Climate Change Economics

Using individual-level happiness data in Chinese General Social Survey (CGSS) and county-level temperature data, this study analyzes the impact of extreme high temperature on happiness. Results show that extreme heat reduces individuals’ happiness. Specifically, each additional day spent experiencing extreme temperatures resulted in a 0.005 unit decrease in happiness. Results remained robust after modifying the model specification and variable measures. Further analysis shows that extreme heat more strongly affects the low-income and nonair-conditioned groups. Results of the mechanism analysis showed that extreme high temperature mainly affects the individual’s happiness by reducing the individual’s income and health. Thus, the effects of extreme heat on happiness are gradually amplified, in turn exacerbating environmental inequality. This study analyzes the negative impact of climate change from the perspective of social welfare and reveals the internal mechanism of environmental inequality, thus providing a reference for policy formulation.

Global fossil energy consumption is a significant source of carbon dioxide emissions and a major cause of global climate change. Heat consumption in the residential sector is an important part of this consumption. Based on reinforcement theory, this study analyzed the influence mechanism of information feedback on the residents’ energy-saving behaviors and applied the survey data from 1248 households in three Western European countries to analyze the impact of heat consumption information feedback on four typical heat-saving behaviors of residents. Finally, it applied the probit model to measure the quantitative effect of information feedback on the heat-saving behavior. Four heat-saving behaviors were considered: “improving house insulation”, “setting the thermostat to 20°C or below”, “turning the heat down at night” and “closing the windows when the heating is running”. The empirical results showed that heat consumption information feedback has a significant impact on residents’ heat-saving behavior. After adding the controlling variables, such as demographic variables, willingness to pay for greenness, environmental concern and environmental belief, the estimated results changed slightly, but the estimates of the study are still significant. According to the estimates, residents who can obtain the heat consumption information feedback timely were 9.3%, 5.2%, 5.9% and 4.3% more likely than residents who can’t obtain the heat consumption information feedback timely to adopt the heat-saving behaviors of “improving house insulation”, “setting the thermostat to 20°C or below”, “turning the heat down at night” and “closing the windows when the heating is running”.

As an important measure for households’ adaptation to climate change, air conditioning is becoming more and more prevailing in developing countries, which implies a larger demand for electricity and highlights the role of energy-efficient air conditioners (ACs) in energy saving. Using household-level data from China, this paper investigates the determinants of households’ adoption of energy-efficient ACs, with a focus on the role of the split-incentive (principal-agent) problem between homeowners and renters in the adoption of energy-efficient ACs. The results show that the principal-agent (PA) problem does exist in the adoption of energy-efficient ACs in Chinese households, with renter-occupied dwellings being about 10.2% more likely to have low energy-efficient ACs installed in dwellings, compared to homeowner-occupied dwellings. Moreover, the increased energy consumption and carbon emissions due to the PA problem in AC investment are calculated based on the estimated agency effect.

Increased extreme heat is one of the clearest manifestations of climate change, but its impact on household consumption is poorly understood. This paper estimates the effects of high temperatures on total household consumption. We find an inverted U-shaped relationship, with high temperatures (≥ 30^∘C) reducing total household consumption by 7.18% compared with the reference group from 5^∘C to 10^∘C. In the living consumption subcategory, expenditures for eating out decline by 9.59%, whereas expenditures for protective gear, fuel, and housing increase. Expenditures in the going-out category generally decrease but vary with distance, vehicles, and sites. Spending on all types of public transportation and outdoor recreation decreases regardless of distance, whereas private transportation and short-distance indoor recreation expenditures increase slightly. Our findings indicate that households alleviate high-temperature impacts mainly by reducing expenditures outside the home and increasing expenditures on at-home or indoor activities.

The aim of this study is to assess the impacts of woodfuel prices distortion on the eco-efficiency of woodfuel exploitation systems. The study, conducted in Cameroon, involved 415 randomly selected woodfuel operators. To achieve this, the marginal opportunity cost approach and the stochastic specification of the production technology were used to assess the price distortion degree and the eco-efficiency indices, respectively. In doing so, the 2SLS allowed to evaluate the impacts of woodfuel prices distortion on eco-efficiency of woodfuel exploitation systems. From this study, we conclude that the woodfuel prices distortion does not encourage eco-efficient exploitation of this resource. A 1% increase in the degree of distortion results in a reduction in eco-efficiency of −0.019 points. Including the optimal price in the woodfuel pricing system will improve eco-efficiency by 0.030 points. In view of these results, a marginal opportunity cost pricing system that takes into account all the exploitation costs ignored by the market price like user costs associated with resource depletion and the external costs associated with CO₂ emissions will encourage producers to adopt a sustainable woodfuel exploitation path.

Based on the micro-data of China’s Urban Household Survey, this paper investigates the impact of climate change on household electricity consumption inequality by using a two-way fixed effect model. The result reveals that households are more likely to purchase air conditioning (AC) and consume more electricity in response to extreme weather shocks. Furthermore, it is observed that high-income households are better equipped to mitigate the negative effects of extreme weather, as they possess a larger proportion of AC units and are more likely to acquire new ones to cope with extremely high temperatures. Finally, the study finds that extreme weather shocks exacerbate inequality in household electricity consumption.

The effect of income and extreme temperatures on the residential electricity consumption in Spain is analyzed. An electricity demand function is estimated by means of ordinary least squares-Driscoll and Kraay, feasible generalized least squares, and quantiles panel data techniques, for the total of the sample, and by coastal climatic zones. The results support the energy-environmental Kuznets curve hypothesis for Spain, the continental, and Mediterranean zones. An N form is found for the Atlantic zone. The results also reflect that increases in temperature above 22^∘C and decreases below 15^∘C increase electricity consumption, this increase being progressive as temperatures vary. Thus, extreme temperature generates electricity consumption growth. The Mediterranean zone is most sensitive to these temperature changes. The results also show that electricity consumption is more sensitive to cold than to heat. The results suggest an inefficient use of heating and cooling appliances in the areas with the highest electricity consumption.

The adoption of air conditioning (AC) could grow exponentially across Africa under the joint effect of acute warming, sustained income growth, and rapid urbanization. The implications for greenhouse gas emissions will crucially depend on the energy efficiency of the models adopted. Little is known, however, about how energy efficiency information is conveyed to consumers in these markets. To fill this gap, we gathered data on cooling appliances characteristics from Africa’s largest e-commerce platform, serving 13 countries — Algeria, Cameroon, Côte d'Ivoire, Egypt, Ghana, Kenya, Morocco, Nigeria, Senegal, South Africa, Tanzania, Tunisia, and Uganda. We find that less than 10% of the AC models available on the marketplace (N = 1229) have information disclosed about their energy performance. Information disclosure appears to be highly idiosyncratic with weak strategic motives. This overall lack of information about energy efficiency represents an important challenge for enforcing energy performance standards and steering demand toward energy-efficient cooling appliances.

The impacts of global warming vary across regions. This paper studies the distributional implications of global warming impacts on household energy use for heating and cooling and the induced macroeconomic responses under different scenarios. Our research updates the direct impact of global warming on household energy demand in 140 regions worldwide by utilizing existing estimations of damage functions related to temperature changes. Subsequently, the updated direct impact is used in a global static computable general equilibrium (CGE) model to evaluate the macroeconomic responses. We find that at the global level, the market effects cause a reduction in the direct impact on the demand for oil and gas, while that for electricity displays a positive but moderate growth. Whereas the regional effects vary across countries and lead to changes in both directions, in which the autonomous adaptation embodied in the global market plays a vital role. Furthermore, we find strong inequality in the socioeconomic responses to global warming across regions. Notably, low-income countries are most strongly affected by increased primary energy use and decreased gross domestic product (GDP). Disparities in the impacts on carbon-based energy sources yield a near-perfect inequality as per the adjusted Gini index for CO₂ emission changes, which potentially intensify the distributional consequences of global climate change.

Given ever-increasing temperatures, household air conditioner (AC) usage is increasing rapidly, posing significant sustainability challenges. Identifying the drivers of residential demand is critical, especially in developing countries such as China. In contrast to assumptions made by the existing literature, intergenerational parenting and multigenerational households are widespread in China. To address this oversight, this study is the first to use data from an appliance-level, 15-min AC operation database from southern China to quantify the impact of intergenerational parenting families on cooling-related electricity consumption and examine its mechanisms. First, intergenerational parenting significantly positively impacts such consumption. Compared to working-age households, Intergenerational households consume 49% more electricity for cooling, and families with children consume 28% more. In contrast, families with older adults but no children use 6% less electricity for cooling than working-age families. Second, intergenerational families use the AC for 0.5 additional hours per day, set the temperature 0.9°C lower, and keep the AC idle longer than working-age households. Third, intergenerational parenting’s impact shows an M-shaped pattern throughout the day (peaking at 9:00 and 17:00). Fourth, working-age adults significantly moderate the impact of intergenerational parenting on electricity demand.