Air Conditioning: The Business That Cools Cities and Heats Up the Climate Balance
Air conditioning was born as a symbol of progress: productivity in offices, comfort in homes, and resilience against heat waves. Today, that same symbol is poised to become an accounting paradox for the planet and for any business exposed to energy, construction, durable goods, or public health.
A study published in Nature Communications on February 25, 2026, by researchers from the University of Birmingham projects that global air conditioning use will more than double by 2050, and that its emissions could reach 8.5 gigatonnes of CO2 equivalent per year, surpassing the annual emissions of the United States (5.9 GtCO₂-eq). Additionally, air conditioning could contribute an extra 0.03°C to 0.07°C of warming by 2050, depending on the emission scenario considered. The magnitude of this increase is sufficient to shift discussions around investment, regulation, and urban design over the next decade.
The uncomfortable truth is that this is not an easily reversible "climate luxury." The research also highlights a structural inequality: the regions most exposed to heat—such as parts of South Asia and Africa—currently have less access to mechanical cooling, while wealthier regions maintain higher usage rates despite comparatively lower thermal needs. If lower-income countries achieved the same access as higher-income ones, the impact could add an extra 0.05°C even in the most favorable scenario.
The Demand Curve is Already Set, and Electricity Will Pick Up the Tab
The expansion of air conditioning is not a market hypothesis; it’s a trajectory backed by hard figures. The IEA estimates that residential units have tripled since 2000, reaching over 1.5 billion units in 2022. The study projects that over 45% of the global population could have air conditioning by 2030, up from 37% in 2023.
From a business perspective, this seems like an "obvious" growth story: increased income in emerging markets, rapid urbanization, more heatwaves, and a legitimate social aspiration to live and work without thermal stress. The problem is that this growth doesn’t come alone: it brings with it an electricity bill that, under a mid-range scenario, could reach 4,493 TWh for cooling in 2050.
That number is more than just an energy statistic; it’s a warning sign regarding pressure on networks, marginal costs during peak hours, and the price of regulatory risk. In practice, air conditioning behaves like a demand that surges when the system is under the most strain: extreme heat leads to maximum consumption, and maximum consumption increases the likelihood of price spikes, outages, and the need for investment in capacity.
The strategic lesson is clear: whoever sells equipment and operates buildings is simultaneously selling a future obligation on the electrical system. If the business is measured solely in units sold, the market seems infinite. However, if it is evaluated in terms of total cost to the economy—energy, capacity, maintenance, and emissions—the market demands redesign.
The Feedback Loop: Thermal Equity Threatening Climate Goals
The research outlines a “loop” that executives must recognize as an operational dilemma: increasing access to cooling in vulnerable areas protects health and productivity but may also drive up emissions and complicate efforts to meet global climate goals.
This is not an argument against increasing access; rather, it’s a call to change the product and the system that supports it. When a business model grows on an energy-intensive basis, growth is no longer an automatic virtue. It becomes a risk multiplier.
In terms of equity, the problem is twofold. First, extreme heat disproportionately punishes those with lower purchasing power and in homes that are less equipped to dissipate heat. Second, when the dominant response is to sell more standard units, it reinforces a dependence on electrical consumption in households already operating on fragile budgets. It’s a silent form of extraction: it doesn’t extract through an initial high bill; it extracts through accumulated monthly expenses and vulnerability to rates.
The study also highlights another emissions vector that many executive committees still consider a secondary technical issue: refrigerants. A significant portion of the installed base uses HFCs, powerful greenhouse gases that are released through leaks, poor maintenance, or improper disposal. The point is not to demonize a molecule but to recognize that climate risk is no longer just in the kilowatt-hour but in the entire equipment chain.
In that context, initiatives like the Kigali Amendment—effective since 2019—are important because they aim to cut HFC use by over 80% within 30 years. However, even regulatory success there does not eliminate the larger component: energy. The growth of cooling demands a solution that combines cleaner electricity, greater efficiency, building design, and better usage practices.
The Big Opportunity is Not Selling More Equipment But Selling Less Heat
I have seen too many industries confuse volume with value. Air conditioning is on the verge of falling into that trap on a global scale.
The study proposes four lines of action: rapid transition to clean electricity, adoption of low-impact refrigerants, better building design with insulation and shading, and behavioral changes such as raising target temperatures or shifting consumption away from peak hours. The list sounds “obvious” until one translates it into business incentives.
The real opportunity lies in redesigning the business proposition so that the provider profits when the customer consumes less energy, not more. This requires changing what is sold:
- From “equipment” to the thermal solution of the building. If the product remains a box on the wall, the incentive is to place more boxes. If the product is comfort measured and guaranteed, the incentive shifts to insulation, shades, seals, intelligent control, maintenance, and efficiency.
- From one-time sales to recurrent income linked to performance. In the cooling economy, the large cost occurs during operation. That’s where a service model can capture value while simultaneously lowering emissions.
- From growth by subsidy to user-paid growth. Equitable access to cooling cannot be achieved through eternal programs that deliver equipment without addressing operation and maintenance. It is achieved through offers that convert monthly energy expenses into predictable payments for efficient comfort, with financing compatible with variable incomes.
In practice, this opens space for alliances among manufacturers, utilities, real estate firms, and cities because value is shared. The company that reduces demand spikes decreases the need for investment in the grid. The efficient building reduces absenteeism and improves productivity. The manufacturer that quickly migrates in refrigerants and efficiency protects its license to operate.
The market is enormous. The IEA projects that ten new units will be sold every second over the next 30 years. When a market grows at that speed, the technical standard set today becomes moral and financial infrastructure for decades. Changing specifications, maintenance, and end-of-life processes is, quite literally, shaping future emissions.
Executive Mandate: Turning Cooling into a Resilience and Profit Strategy
The Birmingham study quantifies a reality that risk committees are already sensing: cooling is public health, productivity, and critical electrical demand. It’s also an emissions multiplier if left on autopilot.
For executives, the pragmatic path is organized along three fronts. First, efficiency as a product, not just a campaign: superior specifications, leak control, and professional maintenance reduce life-cycle costs and regulatory risks. Second, buildings that reject heat: insulation, shading, and design reduce equipment size and operating costs; it’s the kind of investment that pays off in the monthly bill, not through rhetoric. Third, dignified access model: growth in vulnerable regions must be financed with payment structures that don’t collapse at the first crisis, because heat doesn’t wait for public budgets.
Cooling will be one of the great businesses of the century, and also one of its major ethical challenges. The only acceptable strategy for a company aiming for longevity consists of conducting a cold-eyed audit of its central equation: stop using people and the environment as inputs to make money, and use money as fuel to elevate people with clean, efficient, and accessible thermal solutions.
