Technology Adoption as Climate Adaptation: Evidence from US Air Conditioning Penetration

This paper examines the effect of temperature on households’ adoption of air conditioning. We use microdata from the 1970 and 1980 US Census to determine which factors predict the penetration of residential AC technology and electricity consumption. We find that recent changes in the distribution of temperature (namely, a city’s change in its decadal average cooling degree days) are predictive of adoption while contemporaneous temperatures drive energy use. The relationship between energy and cooling degree days is greater for households that have adopted AC. We apply these coefficients to the observed changes in temperature since 1980 and account for approximately one third of the observed growth in AC adoption. We also examine climate scenarios for various cities. For example, by the end of this century, Chicago’s climate is expected to be like that of El Paso in 1980. We predict this climatic effect would lead to an 60% increase in AC adoption and a doubling of electricity used for cooling.