Our results show that both of these factors play a role \@ref(fig:figure2). Lower-income households, on average, spend larger shares of their expenditure in the shelter sector. The bottom and top deciles spend an average of `r exp_share_shelter_bottom_decile`% and `r exp_share_shelter_top_decile`% of their household expenditure on shelter, respectively (our aggregated 'shelter' sector does not include rental payments. We have included the EXIOBASE production sector 'real estate services', which includes rental payments, in our aggregated 'services' sector, not the aggregated 'shelter' sector - see SI Table 4). Overall, with increasing expenditure decile, the shares of transport and services expenditures increase and the shares of shelter, food and manufactured goods decrease. At the same time, shelter is by far the most carbon intensive sector with the highest variance between expenditure deciles. In our sample, the intensity of all sectors decreases with expenditure level but the shelter sector stands out with a carbon intensity of consumption more than 3 times higher in the bottom decile (`r int_co2eq_shelter_bottom_decile` kgCO2eq/€) than in the top decile (`r int_co2eq_shelter_top_decile` kgCO2eq/€). Households in the top decile spend about `r exp_share_services_top_decile`% in the service sector, which has the lowest carbon intensity, compared to `r exp_share_services_bottom_decile`% in the bottom decile. Single country studies using EE-MRIO models with national resolution can pick up on differences in consumption baskets, but due to the homogeneous technology assumption in EE-MRIOs, cannot represent differences in technology between expenditure deciles.
The tendency for energy and carbon intensity to decrease with increasing affluence can be observed at the global level (XXX) between countries and also applies within Europe [@sommer_carbon_2017]. In some of the Eastern European countries, between 80% and 100% of the population belong to the four lowest European expenditure deciles. This compares to less than 20% of the population in the higher-income European countries (Scandinavia, Germany, France, Austria, the Netherlands, Belgium, the UK, and Ireland). Note here that our analysis is based on average expenditure data from five income groups at the national level. This aggregation cuts off the lower and higher ends of the respective national expenditure distributions (see SI - Supplementary Note and Map).
The tendency for energy and carbon intensity to decrease with increasing affluence can be observed at the global level (ref) between countries and also applies within Europe [@sommer_carbon_2017]. In some of the Eastern European countries, between 80% and 100% of the population belong to the four lowest European expenditure deciles. This compares to less than 20% of the population in the higher-income European countries (Scandinavia, Germany, France, Austria, the Netherlands, Belgium, the UK, and Ireland). Note here that our analysis is based on average expenditure data from five income groups at the national level. This aggregation cuts off the lower and higher ends of the respective national expenditure distributions (see SI - Supplementary Note and Map).
The high intensities in the bottom four European expenditure deciles can be attributed in large part to more inefficient and dirtier domestic energy supplies for heating and electricity generation in Poland, Bulgaria, the Czech Republic, and Romania. Poland alone was responsible for about 40% of total coal combustion for heat production in Europe in 2015 [@eurostat_eurostat_nodate-2], and had a higher average intensity of carbon per MJ of heat delivered than both Europe and the world [@werner_international_2017]. These differences in energy and carbon intensities in basic needs sectors (especially shelter) account for the smaller inequality between expenditure deciles, in terms of environmental footprints compared to raw expenditures.
Estimates of energy and carbon footprint inequality are increasingly being used to assign responsibility for climate change. At a global, regional, and within-country level, energy use and carbon emissions are often highly unequal [@piketty_carbon_2015 @kartha_carbon_2020 @gore_extreme_2015 @hubacek_global_2017-1 @ivanova_unequal_2020 @gore_t._confronting_2020 @wiedenhofer_unequal_2017 @golley_income_2012 @steenolsen_carbon_2016 @weber_quantifying_2008 @hardadi_implications_2020 @oswald_large_2020]. The proposed solution is often a call to reduce the carbon or energy inequality by reducing over-consumption, especially by the richest at the top of the economic distribution, which would then also reduce the energy and carbon footprints, everything else held equal. Complicating this picture, however, is the fact that energy and carbon intensities of consumption usually differ between economic groups. This is due to different consumption baskets and different access to technology. That lower-income groups tend to have higher energy and carbon intensities is an important finding from the environmental Kuznet's curve literature [@berthe_mechanisms_2015 @scruggs_political_1998]. This finding has not yet been well integrated with the current carbon and energy footprint inequality literature, that focuses more on assigning responsibility based on aggregate energy and carbon footprint inequality.
In this study, we have found that, for Europe as a whole, lower-economic groups have higher energy and carbon intensities of consumption (although this is not necessarily true within each European country) [@sommer_carbon_2017 @kerkhof_determinants_2009]. These higher intensities come almost entirely from domestic electricity production and heating/cooling for shelter, in a handful of Central and Eastern European countries. This is already an important focus of European climate policy, but reducing these intensities should be a major priority for investment fund allocation going forward, especially within a framework such as the EU's European Green Deal [@bianco_understanding_2019]. Efforts to break consumer lock-in to these high intensities must be occurring alongside policies that seek to reduce aggregate consumption and intensities higher up in the economic distribution. Bringing intensities of consumption for all economic groups in line with those of higher-economic groups in Europe with access to the cleanest and most efficient available technologies, would substantially reduce the European household energy and carbon footprints, everything else held equal. The unequal intensity structure hinders clear conclusions on footprint inequality. We have shown that in an important sector such as shelter, lower-economic groups have almost the same level of footprint as higher-economic groups despite a fraction of the expenditure, because of their higher intensities. This can then be misleading in terms of assigning responsibility for climate change. Bringing energy and carbon intensities of all economic groups in line with the top group, and thus removing the inequality in intensity structure, would reduce the footprint, all else held equal, but *increase* energy and carbon inequality. The reduction of energy and carbon inequality is not a meaningful goal by itself.
In this study, we have found that, for Europe as a whole, lower-economic groups have higher energy and carbon intensities of consumption (although this is not necessarily true within each European country) [@sommer_carbon_2017 @kerkhof_determinants_2009]. These higher intensities come almost entirely from domestic electricity production and heating/cooling for shelter, in a handful of Central and Eastern European countries. This is already an important focus of European climate policy, but reducing these intensities should be a major priority for investment fund allocation going forward, especially within a framework such as the EU's European Green Deal [@bianco_understanding_2019]. Efforts to break consumer lock-in to these high intensities must be occurring alongside policies that seek to reduce aggregate consumption and intensities higher up in the economic distribution [@royston_invisible_2018]. Bringing intensities of consumption for all economic groups in line with those of higher-economic groups in Europe with access to the cleanest and most efficient available technologies, would substantially reduce the European household energy and carbon footprints, everything else held equal. The unequal intensity structure hinders clear conclusions on footprint inequality. We have shown that in an important sector such as shelter, lower-economic groups have almost the same level of footprint as higher-economic groups despite a fraction of the expenditure, because of their higher intensities. This can then be misleading in terms of assigning responsibility for climate change. Bringing energy and carbon intensities of all economic groups in line with the top group, and thus removing the inequality in intensity structure, would reduce the footprint, all else held equal, but *increase* energy and carbon inequality. The reduction of energy and carbon inequality is not a meaningful goal by itself.
Current consumption inequality, however, is a barrier to achieving both scenario targets *and* providing minimum energy use (and minimum carbon in the short-term) for decent living to every European. At a global level, there is concern that achieving extreme poverty eradication may put global climate targets at risk [@hubacek_poverty_2017 @woodward_incrementum_2015 @alfredsson_why_2020]. In the European context, although less unequal than the globe as a whole, if/as lower-consumption groups increase their income and consumption, energy use and carbon emissions will increase if more efficient and cleaner technology is not adopted at a fast enough rate. Achieving an average per capita/adult equivalent energy and carbon footprint in Europe, in scenarios that reach the Paris agreement goals, means either doing so at current consumption inequality levels and keeping lower-economic groups near or below minimum energy use levels for decent living, or reducing consumption inequality.
# refs to add
demand side solution:
Royston, S., Selby, J. & Shove, E. Invisible energy policies: A new agenda for energy demand reduction. *Energy Policy* **123**, 127--135 (2018).
Current consumption inequality, however, is a barrier to achieving both scenario targets *and* providing minimum energy use (and minimum carbon in the short-term) for decent living to every European. At a global level, there is concern that achieving extreme poverty eradication may put global climate targets at risk [@hubacek_poverty_2017 @woodward_incrementum_2015 @alfredsson_why_2020]. In the European context, although less unequal than the globe as a whole, if/as lower-consumption groups increase their income and consumption, energy use and carbon emissions will increase if more efficient and cleaner technology is not adopted at a fast enough rate [@gough_recomposing_2017]. Achieving an average per capita/adult equivalent energy and carbon footprint in Europe, in scenarios that reach the Paris agreement goals, means either doing so at current consumption inequality levels and keeping lower-economic groups near or below minimum energy use levels for decent living, or reducing consumption inequality.
