Energy resource productivity and environmental quality: A quantile-on-quantile study of Latin America from 1990 to 2022

Abstract

In this research, we explore how renewable and fossil energy resource productivity impacted environmental quality in Latin American countries from 1990 to 2022, using quantiles for analysis. Our study reveals that renewable energy productivity (RENprod) has a stronger effect in countries with a smaller ecological footprint, diminishing in impact as the footprint grows. Conversely, fossil energy productivity (FENprod) shows an opposite trend. Overall, energy productivity is more likely to benefit environmentally friendly outcomes in countries with smaller footprints at lower quantiles. However, when considering the environmental condition based on the load capacity factor (LCF), which reflects the balance between natural resource supply and consumption, RENprod and FENprod contribute to environmental harm, with renewable energy causing significantly less harm. Consequently, we suggest policy measures to encourage renewable energy supply in sectors such as industries that support economic growth. These policies aim to facilitate a shift toward greener societies with lower environmental impact in the short term, thereby mitigating harmful environmental processes.