Analysis of Energy Consumption Patterns and Climate Effects Using Panel Data

Abstract

This paper investigates energy consumption patterns using panel data of final energy consumption and economic variables from 1970 to 2010 for more than 100 countries and regions. Although previous economic studies address the role of economic development and income as determinant factors of energy consumption, we examine how physical factors such as climate affects energy consumption level and patterns. By integrating economic and engineering approaches, we demonstrate statistical analyses showing that climate determines not only energy consumption levels, but also the relationship between energy consumption and income levels over time. While climate affects energy consumption patterns, our results suggest that energy technology and price policy are significant in determining whether a country can decouple energy consumption from economic growth.