Alberto Salvo (National University of Singapore)

“Local Pollution Drives Global Pollution: Emissions Feedback via Residential Electricity Usage”

Nov 15, 2017
from 04:10 PM to 05:30 PM

4101 Social Science and Humanities ARE Library

Abstract

A recent literature worries about the alarming adoption of energy-hungry durable goods such as air conditioners by the rising middle class and the implications for greenhouse gas emissions. With 40% of the world’s population living in the tropics, studies consider weather as well as income as drivers of air conditioner use. Here I show that a key behavioral driver of residential electricity use is local air pollution, which ranges from high to severe in the urban developing world. I access longitudinal data on utilities usage for a 10% random sample of households in Singapore over 40 months. Today, newly affluent Singapore combines rich-country residential capital stocks with routine developing-country levels of particle pollution. This unique laboratory enables me to identify and quantify a linkage by which local air quality has enduring, global impacts. Households defensively replace natural ventilation with air conditioning in an attempt to protect the family’s health. Electricity use grows by 1% when PM2.5 levels rise by 10 µg/m3. The impact of particle pollution on electricity demand is statistically significant at 20 µg/m3 PM2.5, consistent with visibility impairment. A simple economic model helps interpret the heterogeneous response across types of households. Hitherto unmeasured benefits of pollution control in emerging megacities, missed in the cost-of-illness approach, are reduced household electricity expenditure and carbon mitigation from reduced electricity generation.

 

Significance Statement

This study establishes a link between two major societal phenomena and shows that this link matters. First, consumption of energy-intensive air conditioning at the expense of natural ventilation, both inside and outside the home, is rising fast among the world’s emerging middle class. Second, high to severe particle pollution levels afflict many of these newly affluent households. Research worrying about the implications of the first phenomenon for greenhouse gas emissions and climate change considers income and temperature as its drivers. This research misses air pollution, the second phenomenon, as another key driver. Counterfactually blowing one year of Beijing’s ambient air over Singapore would increase electricity use by 10% and annual expenditure by US$ 163 per household among households with access to air conditioning at home. The sizable co-benefit from reducing carbon-intensive electricity generation implies that the choice set of climate-change mitigation policies should include protecting urban air quality. Moreover, the use of defensive capital can exacerbate health inequalities.

530-752-0526

Attendees

Seminar is open to the public, space is limited.