Does a household’s income affect its carbon emissions? Results for single-family homes in Poland

Abstract

A key challenge of Fit for 55 will be reducing household emissions. For this, it is necessary to understand the factors that influence emissions and the specific role of household income. This study tests the validity of the environmental Kuznets curve (EKC) for households and links carbon emissions with income, housing, energy sources, and hidden energy poverty. We use individual household data from the Polish energy consumption survey complemented with data from a budget survey both compiled by Statistics Poland. The EKC is estimated in two scenarios, i.e. current energy mix, and zero-carbon electricity. Our model is based on the least trimmed squares technique. The study confirms the existence of the inverted U-shaped EKC in households, which is especially relevant for owners of small houses. This finding might be explained by the energy under-consumption often experienced by the poorest households, whereas wealthier households usually live in energy-efficient buildings and use less carbon-intensive fuels. The turning point is reached at 373 euros of income and 3425 kg of carbon emissions in a usual energy mix scenario compared to 560 euros and 5104 kg in a clean electricity scenario. Apart from income, household carbon emissions are interrelated with house size and hidden energy poverty, which should be in policymakers focus.