Does urbanization lead to less residential energy consumption? A comparative study of 136 countries

Abstract

The impact of urbanization on residential energy consumption is insufficiently understood. By employing a panel dataset of 136 countries during 1990–2015, this study examines the influence of urbanization on residential energy use worldwide, and how the magnitudes of influence vary across regions by taking into account regional heterogeneity and stages of urbanization. Our findings indicate that the impact of urbanization on residential energy consumption tends to vary greatly across regions in different urbanization stages. Most countries in Sub-Saharan Africa are at the acceleration stage of urbanization characterized by rapid population migration to urban areas without the corresponding economic growth. This feature of urbanization leads to a decrease in aggregate consumption. In contrast, the urbanization in developing regions in Asia and the Middle East & North Africa, which has been accompanied by booming economies, can increase aggregate residential energy consumption. Surprisingly, for highly urbanized regions, including the developed regions of the world, Latin America & the Caribbean, and the developing regions in Europe & Central Asia, the urbanzation impact seemingly becomes nonsignificant because of the narrow gap between urban and rural energy use in the residential sector. Based on these findings, we make four key policy suggections, including evaluating fiscal sustainability of household energy transition programs on a cost-benefit basis, developing a suite of customized options for household energy use and orderly transition process, encouraging bottom-up initiatives for adopting clean energy in residential sector, and sharing a public monitoring and planning platform.