Measuring the effect of trade liberalisation on the consumption of non-renewable energy sources in Latin America & the Caribbean Countries
DOI:
https://doi.org/10.17811/ebl.10.4.2021.349-358Abstract
This article investigates the impact of trade openness on the consumption of fossil fuels for a panel of fourteen LAC countries over the period from 1990 to 2014. To this end, a PARDL model in unrestricted error-correction form is estimated. The results of the model regression point indicate that the impact of economic growth and elasticity of trade openness are statistically significant at the 1% level and contribute to increased consumption of fossil fuels in the LAC countries. However, the impact and elasticity of consumption of renewable energy are statistically significant at 1% and 5% levels and thus contribute to decreasing consumption of fossil fuels.
References
Agosin M.R., Ffrench-Davis R., (1993). Trade liberalization in Latin America. CEPAL Review, 50(124):42-62. URL: https://repositorio.cepal.org/bitream/handle/ 11362/10440/1/50041062I_en.pdf.
Cole M.A., (2006). Does trade liberalization increase national energy use?. Economics Letters,92(1):108-112. doi: 10.1016/j.econlet.2006.01.018.
Driscoll J. C., Kraay A. C., (1998). Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data. Review of Economics and Statistics, 80(4):549–560. doi: 10.1162/003465398557825.
Engle R.F, Granger C.W.J., (1987). Cointegration and Error Correction: Representation, Estimation and Testing. Econometrica, 55: 251-276. URL: https://www.jstor.org/stable/1913236.
Fuinhas J.A., Marques A.C., Koengkan M., (2017). Are renewable energy policies upsetting carbon dioxide emissions? The case of Latin America countries. Environmental Science and Pollution Research, 24(17): 15044–15054. doi: 10.1007/s11356-017-9109-z.
Granger C.W.J., (1981). Some Properties of Time Series Data and Their Use in Econometric Model Specification. Journal of Econometrics, 28: 121-130. doi: 10.1016/0304-4076(81)90079-8.
Hauff J., Bode A., Neumann D., Haslauer F., (2014). Global Energy Transitions a comparative analysis of key countries and implications for the international energy debate. World energy council, p.1-30. URL: https://www.extractiveshub.org/resource/view/id/13542.
Houssain M.D.S., (2011). Panel estimation for CO2 emissions, energy consumption, economic growth, trade openness and urbanization of newly industrialized countries. Energy Policy, 39(11):6991-6999. doi: 10.1016/j.enpol.2011.07.042.
International Energy Agency (IEA), (2018). Oil market report. 1-26. URL: https://www.iea.org/oilmarketreport/.
IRENA (International Renewable Energy Agency), (2016). Renewable Energy Market Analysis: Latin America. IRENA, p.1-260. ISBN:978-92-95111-50-9. URL: https://www.irena.org/publications/2016/Nov/Renewable-Energy-Market-Analysis-Latin-America.
Jena P.R., Grote U., (2008). Growth-trade-environment nexus in India. Proceedings of the German development economics conference, Zurich, 18:1-16. URL: https://www.econstor.eu/bitstream/10419/39895/1/AEL_2008_18_jena.pdf.
Johansen S., Juselius K., (1990). Maximum Likelihood Estimation and Inference on Cointegration with Applications to the Demand for Money. Oxford Bulletin of Economics and Statistics,52(2):169-210. doi: 10.1111/j.1468-0084.1990.mp52002003.x.
Jurado M., (2018). Latin America`s Oil Trade Flow. Energia16. URL: https://www.energia16.com/latin-americas-oil-trade-flow/?lang=en.
Koengkan M., (2017). Is the globalization influencing the primary energy consumption? The case of Latin America and the Caribbean countries. Cadernos UniFOA, Volta Redonda,12(33):59-69. ISSN: 1982-1816.
Koengkan M., (2018c). The decline of environmental degradation by renewable energy consumption in the MERCOSUR countries: an approach with ARDL modelling. Environment Systems and Decisions, 38(3):415–425. doi: 10.1007/s10669-018-9671-z.
Koengkan M., (2018d). The positive impact of trade openness on the consumption of energy: Fresh evidence from Andean community countries. Energy, 158(1):936-943. doi: 10.1016/j.energy.2018.06.091.
Koengkan M., Fuinhas J.A., Marques A.C., (2018b). Does financial openness increase environmental degradation? Fresh evidence from MERCOSUR countries. Environmental Science and Pollution Research, 25(30):30508–30516. doi: 10.1007/s11356-018-3057-0.
Koengkan M., Fuinhas J.A., Marques A.C., (2019b). The role of financial openness and China’s income on fossil fuels consumption: fresh evidence from Latin American countries. GeoJournal, p.1-15. doi: 10.1007/s10708-019-09969-1.
Koengkan M., Santiago R., Fuinhas J.A., Marques A.C., (2019a). Does financial openness cause the intensification of environmental degradation? New evidence from Latin American and Caribbean countries. Environmental Economics and Policy Studies, p.1-26. doi: 10.1007/s10018-019-00240-y.
Koengkan M., Sousa F.J.F., (2019d). The impact of wind power consumption on the labour market-a study of ten Europe union member countries. Revista Brasileira de Energias Renováveis, 8(1):76-103. doi: 10.5380/rber.v8i1.53821.
Koengkan M.; Losekann L.D., Fuinhas J.A., (2018a). The relationship between economic growth, consumption of energy, and environmental degradation: renewed evidence from Andean community nations. Environment Systems and Decisions, p.1-13. doi: 10.1007/s10669-018-9698-1.
Mercosul (2019). Saiba mais sobre o Mercosul. URL: http://www.mercosul.gov.br/saiba-mais-sobre-o-mercosul.
Nasreen S., Anwar S., (2014). The causal relationship between trade openness, economic growth and energy consumption: A panel data analysis of Asian countries. Energy Policy, 69:82-91. doi: 10.1016/j.enpol.2014.02.009.
Nkoro E., Uko A.K., (2016). Autoregressive Distributed Lag (ARDL) cointegration technique: application and interpretation. Journal of Statistical and Econometric Methods, 5(4): 63-91. ISSN: 1792-6602.URL: http://www.scienpress.com/Upload/JSEM%2fVol%205_4_3.pdf.
Omri A., Nguyen D. K., Rault C., (2014). Causal interactions between CO2 emissions, FDI, and economic growth: Evidence from dynamic simultaneous-equation models. Economic Modelling, 42:382-389. doi: 10.1016/j.econmod.2014.07.026.
Pablo-Romero M.D., Jésus J.D., (2016). Economic growth and energy consumption: The Energy-Environmental Kuznets Curve for Latin America and the Caribbean. Renewable and Sustainable Energy Reviews, 60:1343-1350. doi: 10.1016/j.rser.2016.03.029.
Pastén R., Saes R., Marín R.C., (2015). Does energy use cause economic growth in Latin America?. Applied Economics Letters, 22(17):1399-1403. doi: 10.1080/13504851.2015.1034834.
Rodríguez-Caballero C.V., Ventosa-Santaulària D., (2017). Energy-growth long-term relationship under structural breaks. Evidence from Canada, 17 Latin American economies and the USA. Energy Economics, 61:121-134. doi: 10.1016/j.eneco.2016.10.026.
Santos H., (2015). Energy Security in MERCOSUR+2: challenges and opportunities. OIKOS, 14(2):05-18.URL: https://www.academia.edu/36080873/Seguran%C3%A7a_Energ%C3%A9tica_no_MERCOSUL_2_desafios_e_oportunidades_Energy_Security_in_MERCOSUR_2_challenges_and_opportunities.
Sebri C.M., Ben-Salha O., (2014). On the causal dynamics between economic growth, renewable energy consumption, CO2 emissions, and trade openness: Fresh evidence from BRICS countries. Renewable and Sustainable Energy Reviews, 39:14-23. doi: 10.1016/j.rser.2014.07.033.
Tissot R., (2012). Latin America's Energy Future. Inter-American Development Bank (IDB),p.1-46. URL: https://publications.iadb.org/handle/11319/5709?localeattriute=en&localeattri bute=es&.
World Bank Open Data, (2020). URL:http://www.worldbank.org/.
Downloads
Published
How to Cite
Issue
Section
License
The works published in this journal are subject to the following terms:
1. Oviedo University Press (the publisher) retains the property rights (copyright) of published works, and encourages and enables the reuse of the same under the license specified in paragraph 2.
© Ediuno. Ediciones de la Universidad de Oviedo / Oviedo University Press
2. The works are published in the online edition of the journal under a Creative Commons Attribution-Non Commercial-Non Derives 3.0 Spain (legal text). You can copy, use, distribute, transmit and publicly display, provided that: i) you cite the author and the original source of publication (journal, publisher and URL of the work), ii) they are not used for commercial purposes, iii) mentions the existence and specifications of this license.
3. Conditions of self-archiving. The author can archive the post-print version of the article (publisher’s version) on the author’s personal website and/or on the web of the institution where he belong, including a link to the page of the journal and putting the way of citation of the work. Economics and Business Letters and its URL https://reunido.uniovi.es/index.php/EBL/index are the only authorized source for correctly giving the reference of the publisher’s version in every mention of the article.
