Reducing the Unequal Access to Cooling Energy: Evidence from the Residential Electricity Market in India

Speaker: Filippo PAVANELLO

Abstract: As temperatures and income increase, household will rely more on air-conditioning to maintain thermal comfort in their dwellings. However, the access to residential cooling energy is highly unequal, and air-conditioning remain a luxury good in most developing countries. As heat stress harms human well-being, identifying cooling adaptation inequalities and adequate policies is critical to protect the most vulnerable. This work thoroughly studies the cooling inequality problem in India, one of the main emerging economies, where the need for space cooling technologies is prominent. First, we provide evidence on the inequality in the access and use of residential cooling energy through an in-depth analysis of the intensive and extensive margin responses of Indian households. We then use our estimates to project how the cooling inequality would develop in the future without government interventions. We show that future increasing incomes are not sufficient to reduce the cooling gaps, and urgent action and investment would be necessary to protect people most at risk from extreme heat. Finally, exploiting household-level information on the purchasing cost of cooling appliances, we find that subsiding more than half of the purchasing cost would highly reduce the cooling gap even in the low-income households, and the benefits of using the technology would be greater than its operational cost for the new adopters.

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