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A transversal perspective on global energy production and consumption: An approach based on convergence theory

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  • Vítor JPD Martinho

Abstract

The transformation of economies and societies associated with technological advances made during the 20th century has not only significantly increased global energy consumption but also placed greater pressure upon production using non-renewable sources. Such circumstances have generated new challenges and urged governments as well as firms to identify and promote new sources of renewable energy. In response to those trends, the chief objective of the study reported here was to analyse the current global framework of the production and consumption of energy obtained from different origins in order to identify opportunities and constraints regarding energy production and consumption that exist among various countries. To that end, data from the World Bank regarding the production and consumption of global energy were analysed in light of the neoclassical and endogenous growth theories of absolute and conditional convergence, respectively, and in terms of panel data models. To reconcile the availability of data across the various countries, data for the period 1990–2013 were used. The data show signs of relevant dispersion among countries and evidence of sigma convergence in the majority of variables associated with global energy supply and demand. Conversely, other evidence indicates a significant absolute convergence of the global production and consumption of energy. Put differently, although significant differences in energy production and consumption among the world’s countries exist, so do signs of convergence, namely, that lower values in some countries are by way of approximation of those verified in countries with higher values. That situation is not necessarily detrimental in terms of renewable sources of energy; however, it is not the case in every context (in some cases the convergence is for the fossil fuel energy, for example). From a strategic perspective, the results recommend policies better customised at the various levels of decision making to promote renewable sources of energy.

Suggested Citation

  • Vítor JPD Martinho, 2018. "A transversal perspective on global energy production and consumption: An approach based on convergence theory," Energy & Environment, , vol. 29(4), pages 556-575, June.
    • Handle: RePEc:sae:engenv:v:29:y:2018:i:4:p:556-575
    DOI: 10.1177/0958305X18754379
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