Conference Agenda

Climate change is expected to reduce demand for space heating while increasing demand for cooling, with important implications for energy systems and climate adaptation. We study the historical and projected impacts of climate change on U.S. natural gas consumption, a sector closely linked to temperature through its role in building heating and electricity generation. Using a flexible empirical framework that relates state-level natural gas demand across residential, commercial, industrial, and electricity-generating sectors to population-weighted, continuously measured heating and cooling degree days, we capture nonlinear and climate-dependent temperature responses. Optimal models, selected from over 151 million specifications via cross-validation, explain up to 98 percent of out-of-sample variation in sectoral demand.

We provide new evidence on climate adaptation by linking weather sensitivity to long-run climate. Colder regions exhibit substantially lower sensitivity to heating shocks, consistent with costly investment in building robustness. Interpreting this sensitivity–climate gradient through a welfare-theoretic framework, our work aims to recover the implicit costs and benefits of adaptation. Ongoing work extends this analysis using empirical designs that adapt recent panel approaches to allow climate-dependent slopes, incorporate cross-tail spillovers, and increase within-state identifying variation via downscaling and reformulated long differences. Forward-looking projections indicate that rising cooling demand will outweigh declines in heating demand, highlighting challenges for energy systems and the importance of integrating adaptation with energy transition policies.