Believe it or not, global warming has actually lowered total energy bills in the U.S. because we’re spending way less on heating.
March 13, 2026
Original Paper
Due to the link between temperatures and household energy demand for space heating and cooling, global warming can be expected to alter both the type of equipment chosen by U.S. households as well as how much energy is consumed in its use. Leveraging detailed household energy and demographic information to estimate a discrete-continuous household energy demand model, this paper estimates the difference in U.S. household energy outcomes from 1990-2023 between actual temperatures and a no global warming scenario. This paper finds global warming during this period induced three percent of U.S. households to switch to electric heating and four percent to central air conditioning. Overall, global warming is found to have reduced annual U.S. household energy consumption by 550 trillion BTUs by the end of the study period and household energy bills by $3.85 billion. JEL Q54, Q41, L94
SSRN · 6409708
The Takeaway
Contrary to the assumption that rising temperatures will always drive up energy costs, the data shows that the reduction in energy needed to heat homes during warmer winters has significantly outweighed the increased demand for summer air conditioning. This has resulted in a net 'discount' on home energy use over the last three decades.
From the abstract
Due to the link between temperatures and household energy demand for space heating and cooling, global warming can be expected to alter both the type of equipment chosen by U.S. households as well as how much energy is consumed in its use. Leveraging detailed household energy and demographic information to estimate a discrete-continuous household energy demand model, this paper estimates the difference in U.S. household energy outcomes from 1990-2023 between actual temperatures and a no global w