Is Decoupling Possible? Association between Affluence and Household Carbon Emissions in the Philippines

• Published date: 01 June 2017
• DOI: http://doi.org/10.1111/asej.12119
• Author: Moises Neil V. Seriño
• Date: 01 June 2017

Is Decoupling Possible? Association between

Affluence and Household Carbon Emissions in

the Philippines

*

Moises Neil V. Seriño

Received 20 October 2014; Accepted 16 March 2017

This paper investigates whether or not affluence is associated with carbon emissions

at the household level in the Philippines. While there is abundant literature on this

issue, limited studies are available for developing countries. Weestimate household

carbon emissions by combining input–output analysis with household expenditure.

The results suggest that household carbon emissions are increasing non-

monotonically with a non-existent turning point as households accumulate more

assets. This is further supported by quintile estimates showing huge disparity in

emissions between poor and rich households. Although household carbon

emissions in the Philippines are not alarming, evidence suggests that it is likely

households will lead a carbon-intensive lifestyle as they become more affluent.

Keywords: asset index, carbon emissions, environmentalKuznets curve, household

consumption.

JEL classification codes: D10, Q50, Q56, R20.

doi: 10.1111/asej.12119

I. Introduction

In its latest assessment report, the Intergovernmental Panel for Climate Change

(IPCC) said that it is extremely likely that human influence has been the dominant

cause of the observed global warming since the mid-20th century (IPCC, 2013a).

This global warming phenomenon is largely attributed to the rising level of

anthropogenic greenhouse gases (GHG) particularly carbon dioxide (CO

2

)

emissions from economic activities such as burning of fossil fuels and other

industrial processes. Thomas Stocker, Co-Chair of Working Group 1 of the IPCC

said that, ‘continued emissions of greenhouse gases will cause further warming

and changes in all components of the climate system. Limiting climate change

*Seriño (corresponding author): Visayas State University,Department of Economics, Visca, Baybay

City, Leyte 6521, Philippines. E-mail: moisesneil@gmail.com.The author acknowledges the financial

support from EXPERTS I –Erasmus Mundus Partnership in South and South-East Asia, EntdeKen

Project and the supervision of Professor Stephan Klasen. The author is very thankful to the anonymous

referees and to the editors for their helpful comments and suggestions.

© 2017 East Asian Economic Association and John Wiley & Sons Australia, Ltd

Asian Economic Journal 2017, Vol.31 No. 2, 165–185 165

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will require substantial and sustained reductions of g reenhouse gas emissions’

(IPCC, 2013a). Historically, developed countries have been responsible for the

majority of the accumulated greenhouse gas emissions in the atmosphere.

However, over the past decade, the greater share of the increase in global CO

2

emissions has come from developing countries, notably from China and other

large developing countries. From 2005 onwards and for the first time in history,

the aggregate CO

2

emissions coming from developing countries surpassed that

of the developed countries (IEA (International Energy Agency) 2013a). If other

developing countries follow this carbon-intensive development pathway, as

China has done, it will further aggravate the alarming level of CO

2

emissions in

the atmosphere and jeopardize efforts to stabilize the climate system.

One of the biggest challenges policy-makers face today is stabilizing the

climate system without limiting the growth potential of developing countries.

Economic growth has been the main driver of poverty reduction but it has relied

heavily on fossil fuels emitting enormous volumes of CO

2

(Murthy et al.,

1997). Delinking economic growth and carbon emissions in developing countries

is vital to achieving climate stabilization targets. Can developing countries pursue

a low carbon development path without compromising efforts in poverty

reduction? In this regard, we offer a step in this direction by investigating whether

there is a delinking between carbon emissions and affluence in the Philippines. We

look into how consumption patterns change as households become richer. The

Philippines is of particular interest because its emissions have been rapidly

increasing over the past three decades (IEA, 2014). Although the aggregate

emissions in the Philippines are relatively low compared to those in China,

India and Russia, this situation may worsen in the near future because strong

economic growth in the Philippines is largely driven by private consumption

(Asian Development Bank (ADB), 2014). In fact, private consumption grew by

5.6 percent in 2013 and contributed to more than half of the increase in GDP

(ADB, 2014).

Households’consumption has both direct and indirect implications for carbon

emissions (Seriño and Klasen, 2015). Direct emissions come from consumption

of household energy, such as gas, electricity, petroleum products, coal and

biomass, while indirect emissions come from energy inputs used in the production

of other household goods and services (Druckman and Jackson, 2009). If a

household decides to buy a refrigerator, direct emission comes from the energy

associated with using the refrigerator and indirect emission comes from all inputs

used in the production of the refrigerator. We use the framework of an input–

output analysis and trace the carbon emissions associated with household

consumption down to intermediate inputs. The method of input–output analysis

has been used quite often in accounting for the emissions embodied in household

consumption (see e.g. Parikh et al. 1997; Lenzen, 1998; Bin and Dowlatabadi,

2005; Kok et al. 2006). However, this approach is not immune to criticism.

Baiocchi et al. (2010) outline some grounds where the estimation of carbon

emissions using input-output analysis can be challenged. Due to lack of

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© 2017 East Asian Economic Association and John Wiley & Sons Australia, Ltd