Air-Conditioning Adoption and Electricity Demand Highlight Climate Change Mitigation–Adaptation Tradeoffs
Air conditioning (AC) is a mature and widely available technology that uses electricity to maintain comfortable indoor environments despite ambient high temperatures. AC adoption is high in the United States and is increasing worldwide. Given projected future growth in cooling demand and AC ownership worldwide, climate change-driven increases in ambient temperatures will amplify future cooling demand, and attendant consumption of electric power. A major concern is that such adaptation can potentially exacerbate the difficulty and cost of mitigating greenhouse gas (GHG) emissions by increasing the demand for fossil fuels necessary to generate the additional electricity needed for cooling. We highlight this mitigation-adaptation tradeoff by empirically modeling the coupled adoption of residential air-conditioning (AC) and use of electricity across relatively richer, but cooler, European countries, and relatively poorer and hotter Indian states.
Rising ambient temperatures and income drive both adoption of residential AC, as well as AC utilization (electricity demand) conditional on the level of air conditioner penetration. The adaptation benefits are substantial offsets to rising population heat exposures due to climate warming circa 2050, which are concentrated the hottest areas of Europe and India. The costs are amplification of summer peak demands of up to 20-30% in southern Europe and 35% in northwest India, resulting in the need for increased generation and transmission capacity. As well, cooling adaptation induces power sector GHG emissions growth of 2% in Europe and 15% in India. Mitigating these increases would require reductions in the electricity intensity of GDP of 2% in Europe, but 9% India, or more stringent GHG abatement targets that increase carbon prices by 5-30%.
We elucidate mid-century climate change impacts on electricity demand accounting for endogenous adoption of residential air-conditioning (AC) in affluent, cooler countries in Europe, and in poorer, hotter states in India. By 2050, in a high-warming scenario (SSP585) AC prevalence grows twofold in Europe and fourfold in India, reaching around 40% in both regions. We document a mitigation-adaptation tradeoff: AC expansion reduces daily heat exposures by 150 million and 3.8 billion person degree-days (PDDs), but increases annual electricity demand by 34 TWh and 168 TWh in Europe and India, respectively (corresponding to 2% and 15% of today’s consumption). The increase in adoption and use of AC would result in an additional 130 MMTCO2, of which 120 MMTCO2 in India alone, if the additional electricity generated were produced with today’s power mix. The tradeoff varies geographically and across income groups: a one PDD reduction in heat exposure in Europe versus India necessitates five times more electricity (0.53 kWh vs 0.1 kWh) and two times more emissions (0.16 kgCO2 vs 0.09 kgCO2), on average. The decomposition of demand drivers offers important insights on how such tradeoff can be moderated through policies promoting technology-based and behavioral-based adaptation strategies.