The Impact of Air Conditioning on Residential Electricity Consumption Across World Countries

This paper provides the first global assessment of the energy implications of households' climate change adaptation through air-conditioning. We pool household survey data from 25 countries and employ a discrete-continuous choice econometric framework to simultaneously estimate the adoption and utilisation of air-conditioning. After identifying how individual drivers determine households' adaptation behaviours, we combine the estimated responses with socioeconomic, demographic, and, climate change scenarios available at a high spatial resolution to project future air-conditioning adoption and electricity demand, as well as the contribution of individual determinants. On average, we find that air-conditioning ownership increases households' electricity consumption by 37%, but the effect is highly heterogeneous, and it varies with weather conditions, income levels and across countries, revealing the importance of behaviors, practices, climate, and technologies. Compared to other socioeconomic, demographic, and climatic drivers of electricity demand, air-conditioning has the leading marginal effect, and it can account for a significant share of households' budget. We then show that, especially in developing and emerging countries, age, education, and urbanisation reinforce the positive, long-term effect of income and high temperatures on air-conditioning adoption and electricity demand for space cooling. The overall effect of socio-demographic, economic, and climatic drivers is a net increase in regional and global air-conditioning electricity by 2050. Electricity expenditure for air-conditioning is an important benchmark for tracking a new dimension of energy poverty related to the need of space cooling and our projections points at a new, emerging risk associated with this form of households' adaptation.