and targets

Context description

The international policy framework for SCP was agreed at the UN Conference on Sustainable Development (Rio+20) with the adoption of a global framework of programmes on sustainable consumption and production. The declaration ‘The future we want’ recognised the need to change unsustainable, and promote sustainable patterns of consumption and production.

The potential for reducing impacts from consumption through the development of alternative lower impact products is widely recognised. For example the Final Report for the Assessment of the 6EAP calls for ‘better resource efficiency per unit of products produced’. In addition, environmental impacts caused by consumption could be reduced through shifting expenditure from consumption categories with high environmental pressure intensities (pressures per Euro of spending) to less pressure intensive consumption categories.

The Roadmap to a Resource Efficient Europe, in its thematic area on Sustainable Consumption and Production, recognises that ‘changing consumption patterns of private and public purchasers will help to drive resource efficiency’. The Roadmap also includes the milestone that 'By 2020, citizens and public authorities have the right incentives to choose the most resource efficient products and services, through appropriate price signals and clear environmental information… Consumer demand is high for more sustainable products and services.’

The EU’s 7th Environment Action Programme reinforces the objectives of the Roadmap to a resource efficient Europe, stating that ‘measures will be taken to further improve the environmental performance of goods and services on the Union market over their whole life cycle including measures to increase the supply of environmentally sustainable products and stimulate a significant shift in consumer demand for such products’, and that ‘targets for reducing the overall lifecycle environmental impact of consumption will be set, in particular in the food, housing and mobility sectors’.

Targets

No quantitative targets have been identified.

Related policy documents

  • 7th Environment Action Programme
    DECISION No 1386/2013/EU OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 November 2013 on a General Union Environment Action Programme to 2020 ‘Living well, within the limits of our planet’. In November 2013, the European Parliament and the European Council adopted the 7 th EU Environment Action Programme to 2020 ‘Living well, within the limits of our planet’. This programme is intended to help guide EU action on the environment and climate change up to and beyond 2020 based on the following vision: ‘In 2050, we live well, within the planet’s ecological limits. Our prosperity and healthy environment stem from an innovative, circular economy where nothing is wasted and where natural resources are managed sustainably, and biodiversity is protected, valued and restored in ways that enhance our society’s resilience. Our low-carbon growth has long been decoupled from resource use, setting the pace for a safe and sustainable global society.’
  • COM(2011) 531 final - 6EAP FINAL ASSESSMENT
    The Sixth Community Environment Action Programme FINAL ASSESSMENT
  • Roadmap to a Resource Efficient Europe
    Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Roadmap to a Resource Efficient Europe.  COM(2011) 571  
  • The Future We Want –Declaration of the UN Conference on Sustainable Development, Rio (2012)
    The Future We Want is the declaration on sustainable development and a green economy adopted at the UN Conference on Sustainable Development in Rio on June 19, 2012. The Declaration includes broad sustainability objectives within themes of Poverty Eradication, Food Security and Sustainable Agriculture, Energy, Sustainable Transport, Sustainable Cities, Health and Population and Promoting Full and Productive Employment. It calls for the negotiation and adoption of internationally agreed Sustainable Development Goals by end 2014. It also calls for a UN resolution strengthening and consolidating UNEP both financially and institutionally so that it can better disseminate environmental information and provide capacity building for countries.

Methodology

Methodology for indicator calculation

Figure 1: Expenditures (in aggregates at current prices) for each COICOP category within the EEA countries for two different years are calculated by adding the expenditure in the EU-28 to the equivalent expenditures in Iceland and Norway. Turkey, Switzerland and Lichtenstein have been omitted due to insufficient data.

Figure 2: Expenditures (in chain-linked volumes) for each COICOP category within the EEA countries since 1996 are calculated by adding the expenditure in the EU-28 to the equivalent expenditures in Iceland and Norway. Turkey, Switzerland and Lichtenstein have been omitted due to insufficient data. The index is calculated by dividing the value of the expenditure volumes for each year  by the expenditure value for 1996 and multiplying by 100.   

Figures 3-6: The data are obtained from the EEA and ETC/SCP's NAMEA project.  Environmentally Extended Input-Output Analysis (EE-IOA) was carried out using Eurostat Input-Output tables and air emissions accounts for the EU-27. Pressures associated with 60 NACE product categories were allocated to COICOP categories using a transformation matrix. Direct emissions from households were also allocated using a simple transformation of emissions from mobile sources to ‘07 Transport and emissions from stationary sources’ to ‘04 Housing’.

Methodology for gap filling

No gap filling was necessary for producing this indicator.

Methodology references

  • EEA, 2013 EEA, 2013, Environmental Pressures from European Consumption and Production: A study in integrated environmental and economic analysis. EEA Technical Report, No 2/2013 .

Uncertainties

Methodology uncertainty

No uncertainty has been specified.

Data sets uncertainty

For information on data source uncertainty for the Eurostat consumption expenditure data the metadata file can be found here:

http://ec.europa.eu/eurostat/cache/metadata/en/nama_esms.htm

The methodology and key assumptions used in the Environmental Extended Input Output calculations are described in detail in the EEA Technical Report No. 2/2013 ‘Environmental pressures from European consumption and production’. Uncertainties result from a number of assumptions/characteristics of the methodology and underlying data including; coarse aggregation of all industries and products into 59 industry/product groups; allocation of environmental pressures to a product group according to monetary rather than physical flows; and basic one-to-one mapping of 59 (2-digit) product groups to 12 COICOP (2-digit) COICOP categories when allocating environmental pressures to COICOP groups.

Rationale uncertainty

Pressure intensities of household consumption categories have only been calculated for four types of environmental pressure. Including other environmental pressures and resources might identify different household consumption categories as having relatively high pressure intensities, and therefore lead to different conclusions on whether trends in consumption expenditure are moving in a favourable or unfavourable direction. Other environmental pressures and impacts, such as biodiversity loss, emissions to water and soil, or land use, are relevant as well but could not be included due to a lack of data for other pressures and impacts in the data set.

Data sources

Generic metadata

Topics:

Tags:
household consumption | soer2015 european | coicop | household expenditure | soer2015
DPSIR: Driving force
Typology: Descriptive indicator (Type A - What is happening to the environment and to humans?)
Indicator codes
  • CSI 043
  • SCP 013
Dynamic
Temporal coverage:
1996-2012
Geographic coverage:
Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom

Contacts and ownership

EEA Contact Info

Almut Reichel

EEA Management Plan

2014 2.1.5 (note: EEA internal system)

Dates

Frequency of updates

Updates are scheduled every 2 years
European Environment Agency (EEA)
Kongens Nytorv 6
1050 Copenhagen K
Denmark
Phone: +45 3336 7100