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Energy Demand and Temperature: A Dynamic Panel Analysis

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  • Bigano, Andrea
  • Bosello, Francesco
  • Marano, Giuseppe

Abstract

This paper is a first attempt to investigate the effect of climate on the demand for different energy vectors from different final users. The ultimate motivation for this is to arrive to a consistent evaluation of the impact of climate change on key consumption goods and primary factors such as energy vectors. This paper addresses these issues by means of a dynamic panel analysis of the demand for coal, gas, electricity, oil and oil products by residential, commercial and industrial users in OECD and (a few) non-OECD countries. It turns out that temperature has a very different influence on the demand of energy vectors as consumption goods and on their demand as primary factors. In general, residential demand responds negatively to temperature increases, while industrial demand is insensitive to temperature increases. As to the service sector, only electricity demand displays a mildly significant negative elasticity to temperature changes.

Suggested Citation

  • Bigano, Andrea & Bosello, Francesco & Marano, Giuseppe, 2006. "Energy Demand and Temperature: A Dynamic Panel Analysis," International Energy Markets Working Papers 12117, Fondazione Eni Enrico Mattei (FEEM).
  • Handle: RePEc:ags:feemie:12117
    DOI: 10.22004/ag.econ.12117
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. De Cian, Enrica & Wing, Ian Sue, 2016. "Global Energy Demand in a Warming Climate," EIA: Climate Change: Economic Impacts and Adaptation 232222, Fondazione Eni Enrico Mattei (FEEM).
    2. Enrica De Cian & Elisa Lanzi & Roberto Roson, 2007. "The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis," Working Papers 2007.46, Fondazione Eni Enrico Mattei.
    3. Bessec, Marie & Fouquau, Julien, 2008. "The non-linear link between electricity consumption and temperature in Europe: A threshold panel approach," Energy Economics, Elsevier, vol. 30(5), pages 2705-2721, September.
    4. Fazeli, Reza & Davidsdottir, Brynhildur & Hallgrimsson, Jonas Hlynur, 2016. "Residential energy demand for space heating in the Nordic countries: Accounting for interfuel substitution," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1210-1226.
    5. Thonipara, Anita & Runst, Petrik & Ochsner, Christian & Bizer, Kilian, 2019. "Energy efficiency of residential buildings in the European Union – An exploratory analysis of cross-country consumption patterns," Energy Policy, Elsevier, vol. 129(C), pages 1156-1167.
    6. Shardul Agrawala & Francesco Bosello & Carlo Carraro & Kelly De Bruin & Enrica De Cian & Rob Dellink & Elisa Lanzi, 2011. "Plan Or React? Analysis Of Adaptation Costs And Benefits Using Integrated Assessment Models," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 2(03), pages 175-208.
    7. Petrick, Sebastian & Rehdanz, Katrin & Tol, Richard S. J., 2010. "The impact of temperature changes on residential energy consumption," Kiel Working Papers 1618, Kiel Institute for the World Economy (IfW).
    8. repec:dau:papers:123456789/8180 is not listed on IDEAS
    9. Enrica De Cian & Elisa Lanzi & Roberto Roson, 2013. "Seasonal temperature variations and energy demand," Climatic Change, Springer, vol. 116(3), pages 805-825, February.
    10. Roberto Roson & Francesco Bosello & Enrica De Cian, 2007. "Climate Change, Energy Demand and Market Power in a General Equilibrium Model of the World Economy," Working Papers 2007_09, Department of Economics, University of Venice "Ca' Foscari".
    11. Atakhanova, Zauresh & Howie, Peter, 2007. "Electricity demand in Kazakhstan," Energy Policy, Elsevier, vol. 35(7), pages 3729-3743, July.
    12. Roberto Roson & Francesco Bosello, 2007. "Estimating a Climate Change Damage Function through General Equilibrium Modeling," Working Papers 2007_08, Department of Economics, University of Venice "Ca' Foscari".
    13. Richard S. J. Tol & Sebastian Petrick & Katrin Rehdanz, 2012. "The Impact of Temperature Changes on Residential Energy Use," Working Paper Series 4412, Department of Economics, University of Sussex Business School.
    14. Gunnar Eskeland & Torben Mideksa, 2010. "Electricity demand in a changing climate," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 15(8), pages 877-897, December.
    15. Chen, Han & Huang, Ye & Shen, Huizhong & Chen, Yilin & Ru, Muye & Chen, Yuanchen & Lin, Nan & Su, Shu & Zhuo, Shaojie & Zhong, Qirui & Wang, Xilong & Liu, Junfeng & Li, Bengang & Tao, Shu, 2016. "Modeling temporal variations in global residential energy consumption and pollutant emissions," Applied Energy, Elsevier, vol. 184(C), pages 820-829.
    16. -, 2011. "An assessment of the economic impact of climate change on the Energy Sector in Trinidad and Tobago," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38584, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    17. Atalla, Tarek N. & Hunt, Lester C., 2016. "Modelling residential electricity demand in the GCC countries," Energy Economics, Elsevier, vol. 59(C), pages 149-158.
    18. Stasinopoulos, Georgios, 2009. "Economic impacts of climate change on cities: A survey of the existing literature," HWWI Policy Papers 1-18, Hamburg Institute of International Economics (HWWI).
    19. Frontuto Vito, 2012. "Residential Energy Demand: a Multiple Discrete-Continuous Extreme Value Model using Italian Expenditure Data," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201203, University of Turin.

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    More about this item

    Keywords

    Resource /Energy Economics and Policy;

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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