Household Behaviour and the Environment ... - …

1 Household Behaviour and the EnvironmentREVIEWING THE Behaviour and the EnvironmentREVIEWING THE EVIDENCE Cover Photos: roza - , Nicolas LOGEROT - , paul prescott - , mudman - , - Behaviour and the Environment REVIEWING THE EVIDENCEH ousehold Behaviour and the Environment Reviewing the Evidence ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; to contribute to sound economic expansion in Member as well as non-member countries in the process of economic development; and to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations.

2 The original Member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece,Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became Members subsequently through accessionat the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971),New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7thMay 1996), Poland (22nd November 1996), Korea (12th December 1996) and Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention). OECD 2008 Permission to reproduce a portion of this work for non-commercial purposes or classroom use should be obtained through the Centre fran ais d exploitation du droit de copie (CFC), 20, rue des Grands-Augustins, 75006 Paris, France, Tel.

3 (33-1) 44 07 47 70, Fax (33-1) 46 34 67 19, for every country except the United States. In the United States permission should be obtained through the Copyright Clearance Center, Customer Service, (508)750-8400, 222 Rosewood Drive, Danvers, MA 01923 USA, or CCC Online: All other applications for permission to reproduce or translate all or part of this book should be made to OECD Publications, 2, rue Andr -Pascal, 75775 Paris Cedex 16, France. TABLE OF CONTENTS 3 Table of Contents 1. INTRODUCTION .. 5 1. OBJECTIVE .. 5 2. BACKGROUND .. 5 3. APPROACH .. 7 4. THEORETICAL INSIGHTS .. 9 5. MAIN MESSAGES .. 13 6. ROAD MAP .. 14 2. WASTE GENERATION AND RECYCLING .. 19 1. INTRODUCTION .. 19 2. LITERATURE REVIEW .. 21 Waste generation .. 21 Recycling .. 34 Waste prevention .. 42 Willingness to pay .. 45 3. POLICY IMPLICATIONS .. 46 3. PERSONAL TRANSPORT CHOICE .. 59 1. INTRODUCTION .. 59 2. EMPIRICAL STUDIES OF THE DETERMINANTS OF PERSONAL TRANSPORT.

4 60 Characteristics of the individual and residential location .. 61 Characteristics of the transport system .. 76 3. POLICY IMPLICATIONS .. 80 Effectiveness of policy measures .. 81 Differences between individuals .. 83 Distributional implications .. 84 Research needs .. 87 4. RESIDENTIAL ENERGY DEMAND .. 95 1. INTRODUCTION .. 95 2. RESIDENTIAL ENERGY USE: A DERIVED DEMAND .. 96 3. FRAMEWORK .. 97 Preferences .. 97 Income .. 98 Price .. 98 Attitudinal and other non-economic variables .. 99 4. EMPIRICS OF RESIDENTIAL ENERGY DEMAND .. 100 Income elasticity .. 100 Price elasticity .. 101 Non-economic variables .. 103 A sample of studies .. 105 5. CONCLUSION AND POLICY IMPLICATIONS .. 107 OECD 2008 4 Household Behaviour AND THE Environment OECD 2008 5. ENVIRONMENTALLY RESPONSIBLE FOOD CHOICE .. 117 1. INTRODUCTION .. 117 2. THE ENVIRONMENTALLY RESPONSIBLE FOOD CHOICE: A CONCEPTUAL FRAMEWORK .. 119 How to measure the demand for ERPs.

5 119 Theoretical background .. 120 3. EMPIRICAL EVIDENCE ON THE DETERMINANTS OF THE ERP FOOD CHOICE .. 122 Traditional economic variables: prices and income .. 122 Intrinsic quality attributes .. 127 Attitudinal and behavioural variables .. 127 Policy and marketing variables .. 133 4. POLICY IMPLICATIONS .. 135 Policy remedies to market imperfections .. 136 Effectiveness of certification and labelling as informational signals .. 137 Some clues from the literature: the consumer of ERP .. 138 5. FINAL REMARKS .. 140 6. RESIDENTIAL WATER USE .. 153 1. INTRODUCTION .. 153 2. LITERATURE REVIEW .. 155 Determinants of the demand for water use .. 156 Welfare impacts .. 171 3. POLICY IMPLICATIONS .. 172 7. CONCLUSIONS AND POLICY IMPLICATIONS .. 181 1. FACTORS INFLUENCING Household CONSUMPTION AND Behaviour : MAIN EMPIRICAL FINDINGS .. 181 Factors influencing waste generation and recycling .. 181 Factors influencing personal transport choices.

6 184 Factors influencing residential energy use .. 187 Factors influencing the demand for organic food consumption .. 189 Factors influencing residential water use .. 190 2. GENERAL POLICY IMPLICATIONS .. 193 Choosing and combining policy instruments .. 193 Targeting environmental policies to increase their effect on households .. 195 3. MOVING FORWARD .. 197 ANNEX A .. 201 ANNEX B .. 217 ANNEX C .. 246 1. Introduction Ida Ferrara (York University) and Ys Serret (OECD) 1. Objective This volume is based on the proceedings of the OECD Workshop on Household Behaviour and Environmental Policy: Review of Empirical Evidence and Policy Issues organised by the Environment Directorate, 15th-16th June 2006, in Paris. The objectives of this volume are twofold: To review empirical evidence to better understand the determinants of Household environmental Behaviour in five key areas of environmental policy: waste generation and recycling, personal transport choices, residential energy use, food consumption and domestic water use.

7 To provide further insight into how to improve the effectiveness and efficiency of environmental policies that affect households, while addressing social concerns. 2. Background Environmental pressure from households is projected to significantly increase by 2030 (OECD, 2008a). One of the key determinants of Household consumption patterns is economic growth, with the relative economic importance of countries such as China and India increasing. Steep growth in the world population (from approximately 6 billion in 2000 to over billion in 2030) will also be an important driver of consumption. The trend towards ageing of the population, urbanisation and changing lifestyles will influence the structure of consumption as well. Concerns about the environmental impacts of consumption and production, such as loss of natural resources, climate change and other environmental damage caused by emissions and waste, have been addressed at the global level by the United Nations since the 1992 Earth Summit, in Rio de Janeiro.

8 The 2002 Johannesburg World Summit on Sustainable Development called for the development of a 10-year framework of programmes to promote sustainable consumption and production patterns. This challenging task is co-ordinated under the UN-led Marrakech process. OECD 2008 6 Household Behaviour AND THE Environment In response to the increasing environmental impacts of consumption, governments introduce policies to affect households patterns of consumption and influence their decisions (OECD, 2008b). Some recent national initiatives include: the phasing out of incandescent bulbs ( Australia, EU Directive), tighter minimum energy performance standards for residential buildings ( Australia, Canada, Japan, EU Directive), fuel consumption labels ( Canada, Korea, EU Directive), incentives to buy alternative-fuel vehicles ( Canada, Norway, Sweden), congestion charges ( UK, Sweden), grants for residential energy conservation projects ( France, Germany), differentiated vehicle taxation ( Korea, the Netherlands), rebates for investment in water efficient equipments ( Australia) and organic food labelling ( Canada).

9 Previous work has highlighted the need to have more insights on Household environmental Behaviour and consumption patterns (OECD, 2002; EEA, 2005). How do households respond to the various types of policies implemented by governments to promote more sustainable consumption patterns? How does environmental Behaviour vary across households? In this context, a project on Household Behaviour and Environmental Policy was initiated at the OECD Environment Directorate, in 2005, to provide guidance on the design of environmental policies targeted at households. This work aims at better understanding Household environmental Behaviour and how policies implemented by governments may affect Household decisions in order to guide policy makers in their search for effective and efficient environmental policies, while addressing social concerns. Five areas in which environmental impacts arising from Household consumption are significant were selected for analysis: energy and water use, food consumption, transport choices, and waste generation and recycling.

10 This activity consists of two main phases carried out over the period 2005-2008, under the guidance of the Working Party on National Environmental Policies (WPNEP). As part of the first stage, existing empirical evidence on the main drivers of Household Behaviour in these five policy areas were reviewed and the results were presented at the 2006 OECD Workshop on Household Behaviour and Environmental Policy: Review of Empirical Evidence and Policy Issues . More than sixty participants, attended the Workshop, including representatives from governments, academia, international organizations involved in the Marrakech Process (UNEP) and non-governmental organisations (NGO s). The background papers commissioned by the OECD for the Workshop, as well as a review of the literature on the determinants of residential water use, served as inputs to the preparation of this volume. This stocktaking exercise provided guidance for the next phase of the project, by identifying issues which could be usefully addressed with this OECD activity.