The energy sector is sensitive to changing weather patterns and Pakistan is one of those countries where temperature rise induced by climate change is expected to be above the world average. In this backdrop the present study aims at finding the impact of climate change on electricity demand in Pakistan at the regional and national level. Using monthly data on temperatures to find heating and cooling degree days, the relationship between monthly electricity demand and temperature is explored which is then used to find the impact of projected climate change on electricity demand. The results suggest surging peak loads in summer season due to climatic effect which calls for capacity instalments over and above that needed to cater to rise in electricity demand attributable to economic growth. JEL Classification: Q47, Q54 Keywords: Energy, Climate Change, Electricity Demand, Degree Days, Pakistan

Out of the climatic variables such as temperature, humidity, precipitation, cloud cover, etc., electricity demand has been found most responsive to changes in temperature [Parkpoom and Harrison (2008); Al-Hamadi and Soliman (2005); Hor, et al. (2005)]. According to National Aeronautics and Space Administration, the decade from 2001 to 2010 was the warmest worldwide while the rise in surface temperatures of South Asia region by the end of the century is projected around 3.3oC average annually (IPCC);1 not only are the average temperatures rising but the range of extreme temperatures is also widening. Increase in temperatures can affect human lives significantly; the present study focusses on examining the impact of climate change on demand for electricity in Pakistan.