• Imports and use of air conditioning are rising in many countries.
  • Households spend as much as 42% more on electricity when they own air conditioners.
  • Air conditioning can drive low-income households into energy poverty.

The effects of climate change may more far-reaching than you think.

Hotter temperatures have been linked to a rise in energy poverty, with more people struggling to meet their energy bills from their household income, according to a new study published on ScienceDirect by researchers from Italy’s Ca' Foscari University.

The analysis looks at eight countries – Australia, Canada, France, Japan, the Netherlands, Spain, Sweden, and Switzerland – and investigates how households respond to excess heat. They have found an uptick on the purchasing and use of air conditioners, which has led to a greater consumption of electricity, and a greater proportion of income being spent on energy.

Air conditioning and electricity expenditure: The role of climate in temperate countries
Value of air conditioning imports in selected OECD countries.
Image: ScienceDirect

Households spend between 35% and 42% more on electricity when they adopt air conditioning, the study says.

As temperatures increase around the world, cooling is emerging as a new, basic need – even in countries that traditionally have not previously required such appliances.

What’s the World Economic Forum doing about climate change?

Climate change poses an urgent threat demanding decisive action. Communities around the world are already experiencing increased climate impacts, from droughts to floods to rising seas. The World Economic Forum's Global Risks Report continues to rank these environmental threats at the top of the list.

To limit global temperature rise to well below 2°C and as close as possible to 1.5°C above pre-industrial levels, it is essential that businesses, policy-makers, and civil society advance comprehensive near- and long-term climate actions in line with the goals of the Paris Agreement on climate change.

The World Economic Forum's Climate Initiative supports the scaling and acceleration of global climate action through public and private-sector collaboration. The Initiative works across several workstreams to develop and implement inclusive and ambitious solutions.

This includes the Alliance of CEO Climate Leaders, a global network of business leaders from various industries developing cost-effective solutions to transitioning to a low-carbon, climate-resilient economy. CEOs use their position and influence with policy-makers and corporate partners to accelerate the transition and realize the economic benefits of delivering a safer climate.

Contact us to get involved.

That puts an additional burden on families who might not be able to afford the most efficient appliances and could result in spending being diverted away from food or education towards cooling, the researchers write.

“Climate change and the growing demand for air conditioning are likely to exacerbate energy poverty,” the study says. “The number of energy poor who spend a high share of income on electricity increases, and households in the lowest income” groups are the most negatively affected.

Energy poverty is an issue that goes beyond air conditioning, with 800 million people lacking access to electricity and many more struggling with an erratic and limited service.

The ‘golden thread’

The Global Commission to End Energy Poverty calls access to energy the “golden thread” that weaves together economic growth, human development, and environmental sustainability. And one of the United Nations’ Sustainable Development Goals is to ensure access to affordable, reliable, sustainable and modern energy for all by 2030.

Sustainability also has a large role to play in the future of energy and failing to embed green policies in COVID-19 stimulus packages and underinvesting in green infrastructure are current risks, according to the World Economic Forum.

In its vision for a 'Great Reset' – building a better world after the pandemic – the Forum and the IMF jointly backed the transition to a green economy and called for an end to fossil fuel subsidies.