We examine the relationship between energy consumption and economic growth in Latin America and the Caribbean using panel data from 1971 to 2019. Employing both parametric and non-parametric methods, we find a robust positive correlation between Latin America and the Caribbean's economic activity and energy consumption. Specifically, a 1% increase in income is associated with a 0.4% increase in total energy use in the short term, rising to a 0.9% in the long term. Further analysis highlights that Latin America and the Caribbean countries consistently display higher income elasticities compared to other global regions and this relationship exhibits discernible non-linearities. A temporal breakdown indicates an increased correlation in Latin America and the Caribbean post-1991 confirming the non-linear, region-specific, and temporally evolving characteristics of the income-energy relationship. Our results are robust to multiple methodological approaches and to variations in how income and consumption are measured. These findings hold significant implications for energy policy in the region, especially in the context of climate change mitigation efforts.
We examine the relationship between energy consumption and economic growth in Latin America and the Caribbean using panel data from 1971 to 2019. Employing both parametric and non-parametric methods, we find a robust positive correlation between Latin America and the Caribbean's economic activity and energy consumption. Specifically, a 1% increase in income is associated with a 0.4% increase in total energy use in the short term, rising to a 0.9% in the long term. Further analysis highlights that Latin America and the Caribbean countries consistently display higher income elasticities compared to other global regions and this relationship exhibits discernible non-linearities. A temporal breakdown indicates an increased correlation in Latin America and the Caribbean post-1991 confirming the non-linear, region-specific, and temporally evolving characteristics of the income-energy relationship. Our results are robust to multiple methodological approaches and to variations in how income and consumption are measured. These findings hold significant implications for energy policy in the region, especially in the context of climate change mitigation efforts.
“…The high energy consumption implies greater consumption of fossil fuels and the environmental consequences being notable (deforestation, desertification, and the erosion of soil). In Latin America, buildings generate 22% of the total final energy demand of the region ( € Urge-Vorsatz and Herrero, 2012), and the forecasts indicate that energy demand will increase by at least 80% in 2040 (Balza et al, 2016), due to the expansion of the middle class (Gertler et al, 2016). The solutions to reduce greenhouse gas emissions are focused on technological approaches by market mechanisms to curb carbon emissions.…”
PurposeCarbon dioxide emissions affect the environment, presenting major implications for sustainable development and consequently model climate change policies. The main aim of the paper is to highlight the factors leading to CO2 emissions in Latin America.Design/methodology/approachThe analysis was performed using data for 1990–2020 and panel regression and STATA software.FindingsThe results highlighted that the variables have significantly influence CO2 emissions in case of the countries in the sample.Originality/valueThe novelty of the paper consists in using all financial inflows of together (foreign direct investment, official development assistance and remittences), Latin America heavily in-flowed with remittances from the USA. Since Latin America is enriched with forest areas, the authors also covered this variable in the estimations. Urbanization and transportation are induced by remittance inflows, thus wellbeing was incorporated in the model. The conclusion of the study demonstrates the need for complex measures involving public-private partnerships, public awareness of the need for energy transition and the involvement of foreign-owned companies that must not only pursue their own interests but also generate positive economic, environmental, and social externalities in host countries.
“…Authorities can achieve a similar impact by curbing domestic demand through energy efficiency standards and other demand management measures [53,54]. Policymakers must also ensure sufficient investment in upstream and midstream infrastructure to maximize the potential of energy exports, including through public-private partnerships, and safeguard their physical security [55,56]. Finally, maintaining a certain level of fuel stocks and managing spare production capacity can help alleviate fluctuations in demand and allow an exporter to quickly adjust to the current state of the market, although such measures carry additional costs [57].…”
Despite the recent expansion of the scope, the main pillars of energy security remain physical supply and price components. This paper highlights the novel developments of this notion, including the exporters’ perspective, relevant challenges, indicators, and policies. Furthermore, we apply the portfolio theory approach to five Gulf Cooperation Council countries to construct portfolios representing the trade-offs between maximizing returns (oil export growth or export prices) and minimizing risks (standard deviation of return variables). We assess portfolios’ resilience to external demand and logistical shocks by running several disruptive scenarios. We find that oil exporters adopt a balanced approach to the risks associated with export volume growth and pricing, which is different from some major oil importers that prioritize either the physical supply or price stability. Simulation scenarios of increasing oil exports to China would have a significant impact mainly on Saudi Arabia and the United Arab Emirates (UAE), but not on the others, while scenarios of reduced oil exports to the United States would impact mainly Saudi Arabia and Kuwait. A blockade of the Malacca Strait would reduce export volumes and increase portfolio risks for all five economies, with Kuwait and Oman most affected.
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