Transcript Greenbacks and Green Technology

Natalie Brown
Kshithij Shrinath
Kenyon Smutherman
$74000
$9300
552 kWh
259 kWh
$1400
2400 kWh
How does a country’s level of
economic development affect its
renewable energy production?
 Linear
 Inverse U-shaped
 DevelopingRenewable
countries
produce more
energy production (linear
hypothesis)
 U-shaped Renewable energy
production (inverse Uproduction
production
energy
energyenergy
Renewable
Renewable
production
Renewable
shaped
hypothesis)
 Developing
countries
produce
less(U-shaped
Renewable
energy
production
hypothesis)
Low-income
Middle-income
Low income
Low income
Middle income
Middle income
High-income
High income
High income
 Low/middle-income - vulnerability to climate change
 High-income - energy stability
 Oil price increases and volatility
 Supply-side factors
 Benefits difficult to quantify
 High fixed and initial capital costs
 Urbanizing countries tend toward fossil fuels
 Financing mechanisms unavailable in low-income and
middle-income countries
 High-income countries entrenched in fossil fuels
 US $41 billion in subsidies to oil and gas
 From the World Development Indicators
 Independent variable: log GDP per capita (PPP) in
constant 2005 US$
 Dependent variable: electricity produced from
renewable sources (kWh) per capita (includes nuclear)
 1990 to 2009
 2519 observations from 131 countries
 Simple regression
 Country and year fixed-effects
 Geography – land area, forest area, agricultural land
 Population – density, rural percentage
 Trade – imports/exports
 Political indicators - European Union, OECD, regime
type
Note the
coefficients
 Linear and U-shaped hypotheses significant at 1% level




throughout all models
Linear more correct from descriptive data
U-shape only in underdeveloped category
Developed countries significantly outpace others
Developing similar level to underdeveloped
 Renewable energy is a normal good
 Fairly intuitive
 Underdeveloped and developing countries in trouble
 33% of greenhouse gas usage, 75% of damage
 Adaptation more practical than mitigation
 Internalize the social costs of fossil fuels and social
benefits of renewable energy
 Correct the externality
We Are (Intercultural and Environmentally Conscious)
Georgetown!