The role of consumption patterns, demand and technological factors on the recent evolution of CO2 emissions in a group of advanced economies

- We study the factors underlying CO2 emissions linked to households' activity.
- We use IO-SDA to study the role played by different factors.
- Demand, consumption patterns, technology and energy intensity are studied.
- Demand growth absorbs the limited effect of technological and efficiency improvements.

Changes in production structures and modifications of patterns of consumption are key factors in the fight against environmental harm. Initiatives such as Agenda 21, promoted by the UN, highlight the need to evaluate the relationships among factors of production and consumption, innovation and demographics, and the environment, in the attainment of sustainable development. In this context, our work studies in depth those factors underlying the economic activity of households, in a representative group of European Union countries and the US. Within the framework of an input-output model, a Structural Decomposition Analysis is considered in order to identify the weight that growth in demand, changes in patterns of consumption, changes in the distribution of income, the substitution of inputs, and changes in energy intensity have all had on the evolution of CO2 emissions. The work specifically seeks to identify common patterns and differential behaviors among productive sectors in the European social environment. The results show that growth in demand, and therefore in production, largely absorbs the limited effect of technological and efficiency improvements and the incipient changes observed in consumption patterns.