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The Impact of Temperature Changes on Residential Energy Use

Author

Listed:
  • Richard S. J. Tol

    (Department of Economics, University of Sussex, UK
    Institute for Environmental Studies, Vrije Universiteit, Amsterdam, Netherlands
    Department of Spatial Economics, Vrije Universiteit, Amsterdam, Netherlands)

  • Sebastian Petrick

    (Kiel Institute for the World Economy)

  • Katrin Rehdanz

    (Kiel Institute for the World Economy
    Department of Economics, Christian-Albrechts-University Kiel, Germany)

Abstract
In order to explore the impact of climate change on energy use, we estimate an energy demand model that is driven by temperature, prices and income. The estimation is based on an unbalanced panel of 62 countries over three decades. We limit the analysis to the residential sector and distinguish four different fuel types (coal, electricity, natural gas and oil). Compared to previous papers, we have a better geographical coverage and consider both a heating and cooling threshold as well as further non-linearities in the impact of temperature on energy demand and temperature-income interactions. We find that oil, gas and electricity use are driven by a non-linear heating effect: Energy use decreases with rising temperatures due to a reduced demand for energy for heating purposes, but the speed of that decrease declines with rising temperature levels. We cannot find a significant impact of temperature on the demand for cooling energy.

Suggested Citation

  • Richard S. J. Tol & Sebastian Petrick & Katrin Rehdanz, 2012. "The Impact of Temperature Changes on Residential Energy Use," Working Paper Series 4412, Department of Economics, University of Sussex Business School.
    • Handle: RePEc:sus:susewp:4412
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    File URL: http://www.sussex.ac.uk/economics/documents/wps-44-2012.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Maryse Labriet & Santosh Joshi & Marc Vielle & Philip Holden & Neil Edwards & Amit Kanudia & Richard Loulou & Frédéric Babonneau, 2015. "Worldwide impacts of climate change on energy for heating and cooling," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1111-1136, October.
    2. Chen, Han & Huang, Ye & Shen, Huizhong & Chen, Yilin & Ru, Muye & Chen, Yuanchen & Lin, Nan & Su, Shu & Zhuo, Shaojie & Zhong, Qirui & Wang, Xilong & Liu, Junfeng & Li, Bengang & Tao, Shu, 2016. "Modeling temporal variations in global residential energy consumption and pollutant emissions," Applied Energy, Elsevier, vol. 184(C), pages 820-829.
    3. Harold, Jason & Lyons, Seán & Cullinan, John, 2015. "The determinants of residential gas demand in Ireland," Energy Economics, Elsevier, vol. 51(C), pages 475-483.
    4. Altvater, Susanne & de Block, Debora & Bouwma, Irene & Dworak, Thomas & Frelih-Larsen, Ana & Görlach, Benjamin & Hermeling, Claudia & Klostermann, Judith & König, Martin & Leitner, Markus & Marinova, , 2012. "Adaptation measures in the EU: Policies, costs, and economic assessment. "Climate Proofing" of key EU policies," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 110558, June.
    5. Desiderio Romero-Jordán & Pablo del Río & Cristina Peñasco, 2014. "Household electricity demand in Spanish regions. Public policy implications," Working Papers 2014/24, Institut d'Economia de Barcelona (IEB).
    6. Silvana Mima & Patrick Criqui, 2015. "The Costs of Climate Change for the European Energy System, an Assessment with the POLES Model," Post-Print hal-01149610, HAL.
    7. Desiderio Romero-Jordán & Pablo del Río & Cristina Peñasco, 2014. "Household electricity demand in Spanish regions. Public policy implications," Working Papers 2014/24, Institut d'Economia de Barcelona (IEB).
    8. Huang, Yongfu, 2014. "Drivers of rising global energy demand: The importance of spatial lag and error dependence," Energy, Elsevier, vol. 76(C), pages 254-263.
    9. Matthew Ranson & Lauren Morris & Alex Kats-Rubin, 2014. "Climate Change and Space Heating Energy Demand: A Review of the Literature," NCEE Working Paper Series 201407, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Dec 2014.
    10. Bardazzi, Rossella & Pazienza, Maria Grazia, 2017. "Switch off the light, please! Energy use, aging population and consumption habits," Energy Economics, Elsevier, vol. 65(C), pages 161-171.

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    More about this item

    Keywords

    Climate change; energy demand; heating and cooling effect; temperature;
    All these keywords.

    JEL classification:

    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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