The Impact of Temperature Changes on Residential Energy Use

Richard Tol, Sebastian Petrick and Katrin Rehdanz

Working Paper Series from Department of Economics, University of Sussex Business School

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.

Keywords: Climate change; energy demand; heating and cooling effect; temperature (search for similar items in EconPapers)
JEL-codes: Q41 Q43 (search for similar items in EconPapers)
Date: 2012-11
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:sus:susewp:4412

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