Indicator Fact Sheet Signals 2001 Chapter Households. Household expenditure - EU15Ã. 1980Ã 1982Ã 1984Ã 1986Ã 1988Ã 1990Ã 1992Ã 1994Ã 1996Ã Food &

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1 Indicator Fact Sheet Signals 2001 Chapter Households YIR01HH04 Household expenditure by category à 200à Household expenditure - EU15à 180à 160à Index 1980= à 120à 100à 80à 60à 40à 20à 0à 1980à 1982à 1984à 1986à 1988à 1990à 1992à 1994à 1996à Food & Rent & clothes Medical Transportà housing care Recreationà Otherà Totalà Household expenditure by category, EU15, (index 1980=100, constant 1990 prices) à Key message K Consumer spending per capita has increased by 46 % since 1980, shifting from basic needs (food, housing) towards less basic needs (transport, fuel, recreation). Results and assessment (level of the indicator) Relevance of the indicator for describing developments in the environment Household expenditure generally accounts for about 60 % of GDP. An increase in household consumption generally means more resource use, pollution and waste generation. On the other hand, the economic growth that enables household consumption to increase provides opportunities to finance public expenditure for environmental protection, and provides opportunities to develop environmentally friendly goods in response to consumer demand. Policy relevance and policy references The objective of many national environmental and energy taxes is to reduce the consumption of products and services that have negative environmental impact. Several policies are directed towards providing more information on the environmental impact of products (see YIR01HH08 on eco-labelling and energy-efficiency labelling). Assessment In 1997 the average EU citizen spent EURO 9 400, nearly twice the 1980 figure in real terms. About half the total went on food and housing and a quarter on transport and recreation. The steepest growth was in spending on health, to nearly twice the 1980 figure, probably partly reflecting the increasing age of the population. The make-up of household expenditure has shifted gradually from basic to less basic needs from food, clothing and housing towards transport, fuel and recreation. Between 1980 and 1997, 1

2 expenditure on food and clothing increased by 20 %, on housing by 47 %, on transport by 65 % and on recreation by 73 %. Among the new consumerism, a marked increase in expenditure on recreation and leisure includes the growth in private car use and tourism. In addition to the environmental problems associated with increasing transport to recreation sites and holiday destinations, impacts on the environment result from high-energy consumption and the degradation of local resources such as water, soil, landscape and habitats. The seasonal nature and geographical concentration of mass tourism and the increase in second homes and tourism-related buildings and infrastructures, often in environmentally-sensitive areas such as lakesides, seashores and mountains, can add significantly to the environmental impact of households. Different products, and different ways of using them, result in widely differing impacts on the consumption of natural resources and the environment. It is therefore important for the consumer to be properly informed and where there is a choice, to choose products that have a lesser environmental impact. Table1 lists the environmental impacts of some common products. 7DEOHÃÃÃ (QYLURQPHQWDOÃLPSDFWÃRIÃVRPHÃRIÃWKHÃSURGXFWVÃZHÃFRQVXPHÃSDUWO\ÃEDVHGÃRQÃ&RQVXPHUVÃ DQGÃWKHÃ(QYLURQPHQWÅÃ1&&ÃÃ Product Environmental impact Food and Food production involves agriculture and fisheries, food processing, transport, distribution and beverages retailing. Intensive modern agriculture involves the use of fertilisers and pesticides, and the loss of natural habitats and genetic diversity resulting from a range of modern farming practices. Food processing produces solid waste and wastewater, and is energy-intensive. Food preparation at home, in particular the energy used for conserving (freezer-refrigerators) and cooking, is an important contributor to the overall environmental impact of food and drink. Food scraps account for much of household waste (28 % by weight in the UK) and food packaging is a large fraction of the packaging material disposed of by households. Textiles and Man-made fibres are derived from fossil fuels; natural fibres such as cotton are grown with clothing intensive use of fertilisers and pesticides. Around half of the global demand for textiles involves cotton, which is a major user of insecticides (almost 11 % of all pesticides used each year). The major environmental impacts of cotton growing are indirect and remote from the EEA area. Some of the processing of fibres into fabrics takes place in the EEA area. The major environmental impact of textiles in use is from the detergents used in laundering. Textiles form a small part of household waste by mass (1.9 % in UK). Buildings and The main environmental impacts of buildings include mining and quarrying, energy used in housing construction, and transport of materials. During the life of a building, energy and water are consumed., There is a large amount of solid waste at the end of a building s life. The environmental impact of a building will depend on when it was built, its uses, and its life. Furniture The main environmental impacts of furniture are from timber production (forestry), seasoning, machining, finishing with paints and varnishes, transport and disposal. The most important are related to forestry practices. Energy use See Energy production and household energy use (YIR01HH06). Water use See Household water use (YIR01HH07). Paper products The greatest environmental impact of paper production relates to pulp production, including water and air emissions. Significant progress in technology has generally reduced the emissions. Use of recycled paper may reduce the total energy used in manufacture by 40 %. In terms of primary energy, the energy used to make one household s annual supply of paper is approximately equivalent to the energy used to power a fridge or freezer for a year. Cleaning products Cleaning products include laundry and dishwasher detergents, washing-up liquids, surface cleaners, and toilet and oven cleaners. Their main environmental impacts are the energy used in manufacture, packing, and the effects on watercourses after disposal. The average household uses a washing machine 264 times a year involving 26 kilos of laundry detergents. Running the machine uses between four and ten times as much energy as is used to manufacture the detergents it uses. The main areas for environmental improvements are detergents that operate better at lower temperature, and better systems for dosing. 2

3 Vehicles (transport) Recreation and tourism Transport has major impact on the environment. See Transport factsheets. See Tourism factsheets. Table 2: Household final consumption expenditure in EU15 (billions of euros) in constant prices. Food, beverages and tobacco [CM 1] Clothing and footwear Gross rent, fuel and power Furniture, furnishings and household equipment and operation Medical care and health expenses Transport and communication Recreation, entertainment, education and cultural services Miscellaneous goods and services Total Table 3: Development in household consumption expenditure (index 1980=100). Food & clothes Rent & housing Medical care Transpor t Recreati on Other Total Table 4: Household consumption expenditure (constant prices) in euros/capita. EU Food & clothes Rent & furniture Medical care Transport Recreation Other Total

4 Table 5: Total household consumption expenditure in billion euros (constant prices). be dk de gr es fr ie it lu nl at pt fi : : se uk EU is Meta data Technical information 1. Data source. Eurostat New Cronos Domain SEC2 - National Accounts - Branches of production, investment goods and Final consumption of Households Data table: c16a70u1: Constant prices - Final consumption of households on the economic territory in millions of Ecu. 2. Description of data. The domain SEC2 contains disaggregated macro-economic data harmonised following the ESA-79 standard for 18 European countries, the USA, Japan and several groups of countries (European Union, EFTA, EEA, etc.): (a) for 25 homogeneous branches of production and their groupings, (b) for 7 investment products and their groupings, (c) for 42 consumption functions and their groupings. Household consumption expenditures have been selected for the following main categories: c01 Food, beverages and tobacco [CM 1] c20 Clothing and footwear [CM 2] c25 Gross rent, fuel and power [CM 3] c30 Furniture, furnishings and household equipment and operation [CM 4] c39 Medical care and health expenses [CM 5] c47 Transport and communication [CM 6] c54 Recreation, entertainment, education and cultural services[cm 7] c61 Miscellaneous goods and services [CM 8] c72 Final consumption of households [Sum CM1 to CM8] 3. Geographical coverage. EU15+Iceland 4. Temporal coverage

5 5. Methodology and frequency of data collection. Member States report annually information to Eurostat on household consumption expenditure based on harmonised grouping. 6. Methodology of data manipulation. Household consumption expenditures have been selected for the above-mentioned categories; in diagram b; the sum of C01 & C20 is used for the category Food and clothing and the sum of C25 & C30 for Rent & furniture. Qualitative information 7. Strength and weakness (at data level). See Reliability, accuracy, robustness, uncertainty (at data level) Many of the data are estimated (~e) by Eurostat to make a complete set of expenditures by expenditure category. 9. Further work required (for data level and indicator level.) It is complicated to relate the household consumption expenditures by expenditure category to environmental impacts. More information is needed the relation between expenditure in the different categories and the resulting environmental pressures. References & other reading OECD, 1999: Towards more Sustainable Household Consumption Patterns Indicators to Measure Progress OECD ENV/EPOC/SE(98)2/Final NCC, UK, 1997: Consumers and the environment: can consumers save the planet? 5