DEVELOPMENT AND THE IMPACT OF CLIMATE CHANGE ON ENERGY DEMAND: EVIDENCE FROM BRAZIL

This paper investigates the effects of climate on residential electricity use for households from different income classes in Brazil. Using cross-sectional data, the study finds that the temperature elasticity of electricity consumption varies significantly across income classes. The temperature elasticity of low income households is not significantly different from zero but middle and high income families have a long run temperature elasticity of 0.8 and 1.6 respectively. As emerging low latitude countries develop and incomes rise, the welfare damages of warming in the energy sector will become substantial.