Changes in Future Residential Energy Demand Across Regions and Income Levels
This research seeks to understand how energy use in homes varies across different income groups within countries and the resulting impacts on climate, air pollution, and residential energy security. We find that the effects of income growth generate larger proportional increases in total energy consumption and emissions for lower-income regions. Because higher-income groups already use nearly as much energy as they need, the amount of additional energy they use as their incomes increase does not increase by as much as it does for lower-income groups. While lower-income groups are not able to meet as much of their energy needs, they also spend a larger part of their income on energy. As incomes increase for lower income groups, the additional energy they use will improve well-being outcomes, as they are better able to heat and cool their homes to comfortable levels. Additionally, lower-income groups often use more polluting fuels like traditional biomass and coal, leading to more indoor air pollution and health issues. As their incomes increase, these groups will also switch to cleaner energy sources, like natural gas and electricity, which have fewer negative health impacts.
This research explores how energy use in homes could change under different assumptions about future development. It helps us understand what changes will affect the ability of different groups to meet their energy needs and how these changes will impact carbon emissions and groups’ exposure to indoor air pollution. This study looks at energy use by income groups worldwide, using a fully integrated model of the energy, water, land, economic, and climate systems. It shows that as incomes rise, lower-income groups will use more and cleaner energy, reducing indoor air pollution. Income growth, particularly among lower-income groups, will tend to increase total carbon emissions, all else equal. However, in scenarios where a transition to low-carbon energy sources is assumed, the growth in carbon emissions will be reduced. This highlights the importance of considering income distribution when studying how energy needs and corresponding energy resource demands will evolve.
We investigate the future of residential energy demand, emissions, and expenditures, focusing on regional and income-decile levels under various socioeconomic and climate scenarios. Utilizing the Global Change Analysis Model (GCAM), we analyze how income growth and the distribution of income within a region influence energy consumption patterns. Our findings reveal that, while differences in residential energy consumption by income group persist over time, the degree of difference decreases. This reduction results from lower-income groups’ energy consumption increasing at relatively higher rates than higher-income groups which start out closer to satiation levels of energy demand. Lower-income groups continue to be more exposed to household air pollution, although total household air pollutant exposure decreases as incomes rise for all groups.
Our research highlights that the share of income spent on energy is relatively higher for lower-income deciles, with significant regional differences. By incorporating multiple income groups into GCAM and improving the representation of residential energy demand responses, our study offers a nuanced understanding of how socioeconomic changes can influence future energy transitions and environmental outcomes. This research underscores the importance of modeling within-region income distributions to understand how access to clean energy and emissions will evolve in the future and how these will impact living standards and pollution exposure.