Sustainable Development in Latin America – Linking Renewable Energy, Economic Complexity and GHG Emissions

Sammanfattning

This thesis analyses the interrelations of economic complexity, greenhouse gas emissions, and renewable energy in Latin America and the Caribbean (LAC), using annual data from 1998 to 2018. Economic development in the region is characterised by the exploitation of natural resources and low economic sophistication. At the same time, a dynamic renewable energy market has developed in LAC. The Environmental Kuznets Curve is tested, using economic complexity as an explanatory variable to account for the economies’ structural transformation towards a knowledge-based production, directly impacting energy intensity and technological advancement. With the help of fixed effects specifications, it was found that economic complexity and renewable electricity generation have an emission reducing effect in LAC. Furthermore, economic output is associated with increasing GHG emissions and energy supply, suggesting that economic growth and environmental protection are conflicting goals in the region. The results of the thesis suggest economic complexity and renewable energy to be important factors for sustainable development in LAC, implying their relevance for national economic and energy policies.