Socio-economic productive capacities and energy efficiency: global evidence by income level and resource dependence.

Mehmet Demiral,Özge Demiral

doi:10.1007/s11356-021-17266-z

Mehmet Demiral, Özge Demiral

Open Access

https://doi.org/10.1007/s11356-021-17266-z

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Abstract

This study tests the effects of productive capacities in socio-economic factors (human capital, transport, information-communication technology, institutions, private sector, and structural change) on energy efficiency in a sample of 125 countries. Energy efficiency is assessed by energy productivity (gross domestic product per unit of total primary energy supply) and energy intensity (total primary energy supply per capita). The world sample is divided into four income groups and an income-heterogeneous control group of non-renewable-resource-dependent economies. The study utilizes cross-sectionally dependent and stationary panel data from 2000 to 2018. The analysis of variance shows that higher income groups monotonically have higher levels in socio-economic productive capacities and energy intensity. The regression results from appropriate fixed-effects and random-effects modeling reveal varied driver and barrier influences of the socio-economic factors on energy efficiency improvements (higher energy productivity and lower energy intensity). In some cases, predictors scale up both energy productivity and energy intensity indicating the issue of the rebound effect. Higher human capital capacity stimulates energy efficiency except for middle-income groups. Higher transport capacity reduces energy productivity, except for upper-middle-income economies, and increases energy intensity for low-income and middle-income groups. The deployment of information-communication technologies is positively associated with energy productivity, except for low-income economies. Energy productivity performance of resource-dependent economies is improved by higher productive capacities in institutions and private sectors but impaired by structural change, whereas structural change drives energy efficiency in low-income economies. Additionally, the growth of gross national income per capita worsens energy efficiency for resource-dependent economies. Bidirectional feedback causalities are established between energy efficiency and its predictors in most cases. The heterogeneous findings are further discussed for providing research and policy implications.

Highlights

The economic growth of resource-scarce industrialized economies has been threatened by the increasing cost of energy shocks (Esseghir and Khouni 2014; Van de Ven and Fouquet 2017; Velasco-Fernández et al 2020)
By addressing the interdependence of energy efficiency and productive capacities, we suggest that productive capacities in socio-economic factors may be affecting the energy efficiency performance of countries depending on their income level and resource dependence
Using Productive Capacities Index (PCI) metrics, this study focuses on the examination of the impacts of productive capacities in socioeconomic factors including human capital, transport, information-communication technology (ICT), institutions, private sector, and structural change on energy efficiency for a world sample

Summary

Introduction

The economic growth of resource-scarce industrialized economies has been threatened by the increasing cost of energy shocks (Esseghir and Khouni 2014; Van de Ven and Fouquet 2017; Velasco-Fernández et al 2020). Some resource-abundant developing economies have been facing varied challenges of overdependence on the extraction of non-renewable energy resources (IMF 2012; Havranek et al 2016; Zallé 2019). Rising demand has created new social and political challenges including energy insecurity and higher greenhouse gas emissions resulting from the increased consumption of fossil fuels. These challenges become more complicated given the preponderance of nonrenewable fossil sources (with a steady share of about 80%) in the world energy production and the presence of an unacceptably high share of the world population without access to energy (OECD 2011; IEA 2019, 2020)

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