Globalisation as a motor of renewable energy development in Latin America countries

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 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.