@@ -86,9 +86,9 @@ The first step was stratifying an Environmentally-Extended Multi-Regional Input-
An EE-MRIO can calculate national environmental footprints from final demand expenditure. Final demand expenditure on different production sectors, in monetary units, is multiplied by 'direct and indirect supply chain' environmental intensities per production sector to calculate the environmental footprint (for one year). The 'direct and indirect supply chain' intensities per production sector estimate the total physical amount of environmental extension, whether emissions, energy use, etc., anywhere along the supply chain per monetary unit of final demand expenditure.
In this way, the global amount of environmental pressure in that year is allocated to each country based on their final demand expenditure (this 'footprint' approach is also called consumption-based accounting as opposed to territorial-based accounting). The 'direct and indirect supply chain' intensities per production sector are calculated using standard EE-MRIO calculations.
In this way, the global amount of environmental pressure in that year is allocated to each country based on their final demand expenditure (this 'footprint' approach is also called consumption-based accounting as opposed to territorial-based accounting). The 'direct and indirect supply chain' intensities per production sector are calculated using standard EE-MRIO calculations [@miller_input-output_1985].
The final demand expenditure, and thus the national footprint, is typically disaggregated into several final demand categories, including households, non-profits serving households, government, gross-fixed capital formation, change in inventories and valuables. To the authors' knowledge, current publicly available EE-MRIOs do not stratify their final demand expenditure by income quantile. The underlying distribution of final demand expenditure and footprint across income groups is therefore hidden.
The final demand expenditure, and thus the national footprint, is typically disaggregated into several final demand categories, including households, non-profits serving households, government, gross-fixed capital formation, change in inventories and valuables. Current publicly available EE-MRIOs do not have final demand expenditure stratified by income quantile. The underlying distribution of final demand expenditure and footprint across income groups is therefore hidden.
In order to stratify the EE-MRIO final demand expenditure and footprint by income quantile, a second data input is needed with information on the income/expenditure distribution. This could be a household budget survey (HBS) stratified by income quantile or, at a more aggregate level, the national income distribution. In this paper we use:
...
...
@@ -160,7 +160,7 @@ The EUROSTAT HBS compiles national household budget surveys from European countr
'Mean consumption expenditure by income quintile' is expressed in purchasing power standards (PPS) per year, country and income quintile, in two possible units; per household and per adult equivalent. Purchasing power standard (PPS) is a common currency measure that eliminates differences in national price-levels. The income quintiles are determined by household, ie. all households in the sample are ranked by income and evenly distributed into five quintiles, thus there are the same number of households in each income quintile. For per adult equivalent, the mean consumption expenditure by income quintile is adjusted for household size between countries, years, and income quintiles, using the modified OECD scale: the first adult in the household is given a weight of 1.0, each adult thereafter 0.5, and each child 0.3 [@eurostat_description_2016].
The 'Structure of consumption expenditure by income quintile and COICOP consumption purpose' table gives the distribution of consumption expenditure across COICOP consumption categories in each income quintile, expressed in 'parts per mille (pm)'. There are three 'levels' of COICOP breakdown. All countries have level 1 (12 consumption categories) and 2, but there are only a few with level 3. For the current analysis, we select our own mix of COICOP level 1 and 2. We use COICOP level 1, except for the categories of food (CP01), housing (CP04) and mobility (CP07), where we use level 2.
The 'Structure of consumption expenditure by income quintile and COICOP consumption purpose' table gives the distribution of consumption expenditure across COICOP consumption categories in each income quintile, expressed in 'parts per mille (pm)'. There are three 'levels' of COICOP breakdown. All countries have level 1 (12 consumption categories) and 2, but there are only a few with level 3. For the current analysis, we select our own mix of COICOP level 1 and 2. We use COICOP level 1, except for the categories of food (CP01), housing (CP04) and mobility (CP07), where we use level 2, due to their importance for energy use and emissions.
This is primarily because of the diversity of level 2 categories, especially within those three aggregate level 1 categories. This is most clearly seen in the housing category, where, at level 2, housing is broken down into: 'Actual rentals for housing' (CP041), 'Imputed rentals for housing' (CP042), 'Maintenance and repair of the dwelling' (CP043), 'Water supply and miscellaneous services relating to the dwelling' (CP044), and 'Electricity, gas and other fuels' (CP045). Corresponding all housing-related EXIOBASE production sectors only to the HBS level 1 'housing' consumption category (CP04) would obscure the difference between level 2 categories with extremely different effects on the footprint (electricity production vs. rental payments). The COICOP consumption categories we thus use are: CP011 ('Food'), CP012 ('Non-alcoholic beverages'), CP02 ('Alcoholic beverages, tobacco and narcotics'), CP03 ('Clothing and footwear'), 'rent' (we collapse CP041 with CP042), CP043, CP044, CP045, CP05 ('Furnishings, household equipment and routine household maintenance'), CP06 ('Health'), CP071 ('Purchase of vehicles'), CP072 ('Operation of personal transport equipment'), CP073 ('Transport services'), CP08 ('Communications'), CP09 ('Recreation and culture'), CP10 ('Education'), CP11 ('Restaurants and hotels'), CP12 ('Miscellaneous goods and services').
...
...
@@ -609,9 +609,9 @@ flextable(eemrio_bp) %>%
## European household expenditure deciles
Each national income quintile has a household final demand expenditure, household energy footprint and household carbon footprint estimate allocated to it after these initial steps. Then, to calculate European household expenditure deciles, we first ranked all these national income quintiles (140 in total: 28 European countries x 5 national income quintiles each) according to their mean household expenditure in PPS and aggregated the result to 10 European expenditure groups. This distribution allowed us to analyze the total European household energy and carbon footprints per these European expenditure deciles. We included only those countries with EUROSTAT HBS and EXIOBASE data in 2015, 2010, and 2005, which excludes Italy (no 2010 or 2015 necessary EUROSTAT HBS data, i.e. no data per income quintile) and Luxembourg (no 2010 EUROSTAT HBS data), but includes the UK, Norway and Turkey.
Each national income quintile has a household final demand expenditure, household energy footprint and household carbon footprint estimate allocated to it, which represents the average in the quintile, after these initial steps. Then, to calculate European household expenditure deciles, we first ranked all these national income quintiles (140 in total: 28 European countries x 5 national income quintiles each) according to their mean household expenditure in PPS and aggregated the result to 10 European expenditure groups. This distribution allowed us to analyze the total European household energy and carbon footprints per these European expenditure deciles. We included only those countries with EUROSTAT HBS and EXIOBASE data in 2015, 2010, and 2005, which excludes Italy (no 2010 or 2015 necessary EUROSTAT HBS data, i.e. no data per income quintile) and Luxembourg (no 2010 EUROSTAT HBS data), but includes the UK, Norway and Turkey.
Each national income quintile is thus allocated to one of the 10 European expenditure deciles (some national income quintiles at the boundaries between deciles are split between two deciles). Figure S1 shows the population share of each country in our bottom 4 European expenditure deciles. A 100% share thus means that all 5 national income quintiles of that country fall within the bottom 4 European expenditure deciles. This does not imply that there are no high-income households in those countries, but because this method uses average expenditure data from the national income quintiles, the aggregation cuts off the lower and higher tails of the respective national expenditure distributions.
Each national income quintile is thus allocated to one of the 10 European expenditure deciles (some national income quintiles at the boundaries between deciles are split between two deciles). Figure S1 shows the population share of each country in our bottom 4 European expenditure deciles in 2015. A 100% share thus means that all 5 national income quintiles of that country fall within the bottom 4 European expenditure deciles. This does not imply that there are no high-income households in those countries, but because this method uses average expenditure data from the national income quintiles, the aggregation cuts off the lower and higher tails of the respective national expenditure distributions.
```{r load-data-0, include=FALSE}
# load data wrangling functions
...
...
@@ -691,7 +691,7 @@ map1 = ggplot() +
```
```{r , fig.cap="**Figure S1: Percentage of population in bottom 4 European expenditure deciles.**", out.width="99%", cache=F, fig.width=8, fig.height = 4}
```{r , fig.cap="**Figure S1: Percentage of population in bottom 4 European expenditure deciles in 2015.**", out.width="99%", cache=F, fig.width=8, fig.height = 4}
