Modeling Climate Feedbacks to Energy Demand: The Case of China

Abstract

This paper is an empirical investigation of the effects of climate on the use of electricity by consumers and producers in urban and rural areas within China. It takes advantage of an unusual combination of temporal and regional data sets in order to estimate temperature, as well as price and income elasticities of electricity demand. The estimated positive temperature/electric power feedback implies a continually increasing use of energy to produce electric power which, in China, is primarily based on coal. In the absence of countervailing measures, this will contribute to increased emissions, increased atmospheric concentrations of greenhouse gases, and increases in greenhouse warming.