Investigating the Interdependence Between Non-Hydroelectric Renewable Energy, Agricultural Value Added, and Arable Land Use in Argentina

Abstract

We examine the dynamic relationships between per capita carbon dioxide emissions, real gross domestic product (GDP), non-hydroelectric renewable energy (NHRE) consumption, agricultural value added (AVA), and agricultural land (AGRL) use for the case of Argentina over the period 1980–2013 by employing the autoregressive distributed lag bound approach to cointegration and Granger causality tests. The Fisher statistics of the Wald test are examined, and the existence of a long-run cointegration between variables is proved. There are long-run bidirectional causalities between all considered variables. The short-run Granger causality suggests bidirectional causality between AVA and agricultural land use, unidirectional causalities running from AGRL to NHRE and from NHRE to AVA. Long-run elasticity estimates suggest that increasing AGRL reduces carbon emissions; increasing AVA increases GDP and reduces pollution, AGRL, and NHRE; and increasing NHRE reduces AVA and AGRL. Thus, it seems that agriculture and renewable energy are substitute activities and compete for land use. We recommend that Argentina should continue to encourage agricultural production. The substitutability between agricultural and non-hydroelectric renewable energy productions, and their competition for agricultural land use, should be at least reduced or even stopped by encouraging research and development in second-generation (or even in third-generation) biofuel production and in new technologies for renewable energy and for agriculture more efficient in land use.