Diverse Effects of Consumer Credit on Household Carbon Emissions at Quantiles: Evidence from Urban China

This paper surveys the diverse effects of consumer credit on household carbon emissions (HCEs) based on consumption patterns revealed by urban Chinese survey data. Based on the foundation of existing literature, consumption patterns and influential factors are carefully chosen to build empirical models that apply Heteroscedasticity-consistent covariance matrix estimation and quantile regression. The study finds that short-term consumer credit and credit card limits (representing daily consumption) have effects on HCEs at all quantiles, but mortgages (representing long-term consumer credit) only have effects at high quantiles. Consumption categories have distinct effects on HCEs at different quantiles. The effects of mortgages on HCEs occur mainly through the consumption of housing and facilities as well as through the consumption of medical care and transportation, while the effects of short-term consumer credit and credit card limits on HCEs occur through almost all consumption categories. These findings contribute to knowledge of the determinants of HCEs and provide a theoretical basis for consumer financial mechanisms to cut HCEs.