Quantifying the Economic Impact of Changes in Energy Demand for Space Heating and Cooling Systems Under Varying Climatic Scenarios

8 Pages Posted: 18 May 2016

See all articles by Tomoko Hasegawa

Tomoko Hasegawa

National Institute for Environmental Studies

Chan Park

University of Seoul - Department of Landscape Architecture

Shinichiro Fujimori

National Institute for Environmental Studies

Kiyoshi Takahashi

National Institute for Environmental Studies

Yasuaki Hijioka

National Institute for Environmental Studies

Toshihiko Masui

National Institute for Environmental Studies

Date Written: May 2016

Abstract

The building sector is highly sensitive to climate change, where energy is used for numerous purposes such as heating, cooling, cooking and lighting. Space heating and cooling account for a large proportion of overall energy use, and the associated energy demand is also affected by climate change. Here, we project the economic impact of changes in energy demand for space heating and cooling under multiple climatic conditions. We use an economic model coupled with an end-use technology model to explicitly represent the investment costs for air-conditioning technologies, which influence the macroeconomy. We conclude that the negative effects on the economy from increases in the use of space cooling are sufficiently large to neutralize the positive impacts from reductions in space heating usage under climate change, which results in significant economic loss. The economic loss under the highest emissions scenario (RCP8.5) would correspond to a −0.34% (−0.39% to −0.18%) change in global gross domestic product (GDP) in 2100 compared with GDP without any climate change, while the impact under the lowest emissions scenario (RCP2.6) would result in a −0.03% (−0.07% to −0.01%) change in global GDP in 2100. The economic losses are mainly generated by incremental technological costs and not by changes in energy demand itself. The amount of economic loss can vary substantially based on assumptions of technological costs, population and income. To reduce the negative impacts of climate change measures for reducing the costs of air conditioning will be an important consideration for the building sector in the future.

Suggested Citation

Hasegawa, Tomoko and Park, Chan and Fujimori, Shinichiro and Takahashi, Kiyoshi and Hijioka, Yasuaki and Masui, Toshihiko, Quantifying the Economic Impact of Changes in Energy Demand for Space Heating and Cooling Systems Under Varying Climatic Scenarios (May 2016). Palgrave Communications, Vol. 2, 2016, Available at SSRN: https://ssrn.com/abstract=2781491 or http://dx.doi.org/10.1057/palcomms.2016.13

Tomoko Hasegawa (Contact Author)

National Institute for Environmental Studies ( email )

16-2 Onogawa
Tsukuba, Ibaraki 305-8506
Japan

Chan Park

University of Seoul - Department of Landscape Architecture ( email )

Seoul
Korea, Republic of (South Korea)

Shinichiro Fujimori

National Institute for Environmental Studies ( email )

16-2 Onogawa
Tsukuba, Ibaraki 305-8506
Japan

Kiyoshi Takahashi

National Institute for Environmental Studies ( email )

16-2 Onogawa
Tsukuba, Ibaraki 305-8506
Japan

Yasuaki Hijioka

National Institute for Environmental Studies

16-2 Onogawa
Tsukuba, Ibaraki 305-8506
Japan

Toshihiko Masui

National Institute for Environmental Studies ( email )

16-2 Onogawa
Tsukuba, Ibaraki 305-8506
Japan

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