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The Impact of Temperature Change on Energy Demand: A Dynamic Panel Analysis

Author

Listed:
  • Enrica De Cian

    (School of Advanced Studies in Venice and Fondazione Eni Enrico Mattei)

  • Elisa Lanzi

    (School of Advanced Studies in Venice and Fondazione Eni Enrico Mattei)

  • Roberto Roson

    (University Ca’ Foscari of Venice and Fondazione Eni Enrico Mattei)

Abstract

This paper presents an empirical study of energy demand, in which demand for a series of energy goods (Gas, Oil Products, Coal, Electricity) is expressed as a function of various factors, including temperature. Parameter values are estimated econometrically, using a dynamic panel data approach. Unlike previous studies in this field, the data sample has a global coverage, and special emphasis is given to the dynamic nature of demand, as well as to interactions between income levels and sensitivity to temperature variations. These features make the model results especially valuable in the analysis of climate change impacts. Results are interpreted in terms of derived demand for heating and cooling. Non-linearities and discontinuities emerge, making it necessary to distinguish between different countries, seasons, and energy sources. Short- and long-run temperature elasticities of demand are estimated.

Suggested Citation

  • 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.
  • Handle: RePEc:fem:femwpa:2007.46
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    Cited by:

    1. 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).
    2. Maryse Labriet & Santosh Joshi & Marc Vielle & Philip Holden & Neil Edwards & Amit Kanudia & Richard Loulou & Frédéric Babonneau, 2015. "Worldwide impacts of climate change on energy for heating and cooling," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 20(7), pages 1111-1136, October.
    3. Fikru, Mahelet G. & Gautier, Luis, 2015. "The impact of weather variation on energy consumption in residential houses," Applied Energy, Elsevier, pages 19-30.
    4. Dominique van der Mensbrugghe, 2010. "Climate Change and Economic Growth: Impacts and Interactions," Working Papers 2010_07, Department of Economics, University of Venice "Ca' Foscari".
    5. 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, pages 820-829.
    6. 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.
    7. repec:eee:energy:v:127:y:2017:i:c:p:534-543 is not listed on IDEAS
    8. Bosello, Francesco & Eboli, Fabio & Parrado, Ramiro & Nunes, Paulo A.L.D. & Ding, Helen & Rosa, Renato, 2011. "The economic assessment of changes in ecosystem services: and application of the CGE methodology," Economia Agraria y Recursos Naturales, Spanish Association of Agricultural Economists, vol. 11(1).
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    13. 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".
    14. Alex L. Marten, 2014. "The Role of Scenario Uncertainty in Estimating the Benefits of Carbon Mitigation," NCEE Working Paper Series 201404, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Mar 2014.
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    16. repec:dau:papers:123456789/8180 is not listed on IDEAS
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    18. -, 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).
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    20. Auffhammer, Maximilian & Mansur, Erin T., 2014. "Measuring climatic impacts on energy consumption: A review of the empirical literature," Energy Economics, Elsevier, vol. 46(C), pages 522-530.
    21. 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.
    22. Mideksa, Torben K. & Kallbekken, Steffen, 2010. "The impact of climate change on the electricity market: A review," Energy Policy, Elsevier, vol. 38(7), pages 3579-3585, July.
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    24. Martín, Ramón & Gomes, Charmaine & Alleyne, Dillon & Phillips, Willard, 2013. "An assessment of the economic and social impacts of climate change on the energy sector in the Caribbean," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38280, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

    More about this item

    Keywords

    Energy Demand; Cooling Heating Effect ; Temperature; Dynamic Panel;

    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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