1. Temperature Effects on Electricity and Gas Consumption: Empirical Evidence from Mexico and Projections under Future Climate Conditions
- Author
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Botzen, Wouter J.W., Nees, Tim, Estrada, Francisco, Economics of Global Environmental Change, UU LEG Research UUSE Multidisciplinary Economics, Environmental Economics, Economics of Global Environmental Change, and UU LEG Research UUSE Multidisciplinary Economics
- Subjects
Monitoring ,010504 meteorology & atmospheric sciences ,Natural resource economics ,020209 energy ,Geography, Planning and Development ,fixed effects panel data ,TJ807-830 ,02 engineering and technology ,Lp gas consumption ,Management, Monitoring, Policy and Law ,Energy transition ,Electricity consumption ,TD194-195 ,01 natural sciences ,Liquefied petroleum gas ,Renewable energy sources ,United Nations Framework Convention on Climate Change ,Fixed effects panel data ,SDG 13 - Climate Action ,0202 electrical engineering, electronic engineering, information engineering ,Per capita ,Economics ,GE1-350 ,Renewable Energy ,0105 earth and related environmental sciences ,Planning and Development ,SCI and SSCI Journals ,Consumption (economics) ,electricity consumption ,Geography ,Sustainability and the Environment ,Policy and Law ,Environmental effects of industries and plants ,Renewable Energy, Sustainability and the Environment ,business.industry ,Temperature ,temperature ,Energy consumption ,Management ,LP gas consumption ,Environmental sciences ,Electricity ,business ,Efficient energy use - Abstract
Fixed effects panel models are used to estimate how the electricity and gas consumption of various sectors and residents relate to temperature in Mexico, while controlling for the effects of income, manufacturing output per capita, electricity and gas prices and household size. We find non-linear relationships between energy consumption and temperature, which are heterogeneous per state. Electricity consumption increases with temperature, and this effect is stronger in warm states. Liquified petroleum gas consumption declines with temperature, and this effect is slightly stronger in cold states. Extrapolations of electricity and gas consumption under a high warming scenario reveal that electricity consumption by the end of the century for Mexico increases by 12%, while gas consumption declines with 10%, resulting in substantial net economic costs of 43 billion pesos per year. The increase in net energy consumption implies greater efforts to comply with the mitigation commitments of Mexico and requires a much faster energy transition and substantial improvements in energy efficiency. The results suggest that challenges posed by climate change also provide important opportunities for advancing social sustainability goals and the 2030 Agenda for Sustainable Development. This study is part of Mexico&rsquo, s Sixth National Communication to the United Nations Framework Convention on Climate Change.
- Published
- 2021
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