Working Paper: NBER ID: w30238
Authors: Matthew E. Kahn; Somik Lall
Abstract: As billions of people in the developing world seek to increase their living standards, their aspirations pose a challenge to global efforts to cut greenhouse gas emissions. The emerging middle class are buying and operating energy intensive durables ranging from vehicles to air conditioners to computers. Owners of these durables represent an interest group with a stake in opposing carbon pricing. The political economy of encouraging middle class support for carbon pricing hinges on offsetting its perceived negative income effects. Rising environmentalism in the developing world could also increase support for credible GHG reduction policy. We quantify these effects as we estimate Engel curves of durables ownership, compare the grid’s carbon intensity by nation and study the demographic correlates of support for prioritizing environmental protection.
Keywords: middle class; low carbon policies; durable goods; carbon pricing; environmental protection
JEL Codes: H23; H87; Q54
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| income growth (O49) | durable goods ownership (L68) |
| durable goods ownership (L68) | opposition to carbon pricing (D49) |
| income growth (O49) | carbon emissions (Q54) |
| durable goods ownership (L68) | carbon emissions (Q54) |
| carbon pricing (Q58) | opposition to carbon pricing (D49) |
| income growth (O49) | support for environmental protections (Q58) |