The Effect of Temperature on Energy Demand and the Role of Adaptation

We examine the impact of daily temperatures on monthly energy demand for all major fuels (electricity, natural gas and petroleum products) across the United States economy. We find there are substantial heterogeneities in the estimated relationships by fuel type and by sector. We also provide evidence to suggest that adaptation to local climate has modified the electricity consumption effects of temperature in the residential and commercial sectors. Using our estimates to predict the effects that climate change has already had during 2010-2019, we find positive net impacts on energy consumption and expenditure for each sector, and annual carbon dioxide emissions have increased by at least 16 million metric tons. The predictions also suggest that adaptation has increased the net impacts of climate change on electricity use for cold states, but decreased the net impacts for hot states.