Street green space and electricity demand: Evidence from metered consumption data

Growing climate change impacts call for increased efforts to adapt and to reduce its adverse consequences on society. Adaptation responses can themselves be a source of climate risk, generating negative environmental externalities while entailing budgetary costs for both governments and private citizens. A key example is the private use of air-conditioning for indoor air temperature regulation in the face of rising urban heat. In this paper, we empirically evaluate the impact of street green spaces (SGS) on residential electricity demand through their urban temperature regulation effect. We exploit a monthly panel of household metered electricity demand data from 129,524 households located in 2181 municipalities distributed across Italy, in the period between 2020 and 2022. We find evidence of a significant non-linear mediating role of SGS on the impact of temperature on household electricity demand. The most salient effect is a reduction in electricity consumption when hot temperatures occur — lowering monthly average electricity consumption by up to 11%–25% (for monthly maximum temperatures of 30 and 35°C, respectively). The observed moderating effects of SGS are heterogeneous across municipalities, as they depend on contextual factors such as the degree of urbanization, baseline heat and SGS levels, and average income level. To dissipate across-municipality sorting concerns, we conduct propensity score weighting on a range of potentially confounding observables, and find our results remain consistent. We estimate that a policy increasing the average Green View Index (GVI) level across all municipalities to a value comparable to the median of the current distribution would reduce the growth in residential electricity consumption driven by climate change by more than two thirds (under Representative Concentration Pathway 8.5 climate conditions around 2050). This corresponds to a gross national-level private saving in energy bills of €150 million yearly in 2050. This is a noticeable benefit that represents about 7.3% of our estimated costs to implement such policy, and informs on a potentially substantial social and economic benefit of urban green spaces. Our results provide new quantitative evidence of the role of street green spaces for both energy demand reduction, and therefore climate change mitigation, and in terms of outdoor temperature reduction, supporting climate change adaptation.