Nonlinear climate change effects on building energy consumption: a second-generation modeling with moderation case of BRICS countries

While there are efforts to increase the share of renewable energy, many developing countries still rely on nonrenewable energy consumption in production. So, this study tried to determine the impact of climate change on fuel energy consumption. This study is based on secondary data for BRICS countries from 1970 to 2023. According to nonlinear analysis using 2nd Generation Panel Quantile ARDL (Auto Regressive Distributed Lag) with pooled mean group specification, long-run coefficients indicate a U-shaped climate and energy demand relationship. It implies that fossil fuel energy consumption first decreases and then increases with an incessant increase in global warming. Control variables like population density and globalization are responsible for increasing fossil fuel energy consumption, while education and technological improvement in the industry are decreasing it. With the incorporation of the role of education as a moderator, the U-shaped climate energy relationship is flipped to an inverted U-shaped, implying that incorporating education regarding climate change can reduce fossil fuel energy consumption. The findings highlight how rising temperatures increase residential, commercial and industrial building energy demand which is generally filled using fossil fuels.