Energy Demand and Temperature: A Dynamic Panel Analysis

31 Pages Posted: 15 Sep 2006

See all articles by Andrea Bigano

Andrea Bigano

RFF-CMCC European Institute on Economics and the Environment; CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici; Ca' Foscari University of Venice

Francesco Bosello

University of Milan - Department of Economics, Business and Statistics; CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

Giuseppe Marano

Fondazione Eni Enrico Mattei

Date Written: September 2006

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.

Keywords: Energy Demand, Temperature, Dynamic Panels

JEL Classification: C3, Q41, Q54

Suggested Citation

Bigano, Andrea and Bosello, Francesco and Marano, Giuseppe, Energy Demand and Temperature: A Dynamic Panel Analysis (September 2006). FEEM Working Paper No. 112.06, Available at SSRN: https://ssrn.com/abstract=928798 or http://dx.doi.org/10.2139/ssrn.928798

Andrea Bigano (Contact Author)

RFF-CMCC European Institute on Economics and the Environment ( email )

Via Bergognone, 34
Milan, 20144
Italy

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici ( email )

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Ca' Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Francesco Bosello

University of Milan - Department of Economics, Business and Statistics

Via Festa del Perdono, 7
Milan, 20122
Italy

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

via Augusto Imperatore, 16
Lecce, I-73100
Italy

Giuseppe Marano

Fondazione Eni Enrico Mattei ( email )

C.so Magenta 63
Milano, 20123
Italy

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