Adaptive responses: the effects of temperature levels on residential electricity use in China

Rising temperatures are likely to boost residential demand for electricity in warm locations for reasons including increased use of air conditioners, fans, and refrigeration. Yet precise effects may vary by geographical area and with socio-economic conditions. Knowledge on these effects in developing countries is limited due to data availability and reliability issues. Using a high-quality provincial-level monthly dataset for China and fixed-effect panel methods, we find a U-shaped and asymmetrical relationship between ambient temperature and monthly residential electricity use. An additional day with a maximum temperature exceeding 34 degrees C is on average associated with a 1.6% increase in that month's per capita residential electricity use relative to if that day's maximum temperature had been in the 22-26 degrees C range. The effect of an additional cold day is smaller. There are differences in effects for the south versus the north of China and for urban versus rural areas. Under a high global carbon dioxide emission trajectory, we estimate that expected temperature increases would lead to more than a 25% increase in residential electricity use in July in some provinces by the end of the century, holding other factors constant.