Globalisation as a motor of renewable energy development in Latin America countries
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Globalisation as a motor of renewable energy development in Latin America countries Matheus Koengkan
. Yormy Eliana Poveda . Jose´ Alberto Fuinhas
Springer Nature B.V. 2019
Abstract The impact of globalisation on the dissemination of renewable energy was analysed for ten Latin America countries for the period from 1980 to 2014. For that propose, was built a model where install capacity of renewable energy is explained by output, KOF globalisation index, and private capital stock. The richness of the short- and long-run relations between variables was analysed by a panel autoregressive-distributed lag model in the form of an unrestricted error correction mechanism. The results of the model’s estimation support a positive effect of the short-run impact of output per capita and long-run elasticities of globalisation and private capital stock per capita on renewable energy diffusion. That results that show that the globalisation can stimulate renewable energy sources evidencing that the process of integration of Latin America countries in the World is a benefit to the development of green energy technologies. The Latin America region policymakers
M. Koengkan (&) CEFAGE-UE and Department of Economics, University of E´vora, E´vora, Portugal e-mail: [email protected] Y. E. Poveda Department of Economics, Federal Fluminense University, Nitero´i, Brazil J. A. Fuinhas NECE-UBI, CeBER and Faculty of Economics, University of Coimbra, Coimbra, Portugal
must take advantage of the process of globalisation to reduce the costs of renewable energy technologies and develop policies encouraging the access of these technologies by households with low income that live in remote or rural regions to reduce the energy poverty, which plagues the countries from the Latin America region. Keywords Globalisation Renewable energy Private capital stock Latin America countries Panel ARDL
Introduction Latin America countries have experienced growth in the use of renewable energy for electricity generation (Washburn and Pablo-Romero 2019). In that process, globalisation has facilitated the access to technological advances contributing to the increase of the renewable energy capacity in Latin America countries. Indeed, the globalisation, through its stimulus of trade and quality of investment, has contributed to the technological change in the energy industry in the Latin America region. Even though Latin America countries have expanded the production of fossil energies, the renewable energy capacity has increased more, what explain the superior level of renewables when
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comparing with other World’s regions (Washburn and Pablo-Romero 2019). Indeed, the renewable energy in Latin America countries has a high share (about 28%) in the total energy consumption, what represents a larger share than the 18.3%, on average, of the World (Washburn and Pablo-Romero 2019). Renewable energy is vital too in electricity generation, where hydroelectric is the most representative
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