Productive electricity and non-electricity consumption effects on economic growth: A Latin America analysis

María P. Pablo-Romero, Rafael Pozo-Barajas and Christian Washburn

Energy, 2024, vol. 305, issue C

Abstract: Electrification is a key pillar in energy transformation to reduce emissions. However, it may also have consequences on production. This study analyzes the effect of using electricity and non-electricity energy sources on production growth. An extended neoclassical production function, with the two uses of energy (electricity and non-electricity), is estimated for 17 Latin American countries from 1990 to 2019 and, for subsamples, based on the level of production per persons employed. The study is performed applying the cross-sectionally augmented, autoregressive distributed lag modeling approach and a non-parametric time-varying coefficients model. The parametric results indicate that the effect of both sources of energy on production are positive and significant. However, the production elasticity with respect to non-electricity consumption is higher than that with respect to electricity consumption. Only in countries with the lowest production levels could electrification be neutral. The non-parametric results show that the effect of non-electricity consumption is decreasing slightly over the period, while the effect of electricity use is increasing slightly, with a tendency towards stabilization at the end of the period. Nevertheless, these changes have been small.

Keywords: Electricity use; Non-electricity use; Economic growth; Energy transition; Latin America (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:305:y:2024:i:c:s0360544224020553

DOI: 10.1016/j.energy.2024.132281

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