15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? THE INTERACTIONS BETWEEN CONVENTIONAL AND ALTERNATIVE ENERGY SOURCES IN TRANSPORT SECTOR, ECONOMIC GROWTH AND CO2 EMISSIONS – PANEL VAR APPROACH Sónia Almeida Neves, António Cardoso Marques, José Alberto Fuinhas NECE-UBI, and University of Beira Interior, Management and Economics Department; Covilhã, Portugal sonia.neves@ubi.pt Vienna, 4 th September 2017 1
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Energy dependence vs share of renewables Germany Czech Republic 70 35 60 30 Introduction 50 25 40 20 Data and 30 15 Methodology 20 10 Results 10 5 0 0 Discussion 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Energy Dependence % RES share % Energy Dependence % RES share % Conclusions Source: Own elaboration using EUROSTAT database Source: Own elaboration using EUROSTAT database Vienna, 4th September 2017 2 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Transport Sector Being the Transport Sector (TS) highly intensive in fossil fuels Introduction consumption, it is delaying the transition to a low-carbon Data and Methodology economies. Results Discussion In 2010 TS was responsible for: - 19% of the global energy used, being 96% from oil, Conclusions - 60% of the global oil used, and - 23% of global CO2 emissions (source: World Energy Council, 2011). In 2014, in the EU countries, TS was responsible for: - 33% of final energy consumption, being 94% from oil, - 25.5% of the GHG emissions (source: European Commission,2016) Vienna, 4th September 2017 3 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Contribution Economic growth, Introduction Conventional CO2 emissions and TS and Data and Methodology alternative energy consumption. TS energy Results e.g. (Chandran and sources Discussion Foon 2013; Saboori et Conclusions Panel Vector al. 2014) Autoregressive (Love and Zicchino 2006) Vienna, 4th September 2017 4 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Objective Introduction • This paper aims to analyse the effects that are resulting from the Data and simultaneous use of the conventional and alternative TS energy Methodology sources on the economic growth and CO2 emissions. Results Discussion • CENTRAL QUESTIONS: Conclusions • What are the consequences of the alternative TS energy sources on the TS decarbonization? • Are both the conventional and alternative TS energy sources contributing to the economic growth? Vienna, 4th September 2017 5 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Data This study uses annual panel data from 1990 to 2014 for 21 high-income OECD countries. Introduction Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Data and Methodology Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, United Kingdom, and the United States. Results VARIABLES USED INCLUDES: Discussion - Gross Domestic Product per capita (LGDP) - TS fossil fuels (coal, crude, oil and natural gas) consumption per capita (LFOSSIL) Conclusions - TS renewables fuels consumption per capita (LRES) - TS electricity consumption per capita (LELE) - CO2 emissions (LCO2) - Total energy consumption except which is consumed by TS per capita (LEN) Hereafter, the prefixes “D” means the first differences and “L” means the natural logarithm. Vienna, 4th September 2017 6 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Data characteristics Cross-section Dependence test (CD-test) Introduction • Suggests the presence of the cross-section dependence, however, DLELE only exhibits cross- Data and section dependence at 10% level of significance . Methodology Results Panel Unit Root test Discussion • Second-generation unit root test (CIPS) was performed, and suggest that the variables are I(1). Conclusions • For DLELE both first- and second-generation unit root test, and they are indicating that the variables are I(1). Correlation and multicollinearity • Correlation matrix values and the Variance Inflation Factor (VIF) were analysed, and confirm that neither correlation or multicollinearity are deserving concern. Vienna, 4th September 2017 7 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Panel Data Vector Autoregressive (PVAR) Introduction Data and Methodology Faced with variables potentially endogenous the use of Panel Data Vector Autoregressive (PVAR) is suitable. The estimator proposed by Love and Zicchino (2006) supports Results stationary endogenous variables as well as the unobserved individual heterogeneity. Discussion f d , Conclusions 0 1 it 1 i c , t t it Granger causality test Impulse Response Functions Forecast Error Variance Vienna, 4th September 2017 8 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Lag order selection criteria Introduction Table 1 : Lag order selection criteria Data and Lag CD J J pvalue MBIC MAIC MQIC Methodology 1 0,421 153,928 0,002 -492,880 -62,072 -232,295 Results 2 0,616 88,856 0,087 -342,349 -55,144 -168,892 Discussion 3 0,706 33,963 0,566 -181,640 -38,037 -94,911 Conclusions The optimal number of the lags 1 were used because it minimizes all the selection criteria (MBIC, MAIC, and MQIC). First order PVAR were estimated Vienna, 4th September 2017 9 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Stability condition Roots of the companion matrix 1 Introduction Data and Methodology .5 Results Imaginary 0 Discussion Conclusions -.5 -1 -1 -.5 0 .5 1 Real Vienna, 4th September 2017 10 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Granger causality test Table 2: Granger Causality test DLELE DLCO2 DLEN DLRES DLFF DLGDP Introduction DLELE does not cause - 1,406 11,388*** 20,566*** 5,650** 5,265** Data and Methodology DLCO2 does not cause 0,012 - 0,047 4,626** 13,396*** 13,548*** Results DLEN does not cause 1,016 9,144*** - 4,600*** 5,430** 19,377*** Discussion DLRES does not cause 1,880 0,578 0,460 - 2,789* 5,790** Conclusions DLFF does not cause 7,840*** 5,124** 12,453*** 12,206** - 29,012*** DLGDP does not cause 3,159* 67,235*** 26,748*** 15,627*** 10,530*** - ALL 10,258* 112,266*** 81,295*** 43,411*** 32,499*** 54,461*** Notes: ***, **, and * denotes statistical significance at 1%, 5%, and 10% respectively. Vienna, 4th September 2017 11 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Summary of the causalities Introduction Data and Methodology Results Discussion Conclusions Vienna, 4th September 2017 12 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Main achievements and their implications • DLFF ↔ DLGDP – The positive bidirectional causality shows the importance of this sector for the entries dynamics of the economy as well as their intensity Introduction on the fossil fuels use. Data and Methodology • DLRES ↔ DLGDP – The renewable fuels is hampering the economic growth. Results This outcome could come from excessive costs associated. The reduction of the economic growth also implies the reduction of the renewable fuels Discussion consumption. Conclusions • DLELE ↔ DLGDP - The TS electricity consumption affects the economic growth positively. The economic growth causes the TS electricity consumption only at 10% level of significance. This means that the penetration of the electricity within the TS are not significantly dependent from the economic performance. Vienna, 4th September 2017 13 sonia.neves@ubi.pt
15 th IAEE European Conference 2017 HEADING TOWARDS SUSTAINABLE ENERGY SYSTEMS: EVOLUTION OR REVOLUTION? Main achievements and their implications Introduction • DLFF ↔ DLRES – Although the renewables fuels only causes the fossil Data and Methodology fuels at 10% level of significance, there is evidence that the renewable fuels could contribute to reduce the fossil fuels consumption. Results Discussion • DLRES ↔ DLELE – There is evidence of the negative bidirectional causality. Conclusions This show us a kind of the substitution effect between electricity and renewable fuels. • DLELE ↔ DLFF – The electricity use are contributing to reduce the dependence on the fossil fuels. Vienna, 4th September 2017 14 sonia.neves@ubi.pt
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