A Study of Fuel Choice and Consumption in the
Erin T. Mansur, Robert Mendelsohn, and Wendy Morrison
Journal of Environmental Economics and Management, Volume 55, Issue 2, March 2008, pages 175-193.
JEEM web appendix, March 2008.
Working Paper, October 2007.
Previously titled: “A Discrete-Continuous Choice Model of Climate Change Impacts on Energy”
SSRN Yale SOM Working Paper No. ES-43 (abstract number 738544), March 2005.
Using cross-sectional data, this paper estimates a national energy model of fuel choice by both households and firms. Consumers in warmer locations rely relatively more heavily on electricity rather than natural gas, oil, and other fuels. They also use more energy. Climate change will likely increase electricity consumption on cooling but reduce the use of other fuels for heating. On net, American energy expenditures will likely increase, resulting in welfare damages that increase as temperatures rise. For example, if the US warms by 5°C by 2100, we predict annual welfare losses of $57 billion.