The impact of G7 countries‘ consumption of goods and services on CO2 emissions.

Climate change is a major issue, with CO2 emissions accounting for a fraction of greenhouse gases. The US, Canada, Japan, and other G7 countries have the highest per capita consumption, so their contribution to consumption-based CO2 emissions in these countries must be given a lot of attention. Despite some improvement in the warming outlook since the Paris Agreement, the main problem is that, despite promises of net zero emissions, insufficient action will be taken to reach the 1.5°C temperature limit. Achieving this goal requires a change in current trajectories. The object of the work is the CO2 emission assessment of the goods and services of the G7 countries. The aim of the study is to assess the impact of G7 countries' goods and services on CO2 emissions. The work consists of four main parts. The first part covers the issues analysed related to CO2 emissions arising from the consumption patterns of the G7 countries. The second part of the work covers the theoretical aspects of assessing the impact of countries' consumption on CO2 emissions. The third part covers the research methodology. The fourth part includes a case study conducted to determine how the consumption of goods and services in G7 countries affects their CO2 emissions. The literature analysis examines economic factors, political, technological, and social factors, and CO2 emissions. Changes in consumption have been identified as the main driver of growth in global CO2 emissions. The analysis of the literature carried out in the work identified the essential factors of consumption per capita of GDP, consumption of renewable energy, level of globalization, urbanization, and education, the share of the working-age population, average salary, and the number of personal vehicles. While studies have adopted a production perspective that assesses the local CO2 emissions of product choices, a growing number of academic authors agree that it is important to consider a consumption perspective. This approach provides a more accurate estimate of G7 demand emissions and includes the issue of CO2 leakage, including emissions from abroad, air, transport, and all goods consumed, taking into account where they are produced. Although politically challenging, a consumption-based analytical approach provides a better understanding of the costs of production and trade relations between countries. This is necessary to ensure that emission reduction targets and policies are as effective and efficient as possible. Influence of G7 consumption factors on CO2 emissions This methodology analyses the short-term and long-term effects of macroeconomic indicators on the amount of consumption-based CO2 emissions. A sequence of assessments of the relationship between research consumption factors and consumption-based CO2 emissions, including assessments of stationarity, causality, cointegration, and effects, and interpretation of values. The use of economic models and the described methods is essential to understanding and reducing the impact of G7 consumption on consumption-based CO2 emissions. The models examined, except for the GDP per capita model, show the relationship between the independent variables and the amount of consumption-based CO2 emissions in the G7 countries. Increasing renewable energy consumption and urbanisation are leading to a reduction in consumption-based CO2 emissions in both the short and long term. However, an increase in the number of private cars per 1,000 inhabitants leads to an increase in consumption-based CO2 emissions in the short term, with a negligible impact in the long term. The study shows that policies aimed at reducing the number of private cars on the road, urbanization, and increasing the use of renewable energy can play a role in reducing consumption-based CO2 emissions in the G7 countries. However, current policies focus on achieving policy outcomes rather than implementing the necessary actions. Countries can use low-CO2 modes of transport, such as cycling and public transport, to reduce emissions from goods and services while managing urbanization. A CO2 tax can be an effective policy tool to reduce CO2 emissions by taxing the carbon dioxide content of fossil fuels, but it may face political obstacles and opposition from the renewable energy sector. Addressing these challenges requires a fair and efficient price for CO2, with appropriate exemptions for vulnerable demographic groups and sectors, and the development of more effective policies to reduce CO2 emissions.

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