The Netherlands and energy consumption of individual households:

To operate a survey or not?

According to the Netherlands Environment Agency, “the best way to fight the greenhouse effect is for countries to work together to cut greenhouse gas emissions.” The Netherlands is party to a number of international climate agreements, including the United Nations (UN) convention on climate change and the Kyoto Protocol. These agreements form the basis of Dutch policy on climate change. 

In December 2015, the UN held a climate summit in Paris: the Conference of Parties (COP 21). The Netherlands was one of the countries to sign up to a new UN climate agreement. The aim of the agreement is to limit global warming to below 2 degrees Celsius, if possible no more than 1.5 degrees. On April 22, 2016, on the occasion of Earth Day, environment minister Sharon Dijksma signed the climate agreement on behalf of the 28 member states of the European Union. The agreement is set to take effect in 2020.

The Netherlands bases its climate policy on, among other things, scientific reports by the Intergovernmental Panel on Climate Change (IPCC). The IPCC officialy writes reports for the UN about the causes and effects of climate change.

Climate mitigation and individual households’ energy consumption

In terms of mitigating greenhouse gases emissions, the availability of energy allows many people to enjoy unprecedented comfort, mobility and productivity. In industrialised countries, humans now use 100 times more energy than in the past, i.e. before they had learned to exploit the energy potential of fire (WEA, 2000).

In Agenda 21, the United Nations and its member states strongly endorse the goal of sustainable development (UN, 1992), a concept that implies meeting the needs of the present generation without compromising the needs of the future generations (WCED, 1987). Sustainable development is also required for the global energy system. Energy is very important in maintaining economic activities and the accompanying consumption level. In the World Energy Assessment (WEA, 2000) sustainable energy is defined as energy that is produced and used in ways that support human development in the long term with all its economic, ecological and social dimensions. Today's energy system can be concluded as not being sustainable. This is due to equity issues, and environmental, economic and geopolitical concerns, with implications reaching far into the future. According to WEA (2000), the following aspects in the current energy system reflect unsustainability:

- Energy carriers such as fuels and electricity are not universally accessible,？

- The current energy system is not sufficiently reliable for widespread economic growth, and？

- Negative local, regional and global environmental impacts of energy production and use are threatening to the health and well-being of current and future generations. WEA (2000) mentions the use of renewable energy sources, next-generation technologies and greater energy efficiency as options to address these aspects of unsustainability. WEA’s interpretation of 'greater energy efficiency' is related to the improvement of products and processes in technical or operational terms. However, energy consumption may not only be limited or reduced by improving the energy efficiency, but also by changing consumption patterns. IPCC (2001) mentions change in consumption patterns as a possible option for alleviating the effects of climate change.

Changes in consumption patterns normally go hand in hand with changes in the economic structure of society. According to IPCC (2001), the option of 'changing consumption patterns' is insufficiently explored. Analyses outlined here should be helpful in exploring the feasibility of changing consumption patterns.

Energy requirement from the perspective of consumption patterns

All products and services produced by an economic system are ultimately meant for consumption, mainly by households. Even if the products or services concerned are not directly meant for consumption in households, they do lead to investments or other products to make consumption in the future or later in the production？consumption chain possible. If consumption patterns change, the economic structure will also change. As economic activities vary in energy intensity1, changes in economic structure may very well affect the energy requirement of society.

The allocation of the required energy to the products and services that consumers purchase can be done using an input？output analysis or by applying process analysis. Energy input？output analysis as a method to achieve this aim was described and applied long ago, for instance, by Wright (1974) and Bullard and Herendeen (1975). Using an input？output analysis, Schipper et al. (1989) calculated that about half the energy requirement of households in the USA in 1986 was indirect. The respective calculations for the Netherlands in 1987 and 1990, made by

The energy intensity of a product/service is defined as the required primary energy for the product/service divided by the costs of the product/service in monetary units. Energy intensity can be expressed, for instance, in megajoules per Euro. Van Engelenburg et al. (1991) and Wilting (1996), also showed that about half the household energy requirement is indirect.？An input？output analysis gives a good view of the total required energy for household consumption, providing a breakdown into main consumption categories such as food, dwelling or transport. However, to observe the effect of more detailed changes in the consumption pattern on the energy requirement, a more accurate method such as process analysis (see e.g. Boustead and Hancock, 1979) is required for analysing the energy requirement of consumer products.

The two basic methods for calculating the energy requirement for the life cycle of a consumer good, (I) input？output analysis and (II) process analysis, will be described in this section.

In input-output analysis the energy requirement is determined using an economic- statistical approach. The transactions between the various sectors of an economy are collected in an input？output matrix (Leontief, 1966). For each combination of two sectors, the input？output matrix contains, in monetary terms, the supply from one sector to the other sector. A certain direct energy requirement can be attributed to each sector in the input？output matrix, for instance, on the basis of energy statistics. Subsequently, by applying several mathematical operations to the matrix, one can calculate the energy requirement associated with the delivery of the final goods to consumers. The use of input？output analysis for this aim was described and applied by Bullard and Herendeen (1975) and Wright (1974).

We can easily calculate the energy requirement of a complete life cycle from a consumer good through an input-output analysis. The method, however, is not very accurate because no distinction can be made between different products produced in the same sector, e.g. cut flowers and cherries are both produced in the same sector.

Determining the Primary Energy Requirement of Consumption Patterns

Input？output analysis implicitly assumes a sector in the input？ output table to be homogeneous. In reality, a range of products is produced in one sector; some products may be relatively energy-intensive (cut flowers) and others not very energy-intensive (cherries). The input？output approach ignores these differences.

The second approach is process analysis. Process analysis for a certain product starts with a definition of the life cycle, in which all the activities required for producing, transporting, using and disposing of a product are listed. This means that an inventory has to be made of the feedstock and intermediate products and the processes involved in the production of each feedstock. Subsequently, each process occurring in the life cycle is analysed to calculate its direct energy requirement. An initial extended deion of the method was given at an IFIAS meeting in 1975 (IFIAS, 1978). In the years following, this method was developed further and applied widely (Boustead and Hancock, 1979). Process analysis is more accurate than input？output analysis. However, typical life cycle analysis methods based on process analysis are very data-intensive and therefore also labour-intensive. Another problem is that in many cases not all data required for a process analysis are available.

Hybrid analysis

Input-output analysis can be applied relatively quickly for complete consumption patterns but is not very accurate. Process analysis is much more precise but also very laborious. A hybrid approach, already suggested by Bullard et al. (1978), combines the best elements of the two methods discussed before. On the basis of this proposal we developed a concrete calculation method (first published in 1994, see Van Engelenburg et al. (1994). Nowadays, there is a growing interest in hybrid methods, both for energy analysis and for environmental LCA. Suh et al. (2004) puts the hybrid approaches into three groups, namely, tiered hybrid analysis, input-output based analysis and integrated hybrid analysis. In a tiered hybrid analysis the life cycle is split into two parts: major processes and so-called remaining processes. The major processes are those that will most probably make an important contribution to the energy requirement of the product. The process analysis approach is used for the main processes, while the input？output analysis approach is used for the remaining processes. In the input-output based hybrid analysis, important input-output sectors are further disaggregated if more detailed sectoral monetary data are available. In integrated hybrid analysis the process-based system is represented in a technology matrix by physical units per operation time of each process, while the input-output- based system is represented by monetary units. Detailed unit process level information in physical quantities is fully incorporated into the input-output model. In this taxonomy, the approach used in this thesis can be considered as a tiered hybrid. The hybrid method will be described in section 3.

The use of fossil energy sources is one of the main causes of CO2 emissions. One way of reducing CO2 emissions is to reduce household energy requirements by influencing the consumption pattern. A household uses not only direct energy in the form of natural gas, electricity and petrol but also indirect energy embodied in con- sumer goods such as food, furniture and services. Van Engelenburg et al. (1991) estimated the direct energy requirement of households to be about half the total domestic energy requirement. This means that the indirect energy requirement can be all but ignored.

The Household Expenditure Survey

The Household Expenditure Survey of 1990 (CBS, 1992a) is based on a representative sample consisting of 2767 Dutch households whose expenditure was recorded in a detailed manner. All purchases exceeding Dfl. 25 were noted by each household for one year. All purchases were noted by each household for about two weeks. The amount of natural gas, electricity and water used (expressed in physical units) as well as some other physical parameters (like the floor space of the rooms of the house) were recorded (CBS, 1992b). The household expenses were extrapolated to a whole year. The total consumption of the households in the expenditure survey was divided into about 350 basic consumption categories. These categories are listed in Appendix 4A.

The most important definitions in the expenditure survey:

- Household: defined as a single person or group of persons who live together domestically and run a household together. People living in homes for the elderly and tramps are not included in the survey. A lodger and a family living independently in the same house are counted as two households. A lodger living with the family forms a part of the family-household. One person living alone in a separate dwelling is also defined as a household.

- Net income: the sum of income from employment, enterprise, capital, social security benefits and other income such as subsidies for house rental, state assistance with mortgages and employers' contribution to the state medical insurance scheme, minus pension contributions, social security contributions and income tax. All the incomes of the individual household members are added up.

- Total household expenditure: defined as the financial value of acquired goods and services for non-productive goals, including value added tax. Purchases in general are accompanied by financial transactions, but also included is the consumption of free products e.g. fruit from one's own garden or presents received from other households. Not all of these household expenditures were included in our analyses. Because of a lack of specified data in the expenditure survey the following categories are excluded: transfers to third parties (like local taxes, examination-, school- and lecture-fees), payments to other households, investments and payments by instalment, subions to trade unions, gifts to charity and legal charges (CBS, 1992b). In this chapter the remainder is indicated as ‘household expenditure’ or simply as ‘expenditure’. Note that the 'total household expenditure' is not equal to the 'net income'. The difference is caused by loans received and savings made

Determining the cumulative energy requirement of the consumption items

The 350 basic consumption categories in the expenditure survey are aggregated into 13 main consumption categories; food, household effects, house, clothing & footwear, hygiene, medical care, education, recreation, communication, transport, petrol, heating and electricity. The main category 'heating' does not only include expenditure on fuel for heating the house, but also expenditure on collective and district heating of the house. The main category, 'household effects', includes expenditure on the maintenance of the house, garden and flowers, stoves, boilers, central heating systems, furnishing, tools and all kinds of household machines such as washing-machines and food-mixers.

To determine the cumulative energy requirement of a consumption item we used a hybrid energy analysis method (Van Engelenburg et al, 1994). This hybrid energy analysis method allows relatively easy calculation of the cumulative energy require- ment of a consumption item in a fairly accurate way. This is achieved by combining the best elements of two existing methods for determining the cumulative energy requirement of goods and services: process analysis and input？output analysis.

Expenditure on durable consumer goods (e.g. cars, furniture or floor-coverings) may peak in the year of survey for some of the households. For instance, a household in the expenditure survey purchasing a car in 1990 will have a high expenditure (and also a high energy requirement). The energy requirement of a household may be particularly high if the household moves in the year of the survey. In addition, the spread of the expenditure over products and services costing less than Dfl. 50 (surveyed only for two weeks) can be partly explained by the season in which the household had to write down these expenses (e.g. drinks may be a larger expense in summer). These effects will not influence the average results, but part of the spread in several consumption categories (e.g. transport) can be explained by this factor.？In the expenditure survey the household expenditure in some categories is underreported. The most underestimated expenses are those in connection with the hotel and catering industry, leisure, (alcoholic) drinks and smokers' requisites and motor fuels (CBS, 1992c). This may cause some limited underestimates of these consumption categories. The contribution of these categories -excluding motor fuels- to the total energy requirement is so small that it will not affect our results significantly. If we were to correct for the underestimated expenses connected with motor fuels, the total energy requirement would rise by an average of 4 GJ per household per year.

However, there is one notable exception. It is conceivable that households with a higher income (or a higher expenditure level) systematically buy products that cost more per physical unit. The consequence of this is that the real elasticity of the energy requirement related to income (or expenditure level) can be smaller than the value computed here. However, the effect turns out to be very moderate. Vringer and Blok (1997) found a maximal decrease of the elasticity of the energy requirement related to net household income due to price income relationships, from 0.63 to somewhere between 0.56 to 0.60.

Because at least 54% of the total energy requirement of households consists of an indirect energy requirement, there is a need for further research into this indirect energy requirement. Future energy policy will have to pay attention to the indirect energy requirement of households. The positive relationship between income and total energy requirement suggests that, with further increases in income levels, the average household energy requirement will probably rise as well. However, the large differences between the energy intensities of the various consumption categories indicate that the total household energy requirement can be reduced if we change our consumption patterns. The substantial spread in the total energy requirement of households within the same income category also supports this view. This analysis can form the basis for further research into ways of reducing household energy requirement. Attention needs to be given not only to the direct energy consumption (including the category 'petrol') but also to the consumption categories, 'transport', 'education' and 'recreation'. This is because these categories have a relatively large spread and form an important part of the indirect energy requirement of households.

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