Producers cut greenhouse gas, household emissions fall

Producers creating less greenhouse gas help household emissions fall

The average New Zealand household’s emissions fell 11 percent between 2006 and 2012, mostly because the production of some high-emissions goods is creating fewer greenhouse gases.

In particular, improvements in carbon intensity were made in milk, cheese, and eggs, meat and poultry, air travel, and electricity.

“For example, emissions intensity of meat fell nearly 10 percent because of how farmers now produce their beef and lamb.” said Suzi Kerr, Senior Fellow at Motu Economic and Public Policy Research.

So it’s not that people are eating less red meat, because they’re not. Instead, our farmers have done a lot through pastoral grazing systems and efficiency measures to reduce greenhouse gas emissions.

“Despite the improvements, however, it’s clear that further cuts in our agricultural emissions by both producers and consumers are needed if we want to stay below 2 degrees of global warming,” said Dr Kerr. “Many policies, possibly including bringing agriculture into our emissions trading scheme could facilitate this.”

Food (particularly red meat and dairy), household utilities (particularly electricity and gas), and transport account for 89 percent of emissions for the average household.

“It’s been great to see the emissions intensity of electricity fall by more than 25 percent over the period we studied,” said Dr Kerr. “Much of that is due to the increased share of renewable energy in New Zealand’s generation mix. Kiwis also used less electricity, probably because of higher prices and gradual energy efficiency improvements like insulation, so overall average household emissions from electricity consumption fell by 30 percent.”

Unfortunately, emissions from petrol increased about ten percent as regular petrol became ‘dirtier’. Because households also consumed more fuel, average household transport emissions rose about 28%. In contrast, air travel became more greenhouse gas efficient, due to airplane improvements and better fuel efficiency.

“Household emissions from air travel fell even though wealthier households are doing more air travel than they were,” said Dr Kerr.

How much a household spends, and who lives in it explain nearly 70 percent of the variation in emissions across households.

The relative importance of the different categories changes with a household’s income. Food emissions make up roughly 40 percent of emissions no matter your income. Utilities contribute about 30 percent of emissions for poorer households but just over 20 percent for the wealthiest households. The importance of transport emissions increases as households become wealthier, with the share rising from about 20 percent to about 25 percent.

"However, it's not just the level of expenditure that is important in determining emissions; the choices households make about what goods to consume also have large impacts,” said Dr Kerr.

For example, if you compare the top and bottom 10 percent of emitters at each income level, emissions from meat and dairy are 251 percent higher in the most emitting households than the lowest emitting households, while emissions from petrol and diesel are 377% higher.

A recent academic paper by Dr Kerr and Corey Allan outlines this issue in more depth: “Who’s Going Green? Decomposing the Change in Household Consumption Emissions 2006-2012.” is now available on the Motu website.

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About Motu

Motu Economic and Public Policy Research is an independent economic research institute which never advocates an expressed ideology or political position. A charitable trust, Motu is founded on the belief that sound public policy depends on sound research accompanied by well-informed and reasoned debate.

Motu is the top-ranked economics organisation in New Zealand. It is in the top ten global economic think tanks, according to the Research Papers in Economics (RePEc) website, which ranks all economists and economic research organisations in the world based on the quantity and quality of their research publications.

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