Rethinking the Economic Impact of Future Cooling Energy Demand Variations: Insights from Comprehensive Climatic Conditions on Thermal Comfort

   As global temperatures continue to rise, the world faces a challenge in managing energy demand. With more frequent and severe heatwaves, the demand for cooling solutions surges, increasing electricity consumption and investments in cooling infrastructure. A growing number of researchers are focusing their efforts on comprehending the economic impacts of these shifts in energy demand. Nevertheless, many of these studies have predominantly relied on partial climatic factors, such as solely using daily mean temperature to estimate trends in cooling energy demand. Daily mean temperature, however, may not fully capture the building's thermal environment. Additionally, traditional methods, which do not comprehensively capture all relevant climatic conditions, have revealed regional variations in damage costs that may lead to biased results.

  This paper addresses three main research questions:

• What influences the economic impacts of cooling energy demand variations when including daily maximum and minimum temperatures and humidity in calculating Cooling Degree Days(CDD)?
• How much does the new Cooling Degree Days (CDD) calculation affect regional variation?
• How can the economic impacts of cooling energy demand variations be sensitive to shifts in the thermal comfort zone?

   Three CDD estimation methods were compared: 1) ASHRAE(traditional method) 2) UKMO(by daily maximum and minimum temperature), and 3) UKMO with HUMidex(adjusting temperature with relative humidity). We used three representative concentration pathways (RCP2.6, RCP4.5, RCP8.5) with four general circulation models to represent climate conditions. Using AIM/Hub, a CGE-based integrated assessment model, we estimated energy demand changes and GDP loss due to rising cooling energy investment. We assumed that these investments have constant elasticity of substitution between value added in capital, labor, and land, directly leading to GDP loss in AIM/Hub. We also simulated by adjusting the setpoint temperature in the thermal comfort zone with temperature and humidity conditions.

   Results reveal ASHRAE's higher CDD values in most regions but a comparable global GDP loss of about 0.61% by 2100 (compared to current emission trends and 2℃ goals), similar to other methods (0.55-0.57). However, regionally, ASHRAE and UKMO with HUMidex show reverse outputs. For instance, Japan, with a hot and humid summer, experiences a 1.53% GDP loss in ASHRAE but -1.01% in UKMO with HUMidex. These findings suggest less future cooling energy investment is needed in prior hot and humid regions, reducing economic impacts. Similar trends occur in most hot and humid regions, while hot and arid regions like Turkey and Australia experience opposite outcomes. Adjusting setpoint temperature shows that lifestyle change or building energy efficiency enhancement, which can affect cooling setpoint temperature, can avoid these economic impacts. However, more consideration should be needed in estimating adaptation costs for these changes.