Live After Quit

Consumption-Based vs. Income-Based Carbon Footprints

The idea of an individual’s or a household’s carbon footprint is how much that person or household contributes to climate change.  All anthropogenic climate change is caused by humans (by definition), so let’s take all the humans who have ever lived and divide up the responsibility for climate change amongst them.  What fraction of climate change is my fault?

To calculate one’s carbon footprint, we look at the things we buy and do.  E.g. when I drive my car and burn gasoline, when I run my air conditioner, when I take a flight, or when I eat a steak, I add up all the greenhouse gases emitted in doing those activities and making those products.  All those greenhouse gases thus make up my carbon footprint, and therefore are my “fault.”

The notion of a carbon footprint has encountered some controversy.  The argument against it, summarized in this NY Timed op-ed, is that focusing on individuals’ or households’ carbon footprints is distracting from the fact that climate change is ultimately the “fault” of big corporations, especially fossil fuel companies.  In fact, the notion of a carbon footprint was invented by a PR firm hired by an oil company, BP.  According to this argument, that was done to shift the responsibility from the true perpetrators and onto ordinary people just trying to live their lives in a world that’s run on fossil fuel.  Auden Schendler writes, in the op-ed:

Nor was BP alone among the big oil companies communicating this message. A study by Naomi Oreskes and Geoffrey Supran at Harvard published in May in the journal One Earth found that since 1972, ExxonMobil has consistently used “rhetoric aimed at shifting responsibility for climate change away from itself and onto consumers.”

The counter-argument to this argument is that, while the fossil fuel companies and airlines, etc., are the ones emitting all of these greenhouse gases, they’re only doing it to sell stuff to consumers.  It’s ultimately then the consumers who are to “blame” for climate change; big oil wouldn’t be pumping out oil if consumers didn’t want to drive cars.  This counter-argument is popular among neoliberals and mainstream economists. It’s pretty much what I believed.

But then I read this article, and listened to this podcast interview, both by Matt Huber, a geography professor who is writing a book called “Climate Change as Class War.”  Carbon footprints show that the rich are disproportionately contributing to climate change – they consume more, and pretty much everything consumed by anyone has embedded carbon.  But Huber argues that even this degree of regressivity in the contribution of the rich towards climate change is understated, because the carbon footprint is based only on someone’s consumption or spending, and not on how they earned the income that they spend.  This excerpt has been nagging at me:

Here’s a hypothetical example: take a CEO of an airline company. This person spends eight to twelve hours per day helping to organize a fleet of thousands of planes that emit millions of tons of carbon dioxide per year. As CEO, their income and stock options are primarily derived from this activity, planning and expanding air travel as a commodity for sale.

Now imagine our CEO goes home in their SUV and eats a steak for dinner. Why is this activity the only one we focus on when talking about “carbon inequality”? Surely the SUV and steak are drops in the bucket compared to their everyday role as a titan of aviation capital.

There is a lot in Huber’s article that is Marxist, which is maybe off-putting for some people.  But even if you’re not Marxist, there is a core point in there that seems to me intriguing: why is my carbon footprint based only on my consumption and not on my income sources?

This distinction is analogous to distinction between sources-side and uses-side incidence.  Under some policy change, say a tax increase, incidence refers to the distribution of the burden of the tax. There is the uses-side incidence, which is how the tax will affect prices of goods and services.  Then there is the sources-side incidence, which is how the tax will affect income, e.g. through affecting the wage or the return to capital.  The standard definition of a carbon footprint is thus a uses-side carbon footprint.  But can’t we also define a sources-side carbon footprint

To extend Huber’s example from above: consider an executive at a fossil-fuel company who happens to be very “green” in his personal consumption – he walks or bikes to work, is vegetarian.  Consider also a schoolteacher, who has to commute far to work each day to live in an affordable neighborhood, and drives a minivan to take her kids to childcare, so gets low fuel economy.  The teacher has a higher carbon footprint (based on the standard definition). But does she really hold more “blame” for climate change than a fossil-fuel executive?

(I’m putting scare quotes around words like “blame” and “fault” to keep in mind that there aren’t objectively correct answers to how we divide this up – the climate doesn’t care who is responsible for the greenhouse gases, it just keeps warming.  I’m not suggesting that the income-based footprint might be “more correct” than the consumption-based on, just that they are two alternate ways of defining footprints.)