The relationships between total, electricity and biofuels residential energy consumption and income in Latin America and the Caribbean Countries

Abstract

Controlling residential energy consumption in Latino America and the Caribbean countries is crucial to reduce CO2 emissions, as it has an important energy-saving potential, and its environmental controls are difficult to displace offshore. The aim of this study is to analyze the relationships between residential energy consumption and income for 22 Latin America and the Caribbean countries in the period 1990-2013. For this purpose, residential energy environmental Kuznets curves (EKC) are estimated by taking into account the heterogeneity among the countries by including two control variables: one representing the possible effect of urbanization on residential energy use and the second representing the possible effect of petrol production. The EKC are estimated for total residential energy consumption, for residential electricity consumption and for biofuels and waste energy consumption. The elasticities of total, electricity and biofuels residential energy consumption with respect to income are calculated for each year and country, analyzing the different behavior between countries. Obtained results show that the EKC hypothesis is confirmed for the residential sector when the biofuels energy consumption is considered. Moreover, the results also show that the turning point has been reached in some countries. Nevertheless, the EKC is not confirmed when electricity or total residential energy consumption is considered. Thus, for total residential energy consumption, the elasticity is always positive, growing also as the income does. For electricity energy consumption, the elasticity is also always positive, since although the elasticity decreases until a threshold, from an per capita income value it begins to grow.