The impact of extreme heat and cold on energy poverty

Abstract

Climate change is shifting the distribution of temperature. The occurrence of more intense, prolonged, and frequent extreme ambient temperatures is redistributing the experience of energy hardship from a problem primarily affecting colder climates to a global issue. To better understand the relationship between climate change and energy poverty, and to develop public policy cognizant of the economic consequences for households, we examine the relationship between temperature and energy hardship risk across climate zones in Australia. Using large nationally representative data (281,956 observations) on energy poverty linked to temperature records between 2005 and 2021, the study investigates the effect of the intensity, duration, and frequency of extreme heat and cold temperatures on energy hardship, and how this risk is differently experienced depending on individual, housing and neighbourhood vulnerabilities and adaptive capacities. Our findings suggest that the risk of energy poverty increases at an accelerating rate with hotter temperatures, and the upward trend in the risk of energy poverty was more pronounced after the average maximum temperature reached 30℃. Conversely, the risk of energy poverty decreases with cold extremes becoming warmer. Middle-aged people (especially in their 30s), women, lone parents, group or multi-family households, and rental tenants were most at risk, though these individual vulnerabilities can be offset by high-quality housing that was protective of the effect of temperature extremes on energy hardship. The risk of energy poverty under a high emissions global warming scenario is projected to increase by 1.08%-1.98% attributable to hotter extreme heat and decrease by 1.63%-2.84% attributable to warmer winter temperatures in long run. Energy hardship will remain a concern despite raising temperatures driven by more extreme heat, especially for populations with individual vulnerabilities and lacking adapted housing and neighbourhoods.