Household income distribution, basic needs and total energy consumption: a case study of Brazil

Luis Gustavo Tudeschini, of the University of São Paulo, Brazil, investigated living conditions in the country, and how much energy and resultant carbon emissions it would require to improve them.

Luis Gustavo Tudeschini

Luis Gustavo Tudeschini

Introduction

In recent years, despite almost 2 billion people ascending to the middle class [1], over 2.2 billion people remain vulnerable to multidimensional poverty [2]. Erasing these vulnerabilities and rising consumption class will affect the nature and the extent of energy demand and greenhouse gas emissions. Using Brazil as case study, this project aims at analyzing i) differences in expenditures across income groups ii) the energy intensities across different income groups, iii) the energy intensity to provide basic needs, and iv) the energy growth implications of income growth and distribution.

Methods

The notion of “basic needs”, as defined in this project, includes seven factors related to education, nutrition, shelter, and transportation. Using available data from the Brazilian Consumer Expenditure Survey (POF), we analyze for 12 income groups the following topics: 1. Access to electricity, 2. Education level of the head of household, 3. Access to piped municipal water, 4. Access to improved sanitation facilities, 5. Access to motorized transport, 6. Recommended intake calories and 7. House constructed with permanent materials. Intensity and content of household-level energy consumption were estimated using the hybrid input-output energy model, which combines monetary and energy flows for each sector and type of final demand [3]. The hybrid matrix was built using the Brazilian Energy Balance and Input-Output Matrix (year 2009), and incorporating a price adjustment for income classes, an innovative approach.

Results

We observe that most important vulnerabilities lie in water and sanitation access, and level of education. The total (direct and indirect) energy consumption per capita increases with income; however, the energy intensity decreases as the income level rises. The price adjustment leads a difference of up to 77% in energy intensity, when compared with non-adjusted method.

Conclusions

Overall, while energy consumption and human development are positively correlated with income, energy intensity follows the opposite pattern; confirming empirically previous conjectures. Subsequent steps will isolate the energy consumption related with basic needs to that related with discretionary expenditure.

References

[1] Kharas H. (2010). The Emerging Middle Class in Developing Countries. OECD Development Centre Working Papers doi:10.1787/5kmmp8lncrns-en.

[2] Malik K, Kugler M, Kovacevic M, Jespersen E, Bhattacharjee S, Bonini A, et al. (2014). Human Development Report. New York.

[3] Miller RE, Blair PD. (2009). Input-Output Analysis - Foundations and Extensions. 2nd ed. Cambridge: Cambridge University Press.

Supervisor

Narashima Rao, Energy Program, IIASA

Note

Luis Gustavo Tudeschini, of the University of São Paulo, Brazil, is a citizen of Brazil. He was funded by the IIASA Brazilian National Member Organization and worked in the Energy Program during the YSSP.

Please note these Proceedings have received limited or no review from supervisors and IIASA program directors, and the views and results expressed therein do not necessarily represent IIASA, its National Member Organizations, or other organizations supporting the work.


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Last edited: 02 February 2016

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