Renewable electricity generation is vital to sustainable development, especially in Latin America and the Caribbean. These regions lack supranational policies to address climate change, resulting in alarming differences in energy strategies among countries. To compare electricity generation sustainably, a cluster analysis is performed using 20 indicators and 2019-2020 data. The analysis identifies seven groups of countries with similarities in their use of renewable resources, electricity generation, and consumption. This study emphasizes the importance of renewable energy sources in meeting environmental policies and sustainable development goals, while also highlighting the need for coordinated regional policies to address climate change.
Energy efficiency is the best tool to improve sustainability and affordability of energy services. However, there are considerable challenges when it comes to identifying opportunities and measurement. This monograph provides a comprehensive understanding of the trends and progress made in terms of energy intensity in Latin America and the Caribbean (LAC) compared to other world regions and nationally by looking at the aggregate, industrial and household levels. Additionally, it discusses the limitations of using such indicator to measure energy efficiency in LAC. In order to complement perspectives resulting from this indicator, it investigates the counterpart challenge of promoting energy efficiency: creating incentives. To address this challenge, the present document proposes a conceptual framework through which to analyze energy efficiency policies and regulation across the region. This framework consists of four steps: Law and regulation, Types of incentives, Targets and Governance and Support. The analysis carried out leads to policy recommendations at both the national and regional levels.
Energy access is an essential prerequisite for economic, social, and human development. The 2015 United Nations Sustainable Development Goals (SDGs) explicitly recognized affordable and clean energy as a key factor in development, alongside education and poverty alleviation. The UN Sustainable Energy for All initiative (SEforALL) mobilizes international donors, countries, and the private sector to help people in developing countries gain access to modern energy services.To assist in support of SEgorALL goals, this joint study of the Inter-American Development Bank (IDB) and the United Nations Development Programme (UNDP) provides a comprehensive review of energy poverty policies and programs in Latin America and the Caribbean (LAC). This report measures the progress and impact of energy-access programs and also documents the experience of successful projects. This study reviews cutting-edge methodologies to assist in program design, shares of experiences of successful programs and develops a vision for reaching sustainable energy for all in the LAC region. With electricity coverage at more than 96 percent, LAC is close to becoming the world’s first developing region to achieve universal access to electricity. Despite recent progress, within LAC there are still substantial pockets of energy poverty. Approximately 21.8 million people are without electricity access. More than 80 million people rely on firewood and charcoal for cooking that is burned in fuel-inefficient, primitive stoves. These traditional cooking technologies emit a significant amount of indoor air pollution (IAP), which has been linked to respiratory illnesses and adverse environmental impacts. Thus, in addition to promoting electricity, energy access programs also might give priority to the promotion of cleaner methods cooking by making available better stoves and cleaner burning fuels at reasonable costs. The report also explores ways to measure energy poverty and monitor energy access in developing countries. The accuracy and effectiveness of tools such as the IEA’s household energy data efforts and the Global Tracking Framework depend on collecting information through standardized national surveys. Approaches to measure energy poverty and monitor energy access have increasingly focused on the provision of energy services such as lighting, space conditioning and cooking. The transition from low-quality energy services to more modern forms can be accomplished in different ways. As households in developing countries adopt electricity and clean methods of cooking, they benefit from higher quality, lower cost and convenient to use appliances. However, measuring the societal and developmental benefits of energy investments--though difficult--is important. Two basic approaches have evolved over the years to measure the benefits of energy access: (i) consumer surplus and (ii) regression-based techniques. The consumer surplus approach evaluates the economic benefits of energy services through measuring increased demand resulting from lower costs of such energy end uses such as lighting, radio and television. When possible, rigorous impact evaluation techniques based on multivariate models can be used to more directly measure the socioeconomic benefits associated with energy access and modern energy services including higher income and improved education. In recent years, new approaches for meeting the requirements of modern and sustainable energy services have emerged. Due to technical and market changes, new types of equipment have become available for providing energy services to rural areas. In LAC, three basic models have been developed to provide rural populations with electricity service: (i) main grid extension, (ii) community networks, and (iii) individual home-based systems (including clean cookstoves).
Over the coming decades, the supply of electric power will need to expand to meet the growing demand for electricity, but how the production and use of electricity develops will have broad ramifications for the diverse economies and societies of Latin America and the Caribbean. This report discusses the critical issues for the power sector considering a baseline scenario to 2030 for countries and sub-regions. Among these critical issues are the demand for electricity, the total new supply of electric generating capacity needed, the technology and fuel mix of the generating capacity, and the CO2 emissions of the sector. Under modest GDP growth assumptions, the demand for electricity in Latin America and the Caribbean would more than double by 2030. The analysis suggests that under any economic scenario, it will be challenging for the Region to meet future electricity demand. The report shows that meeting the demand for electricity in Latin America and the Caribbean can be achieved by not only building new generating capacity by the expansion of hydropower and natural gas, but by relying on an increased supply of non-hydro renewables, expanding electricity trade, and making use of supply and demand-side energy efficiency to lower the overall demand for electricity. Some recommendations derived from the report are the need for strengthening regulations and market design of hydropower and gas power generation projects and the need to design supportive policies to develop renewable energy technologies and promote energy efficiency measures. The primary audience to which this report is addressed are policy makers, power sector planners and stakeholders.
Within Latin American and the Caribbean (LAC), small island developing states (SIDS) of the latter are wholly reliant on their natural environments for their tourism-dependent economies yet are experiencing declining environmental health. These effects are exacerbated by Caribbean susceptibility to climate change and growing populations. With limited size, elevation, GDP, and water resources compared to Latin America, the subregion requires management and solutions tailored to the needs of each country. This study examined current and future sustainability of the Caribbean SIDS by assessing the nexus of water-energy-food (WEF) resources at the national level. In addition, the potential for nature-based solutions (NBS) was examined as a means of balancing sectors of WEF. To understand current sustainability, parameters related to water, energy, and food were compiled for 10 of the 16 SIDS of the Caribbean basin. The parameters for the water sector were compared to Falkenmark indicators, whereas energy and food sectors were compared with the LAC average for that parameter. Countries that scored below Falkenmark indicators or LAC averages across the parameters for each sector were deemed as currently unsustainable. Final classifications were tabulated for each of the SIDS to determine sectors of the WEF Nexus where they were currently failing. A geospatial analysis utilizing GIS was then conducted to determine if each SIDS retained available land for the potential of nature-based solutions for WEF Nexus failures. Data for GIS analysis included population density, slope, underlying geology, and land use/land cover. Two separate analyses were conducted, one utilizing sedimentary geology and the other employing non-sedimentary geology for countries of volcanic origin. To determine if there is sufficient available land for NBS implementation, a threshold was calculated for each country incorporating per capita requirements to treat total wastewater produced by each nation. Countries with available land greater than that of their calculated threshold were considered as able to reach sustainability for the WEF Nexus by installing NBS. Population growth and climate change effects (sea level rise and precipitation loss) were modeled for 2050 to estimate future conditions. Sea level rise (SLR) data were used as physical limitations to the installation of NBS; areas with elevations below predicted SLR were removed from available sites for NBS. Population growth and precipitation loss were used for calculating available water per capita in the year 2050 and were compared with 2020 levels. A majority of the countries examined were failing in two or more sectors of the WEF Nexus under current conditions and were thus classified as unsustainable. All countries were failing in at least one sector of the WEF Nexus, denoting subregional unsustainability in the food sector. From GIS analyses, each country was estimated to have sufficient land for potential NBS. The land area available for each country was far greater than the constructed wetland threshold for treating all wastewater for the current population. Under future conditions, this determination was not refuted, as estimated SLR did not impact available land enough to fall below constructed wetland area thresholds. Available water levels, however, were projected to be stressed by increased population and precipitation loss, resulting in three countries scoring a “fail” in the water sector where they had previously scored a “pass.” As water is a strong component of the WEF Nexus, this is highlighted as an area of focus for NBS. The current sustainability of the WEF Nexus in the Caribbean SIDS is overall failing, with future conditions intensifying these failures. However, every country has potential to implement NBS to balance the Nexus for both current and future scenarios. This analysis also works to classify the Caribbean SIDS as their own region outside of their LAC designation, as the SIDS are facing barriers that other LAC states are not generally experiencing. It is important that the Caribbean look to sustainable and effective solutions such as NBS to prevent water shortages, food inaccessibility, and energy starvation.
This book explores the potential for renewable energy development and the adoption of sustainable production processes in Latin America and the Caribbean. By examining the energy transition process, the impact of environmental degradation, and the relationship between renewable energy sources and economic growth, the effects of increased globalisation and liberalisation in this part of the world are analysed. Particular attention is given to renewable energy investment, the energy-economics growth nexus, the impact of trade openness, and the mitigation of carbon emissions. This book aims to highlight econometric techniques that can be used to tackle issues relating to globalisation, the energy transition, and environmental degradation. It will be relevant to researchers and policymakers interested in energy and environmental economics.
With rapid energy growth in the past 40 years, the Latin American and Caribbean (LAC) region has maintained a steady increase in electricity needs above the global level. While there is no question that demand will remain strong over the next two decades, what remains to be seen is what kind of energy matrix will be used to meet that appetite and what will be the investments going into the industry. This report makes an attempt to answer these critical questions by taking a deep look into the demand and supply side of the industry. To this end, it will seek to (i) identify the amount of demand growth until 2040, (ii) project the electricity generation matrix by each energy source, and (iii) determine the investment requirements by source, based on cost efficiency criteria, for regulators and utilities’ consideration.
Due to the lack of systematic policy evaluations, identifying successful policies in the Latin American and the Caribbean (LAC) region is a hunting task. Nevertheless, this type of analysis is crucial to inform policymakers in their decision-making process. Herein we contribute to filling this gap by assessing the progress in terms of energy services since the year 2000 and reviewing the policies that have led us to where we are.We focus on three fundamental dimensions in the definition of energy services: access to electricity and clean fuels for cooking, affordability of those energy services and quality considering both service’s interruptions and energy losses. We find that countries that have improved in all these dimensions simultaneously, catching up with the best performers in the region, are the ones that have implemented integrated policies that are part of a pluriannual plan, implemented in a strong institutional environment.Aside from macroeconomic differences, successful energy policies have in common the following characteristics: (i) important institutional reforms already in place by the end of the century; (ii) state-led plans that measure performance accounting for most dimensions simultaneously and including mechanisms to enforce preestablished objectives in targeted population; (iii) appropriate financing mechanisms to ensure affordability; and (iv) partnership with private stakeholders when their participation increases efficiency, adoption of innovation and ensure maintenance, either directly or through the involvement of local communities.Even if the discussion is presented dimension by dimension, two countries appear like having implemented successful integrated policies: Peru and Ecuador. Despite their institutional differences, they have succeeded in increasing access to affordable electricity that is more reliable (with less frequency and duration of interruptions). Additionally, Ecuador has also enhanced efficiency through electricity loss reduction thanks to enforceable performance-based regulation.Aside from these two countries, other countries have also implemented successful policies that have greatly improved one or two of the dimensions mentioned but fail to tackle all the issues simultaneously. This is the case of El Salvador with access to clean cooking and fuel subsidy reform, for example. Similarly, Nicaragua appears as an example in bridging the gap in access and Brazil, Colombia and more recently Argentina are implementing a mechanism to target demand-side subsidies based on family economic means.
How do households consume and spend on energy? What are the drivers of their spending and consumption patterns? How does energy consumption has evolved? What is to be expected as the region climbs the development ladder? What are the distributive implications of different energy pricing approaches? This book looks at these questions and examines which policies work in reducing energy poverty and increasing energy savings. The authors unveil the growing household demand of better quality of energy and show that to achieve more cost-effective and progressive public policies, it is necessary to strengthen the transparency and sustainability of energy pricing while having into account the consumer behavioral responses. This volume is a resource for designing energy policies based on an empirical understanding of the household’s energy needs.
