The rebound effects of switching to vegetarianism : a microeconomic analysis of Swedish consumption behavior

Abstract: In order to reduce our environmental footprint, policy-makers have increasingly focused on influencing individual-level consumption choices. Recent years have seen a special focus on sustainable eating patterns, in particular the environmental benefits of a vegetarian diet. However, reliable conclusions on this issue need to take full-scale behavior changes into consideration. This can be achieved using the concept of the indirect rebound effect, which describes the amount of potential environmental improvements not realized due to the re-spending of expenditure saved during the initial behavior shift. This study aims to quantify the potential environmental savings stemming from the shift of an average Swedish consumer to vegetarianism, as well as the most likely rebound effects, in terms of both energy use and greenhouse gas emissions. To this end, it estimates Engel curves of 117 consumption goods, derives marginal expenditure shares from them, and links these values to environmental intensity indicators. Results indicate that switching to a vegetarian diet could save an average Swedish consumer 16% of the energy use and 20% of the greenhouse gas emissions related to their food and drink consumption. However, if they re-spend the saved income according to their current preferences, they would forego 96% of the potential energy savings and 49% of the greenhouse gas emission savings. These rebound effects are even higher for lower-income consumers, since they tend to respend on more environmentally intensive goods. Yet, the adverse effect could be tempered by simultaneously purchasing organic goods or by re-spending the money exclusively on services. Thus, consumption advice should shift to promoting holistic sustainable lifestyle changes.