In Short : Staying cool without overheating the energy system is the new challenge in a warming world. As temperatures rise, so does the demand for air conditioning—putting pressure on power grids and the environment. Sustainable cooling technologies, smart energy solutions, and policy innovations are vital to ensure comfort without compromising energy efficiency or climate goals.
In Detail : Rising temperatures and incomes are boosting demand for cooling globally, but equity and affordability matter
Around the world, demand for cooling is increasing quickly as temperatures, populations and incomes rise. In 2024, global average temperatures reached 1.5 °C above pre-industrial levels for the first time, intensifying the frequency and severity of extreme weather events such as heat waves. At the same time, economic development is reshaping access to air conditioning in many countries – especially in emerging and developing economies, where more than 80% of projected electricity demand for cooling by 2050 is expected to occur.
Currently, about 3.5 billion people live in regions with high temperatures, yet only about 15% of them own an air conditioner. But that is set to change in the years ahead. Across Southeast Asia, for example, the stock of air conditioners is set to increase ninefold between 2020 and 2040 based on today’s policy settings. In Indonesia specifically, the share of the population that owns an air conditioning unit is expected to rise from 14% in 2023 to 85% by 2050, driven in large part by an improvement in living standards.
Expanding access to cooling stands to improve the quality of life of millions of people. It would also save lives. According to the World Health Organisation (WHO), almost half a million deaths per year globally are related to heat. While extreme heat is not a new concern in many emerging and developing economies, the challenge is becoming more urgent. Meanwhile, recent heatwaves have pushed temperatures to almost 39 °C in Paris, 37 °C in New York City and 37 °C in Seoul, and last month was the warmest June on record in Western Europe – showing that even traditionally temperate regions are increasingly affected.
While demand for air conditioning is growing rapidly, access to cooling equipment is still highly unequal, especially across income brackets. In a region that covers East Asia and the Pacific, for instance, only about 25% of low-income households own an air conditioning unit, compared with over 75% of the richest households. In sub-Saharan Africa, despite high cooling needs, use of air conditioners outside the wealthiest quintile is extremely limited, in part due to a lack of access to electricity. In contrast, Europe – where total ownership of air conditioning units is relatively low, at 20% – sees more equitable distribution across income levels.
Increasing cooling demand is testing the grid, but the right technology can offer relief
Space cooling is now the fastest growing source of energy demand from the buildings sector, rising by almost 4% annually to 2035 under today’s policy settings. Most of this growth is set to occur in emerging and developing economies.
While the increased penetration of air conditioning units is helping households cope with heat, it also brings with it a series of challenges for the energy system – most notably an increase in peak demand, both during the day and in the evening. During the early summer heat waves of 2025, France – where air conditioning ownership is low – recorded an evening electricity peak that was 25% above the off-season average. In New York, where air conditioning ownership is high, it was 90% higher.
These cooling-driven peaks can put electricity affordability and reliability at risk, especially if efficient technologies are not in place to dampen the effects on energy systems.
IEA analysis finds that in India, each 1 °C increase in outdoor temperature in 2024 was associated with a 7 gigawatt (GW) increase in peak electricity demand. This represented a strong increase over the previous five years, and it could further rise to 12 GW per degree in 2030 without further efficiency action. If India were to experience similar heatwaves as in recent years – with temperature anomalies of over 4 °C – the additional peak load would amount to 47 GW, putting substantive pressure on grids and electricity production. However, if all new air conditioners sold in India between now and 2030 were highly efficient, the increase in peak load could be 20% lower.
Boosting energy efficiency makes the benefits of cooling accessible without overstressing power systems or breaking the bank
As households seek effective cooling solutions and policy makers look to address the impacts on electricity grids, improving the efficiency of air conditioning units can serve as a key short-term approach.
Globally, the average new air conditioner sold is only about half as efficient as the best models available. But more efficient equipment does not have to cost more. IEA analysis across Southeast Asia and Latin America shows that for the same amount of money, consumers can purchase air conditioners with efficiency levels ranging from 3 watts per watt (W/W) to more than 6 W/W. That is twice the level of efficiency for the same upfront cost.
Promoting the purchase of high-efficiency units would not only reduce the strain on electricity systems but also would produce cost savings for consumers. At the IEA’s 10th Annual Global Conference on Energy Efficiency, ministers from nearly 50 countries agreed to work collectively towards boosting the uptake of energy-efficient appliances such air conditioners in order to improve the affordability of energy.
Even so, the efficiency of the equipment is only part of the solution. Users can also significantly reduce energy consumption by making the temperature setpoints on their air conditioners slightly higher, or by using fans in conjunction with air conditioning. These options do not require compromises on thermal comfort and can result in much lower electricity costs.
In a study on thermal comfort in Singapore, participants reported feeling equally or more comfortable when air conditioners were set to a higher temperature and used in combination with a fan. This approach uses much less energy: an air conditioner of average efficiency set to 26 °C in a well-insulated building in Singapore consumes about 30% less energy than one set to 24 °C. And adding a fan consumes a negligible amount of additional energy compared with lowering the temperate setpoint by two degrees.
Sustainable cooling requires a big-picture approach, including urban and building design
Keeping cool entails more than just installing air conditioning. How we design our buildings and plan our cities can significantly impact the magnitude of cooling demand.
At the building level, measures like proper insulation and exterior shading can cut a building’s cooling demand by up to 80%, while passive cooling techniques like natural ventilation can offer quick relief, lowering indoor temperatures by up to 9 °C.
As extreme heat becomes more common, rethinking the design of cities is just as important. During a recent heatwave in Paris, for example, nighttime temperatures in an inner-city park were up to 7 °C cooler than in nearby built-up areas. Integrating more green spaces – such as parks and trees – into urban planning can significantly reduce heat island effects and help cities cool down more effectively overnight.
Policy makers must now account for higher cooling demand by adopting a broad, long-term approach that includes both addressing equipment efficiency and integrating cooling considerations into building and urban design.
Policies are key to minimising the impacts of cooling on energy systems
As highlighted in the IEA’s recently updated Energy Efficiency Policy Toolkit, a balanced mix of supportive regulations, information and incentives is key to minimising the negative impacts of rising cooling demand on energy systems around the world.
- Regulation that supports better urban planning, more ambitious building energy codes and minimum energy performance standards for air conditioners can help ensure that high efficiency becomes the norm, bringing down operating costs for consumers without necessarily increasing purchase prices. While over 80 countries have mandatory building energy codes in place, and more than 100 countries have minimum energy performance standards for air conditioners, the stringency varies widely, and there remains significant room for improvement.
- Information can help people make better choices. For instance, energy labels make it easier to choose efficient air conditioners, while guidance on temperature settings supports energy-saving habits and lower energy bills.
- Incentives such as grants can also encourage the purchase of energy-efficient air conditioners, fans and other cooling solutions. By directing subsidies towards those most in need and at risk, policy makers can address multiple objectives at once: lowering energy bills, protecting public health and reducing emissions.
Making smart policy choices now can ensure that the benefits of cooling are widely accessible while keeping their energy and environmental impacts in check.
