Background/Objectives

The transition to a net-zero greenhouse gas emissions economy is pivotal for mitigating climate change, yet the impact of such policies on the residential energy sector across diverse income groups in the United States remains uncertain. In turn, understanding such distributional impacts is crucial for designing equitable and effective energy policies that address climate change while minimizing disparities.

Approach/Activities

In this study, we employ an integrated multisector model (GCAM-USA), featuring an expanded set of 10 income groups in the residential energy sector, to examine the distributional effects of net-zero policy on residential energy security across income groups. Specifically, we develop a version of GCAM-USA where residential building energy demand is disaggregated from a single, representative consumer (whose income is represented by average GDP per capita) to multiple consumer groups, differentiated by the average income level for 10 population deciles. This multiple-consumer feature is important because (1) demand for residential floorspace and energy are non-linear in income, so modeling more income groups improves the representation of total demand, and (2) this feature allows us to explore the distributional effects of policies on these different income groups and the resulting residential energy security disparity across the groups.

Results/Lessons Learned

We analyze key output variables related to the residential energy security measures under net-zero policy scenario versus business-as-usual scenario, including direct model outcomes such as energy consumption and derived energy security indices such as energy burden and energy service satiation gap. Our study identifies unequal impacts across groups, underscoring the need for targeted policy interventions that promote equitable transitions to a net-zero economy, with consideration of the unique challenges faced by distinct income groups in the United States.