Technology Adoption as Climate Adaptation:

Evidence from US Air Conditioning

 

Erin T. Mansur and Ian Sue Wing


Working Paper, November 2019.

Abstract:

 

We investigate the impact of temperature on households adoption of air conditioning (AC) and the joint effects of temperature and AC penetration on residential electricity demand, using microdata on 2.6 million households in 253 cities from the 1970 and 1980 US Census waves. Recent climate (cities’ average cooling degree days over the decade prior to its observation) is predictive of adoption while weather (cities’ contemporaneous cooling degree days) drives energy use, and the electricity consumption response is more elastic for households that have adopted AC. Applying our empirical model to observed changes in temperature since 1980, we find that climate change has accounted for approximately one third of the observed growth in AC penetration. We predict that the much larger increases in temperature anticipated by the end of this century will drive substantial increases in AC adoption in Western US cities, and conditional amplification of electricity use for cooling nationwide.