Temperature-Induced Residential Air Conditioning Adoption and Its Effect on Electricity Use in China

Air conditioning (AC) ownership has displayed notable growth in emerging markets. For electricity supply planning and other purposes, it is important to understand when and where AC adoption is expected. This paper constructs a household-level dataset based on a large-scale, multi-wave survey to examine how residential AC ownership responds to temperatures in China. We find that each additional annual cooling degree day is on average associated with a 0.09 percentage point higher AC ownership rate, all else equal. The effect is amplified at higher incomes and varies by climate zone. The effect for heating degree days is smaller. We calculate that changes in temperatures under the Shared Socioeconomic Pathway 2-4.5 scenario may contribute to a 150% or larger increase in residential summertime electricity use in some provinces of China by 2050 relative to 2015, in large part due to additional AC adoption. JEL Classification: D12-Consumer Economics: Empirical Analysis, Q47-Energy Forecasting, Q54-Climate; Natural Disasters and Their Management; Global Warming