The impact of air conditioning on residential electricity consumption across world countries

Abstract

We provide a first globally-relevant assessment of the electricity consumption consequences of households’ adaptation to ambient heat through air conditioning (AC). We use household survey data from 25 countries within a discrete-continuous choice empirical framework to model households’ joint air conditioning adoption and utilization decisions, and combine the estimated responses with scenarios of socioeconomic, demographic, and climatic change to project air conditioning prevalence and cooling electricity demand circa mid-century. We find that air conditioning ownership increases households’ electricity consumption by 36%, on average, but the effect is heterogeneous, varying with weather conditions, income and country contexts, revealing the importance of behaviors, practices, climate, and technologies. Compared to the other drivers of electricity consumption, air conditioning has the leading marginal effect, also accounting for a significant share of household budgets. By 2050, the overall effect is a net increase in global yearly residential cooling electricity to 976–1393 TWh, with an additional 670–956 Mt of CO${}_2$ emissions, and associated social costs of $124–177 billion. Our findings highlight cooling energy expenditure as an emerging indicator of energy poverty as the climate warms, and provide an initial quantification of the economic and environmental risks associated with air conditioning as an adaptation to climate change.