More or Better? A Model for Changes in Household Greenhouse Gas Emissions due to Higher Income

Summary Households exert an important influence on total greenhouse gas (GHG) emissions. Therefore, their consumption behavior is of interest in evaluations of climate policy options and projections of future emission paths. While most evaluations of household consumption and its emissions are based on expenditure only, we use a household consumption model based on functional units (e.g., kg food, person kilometers, living square meters). The goal of this article is to assess changes in consumption with increasing affluence level of households and to compare the allocation of GHG emissions to monetary versus functional units. We find that (1) the model based on functional units provides good bottom‐up estimates for greenhouse emissions of Swiss households; (2) quality (price per functional unit) increases with income for many consumption categories, and therefore using functional instead of monetary units leads to a lower increase of greenhouse gas emissions with income; (3) the relevance of GHG emissions from goods and mobility will increase. We conclude that using household models based on monetary units only overestimates the impact of marginal consumption and neglects the potential of decoupling income and environmental impact by consuming better instead of more. For sustainable consumption, research and policy should aim at preventing goods of higher quality from having higher environmental impact in order to benefit from the increasing quality orientation with rising income.