RFF-CMCC EIEE Webinar-Seminar

Title: Do sufficiency consumption changes drive emissions down? A production network approach

Speaker: Célia Escribe (CIRED)

Abstract: Sufficiency, encompassing both absolute reductions in consumption and shifts to less environmentally impactful consumption modes, emerges as one of the necessary pillars of decarbonization. Yet, its broader economy-wide implications remain underexplored. To bridge this research gap, we develop a stylized macroeconomic model that integrates changes in consumption patterns within a disaggregated microeconomic production framework. We derive comparative statics to unravel three primary propagation channels for consumption changes: a direct demand effect that includes income reallocation, a price effect, and a substitution effect. While the income reallocation effect aligns with existing input-output literature, the other channels represent novel theoretical contributions to sufficiency studies. Importantly, we demonstrate that both the price and the substitution effect rely on the underlying structure of the economic production network and on the elasticities of substitution. Together, these effects drive the overall emissions’ reduction impact of sufficiency consumption changes. Using multi-regional input-output data, we calibrate our model to evaluate the impacts of two specific consumption changes: transitioning to a vegetarian diet and reducing personal vehicle usage. Our initial results show that both interventions lead to a reduction in overall emissions through the demand channel, of respectively 0.9% and 2.6%. We estimate rebound effects as high as 45 % due to the price and substitution effects. This suggests that existing literature may overestimate the emission reduction potential of sufficiency consumption changes by neglecting key macroeconomic feedback mechanisms. We are currently investigating other forms of sufficiency consumption changes to explore whether such rebound effects persist under a more systemic definition of sufficiency.

 

Hybrid event for EIEE members only.