Abstract
As global temperatures go up and incomes rise, air conditioner sales are poised to increase dramatically. Recent studies explore the potential economic and environmental impacts of this growth, but relatively little attention has been paid to the implications for inequality. In this paper we use household-level microdata from 16 countries to characterize empirically the relationship between climate, income, and residential air conditioning. We show that both current and future air conditioner usage is concentrated among high-income households. Not only do richer countries have much more air conditioning than poorer countries, but within countries adoption is highly concentrated among high-income households. The pattern of adoption is particularly stark in relatively low-income countries such as Pakistan, where we show that the vast majority of adoption between now and 2050 will be concentrated among the upper income tercile. We use our model to forecast future adoption, show how patterns vary across countries and income levels, and discuss what these patterns mean for health, productivity, and educational inequality.
Highlights
Sales of residential air conditioners have tripled since 1990 to almost 100 million units annually (International Energy Agency, 2018)
We compiled for this paper one of the most comprehensive household-level datasets ever assembled on air conditioning
Across all 16 countries our model predicts that the fraction of households with air conditioning will increase from 35% in 2020 to 55% in 2050
Summary
Sales of residential air conditioners have tripled since 1990 to almost 100 million units annually (International Energy Agency, 2018). We find a close relationship between household income and air conditioner adoption, with sharp increases in air con ditioning starting at annual household income of about $10,000 USD We combine this model with forecast income and climate levels to predict future adoption of air conditioning. Across all 16 countries our model predicts that the fraction of households with air conditioning will increase from 35% in 2020 to 55% in 2050 We find that both income and climate matter for these projections, but that in come matters much more, explaining 85% of the growth in air condi tioning by 2050. Our model predicts that the fraction of house holds with air conditioning in India will increase to 50% by 2050, but with pronounced differences in ownership rates between households with different income levels. Air conditioning is perhaps the single most consequential form of adaptation to climate change, and yet is unavailable to large parts of the global population
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