This study uses a three-step approach to estimate the impact of global warming on U.S. energy expenditures for space heating and cooling in residential and commercial buildings. First, average results from six different global circulation models are used to estimate the change in heating and cooling degree days in five U.S. climate zones associated with a 1 degrees centigrade (C) global warming. Second, the change in degree days is mapped into a corresponding change in U.S. energy use for space conditioning, taking account of differences in population and baseline space conditioning intensity levels across regions, under the assumption that desired indoor temperature is unaffected by climate change. Finally, we estimate the associated change in energy expenditures. We find that a global warming of 1 degrees C would reduce projected U.S. energy expenditures in 2010 by $5.5 billion (1991 dollars). This contrasts with earlier studies which have suggested modest global warming would increase U.S. expenditures on space conditioning energy.