Household expenditure on consumption categories with differing environmental pressure intensities

Assessment versions

Published (reviewed and quality assured)

• No published assessments

Rationale

Justification for indicator selection

This indicator is part of a Sustainable Consumption and Production (SCP) indicator set which was developed on the basis of a framework for indicator based reporting on SCP. The policy question the indicator seeks to answer is one of 35 policy questions forming the core of the SCP Indicator Reporting Framework.

The indicator considers trends in expenditure across 12 broad household consumption expenditure categories and presents these along with environmental pressure intensities for each category to enable interpretation of the impact of changing consumption patterns. Different categories of consumption show different environmental pressure intensities measured in environmental impact/Euro. A shift in share of consumption expenditure from a high intensity category to one with a lower intensity will have a role in decoupling environmental impact from growth in consumption.

Scientific references

• Newly created RationaleReference ETC/SCP (2010) Towards a Set of Indicators on Sustainable Consumption and Production (SCP) for EEA reporting. European Topic Centre on Sustainable Consumption and Production

Indicator definition

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

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). The indicator also illustrates trends in absolute spending on each of the 12 categories between 1995 and 2010 (Figure 2). Expenditure trends are given in fixed prices.

Figures 3-6 show environmental pressures per Euro of spending for each of the 12 household consumption categories for 4 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.

(http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Glossary:Classification_of_individual_consumption_by_purpose_(COICOP))

Units

This indicator is expressed as: (1) the share (%) of total expenditure on each COICOP category, indexed to 1995 (Figure 1); (2) developments in absolute expenditure in household consumption (COICOP) categories per capita (Figure 2); and (3) the unit pressure (kg CO2-equiv., g SO2-equiv., g NMVOC-equiv. and kg material use) per Euro of spending of household consumption categories (Figures 3-6).

Policy context and targets

Context description

The international policy framework for SCP was recently agreed at Rio+20 with the adoption of the ten year framework for action 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’. However, the potential to reduce environmental impacts caused by consumption through shifting expenditure from consumption categories with high environmental pressure intensities (pressures per Euro of spending) to less pressure intensive consumption categories has been much less recognised until very recently.

The Roadmap to a Resource Efficient Europe in its theme area on Sustainable Consumption and Production recognises that ‘changing consumption patterns of private and public purchasers will help 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.’

Targets

No quantitative targets have been identified.

Related policy documents

• COM(2011) 531 final - 6EAP FINAL ASSESSMENT
  The Sixth Community Environment Action Programme FINAL ASSESSMENT
• Roadmap to a Resource Efficient Europe COM(2011) 571
  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: The final volumes of expenditures in 1990 and 2010 were calculated by adding the total expenditure on each COICOP category in the EU-27 to the equivalent total expenditures in Iceland, Norway and Switzerland. These were then converted into percentages.

Figure 2: The total expenditures in each COICOP category were obtained as described above. The index was calculated by dividing the value of the expenditure volumes for each year (1995-2010) by the expenditure value for year 1995 and multiplying by 100.   

Figures 3-6: The data were 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

• Newly created MethodologyReference EEA (forthcoming) Environmental Pressures from European Consumption and Production: A study in integrated environmental and economic analysis. EEA Technical Report.

Data specifications

EEA data references

• No datasets have been specified here.

External data references

• Annual national accounts (nama)

Data sources in latest figures

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://epp.eurostat.ec.europa.eu/cache/ITY_SDDS/EN/nama_esms.htm

However, the uncertainty elements of the meta-data file had not been completed at the time of last update of this EEA indicator.

The methodology and key assumptions used in the Environmental Extended Input Output calculations are described in detail in a forthcoming EEA Technical Report. 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.