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Matheus Koengkan · José Alberto Fuinhas
Globalisation and
Energy Transition in
Latin America and
the Caribbean
Economic Growth and
Policy Implications
Globalisation and Energy Transition in Latin
America and the Caribbean
Matheus Koengkan • José Alberto Fuinhas
Globalisation and
Energy Transition in
Latin America and the
Caribbean
Economic Growth and Policy Implications
Matheus Koengkan José Alberto Fuinhas
Department of Economics, CeBER and Faculty of Economics
Management, Industrial Engineering University of Coimbra
and Tourism (DEGEIT) Coimbra, Portugal
University of Aveiro
Aveiro, Portugal
ISBN 978-3-031-13884-3 ISBN 978-3-031-13885-0 (eBook)

https://doi.org/10.1007/978-3-031-13885-0
© The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer
Nature Switzerland AG 2022
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Contents
1 Introduction 1
2 Renewable
Energy Transition and Globalisation in the
Latin American and Caribbean Region: A Five-Decade
Picture 7
3 Does
Financial Openness Expand the Renewable Energy
Investment in Latin American Countries? 27
4 The
Interactions Between Renewable Energy
Consumption, Economic Growth, and Globalisation:
Fresh Evidence from the Mercosur Countries 63
5 The
Energy-Economic Growth Nexus in Latin American
and Caribbean Countries: A New Approach with the
Globalisation Index101
6 Impact
of Trade Openness on the Consumption of Fossil
Fuels in Latin American and Caribbean Countries137
v
vi Contents
7 The
Role of the Globalisation Process in Mitigating
Carbon Dioxide Emissions in Latin American and
Caribbean Countries175
8 Does
the Energy Transition Process Decrease the
Environmental Degradation in Latin American and
Caribbean Countries?199
9 Conclusions245
Index253
About the Authors
Matheus Koengkan holds a PhD in Economics from the University of

Évora. He is an energy and environmental economics researcher at the
Department of Economics, Management, Industrial Engineering and
Tourism (DEGEIT), University of Aveiro, Aveiro, Portugal. He has pub-
lished in international journals, such as Energy; Environmental Economics
and Policy Studies; GeoJournal; Environmental Science and Pollution
Research; and Environment Systems and Decisions.
José Alberto Fuinhas, PhD in Economics, is Professor of Monetary
Economics and Intermediate Econometrics at the Faculty of Economics
of the University of Coimbra, Coimbra, Portugal. In addition, he is a
researcher in macroeconomics, energy economics, and environmental eco-
nomics at the CeBER—Centre for Business and Economics Research—
sponsored by the Portuguese Foundation for the Development of Science
and Technology. He has published in international journals, such as
Energy, Economic Modelling; Energy Policy; Energy Economics; Renewable
and Sustainable Energy Reviews; Applied Energy; Environmental Science
and Policy; Environmental Resources and Economics; and Energy Sources
Part B: Economics, Planning, and Policy.
vii
List of Figures
Fig. 2.1 Evolution of GDP per capita growth (annual %) in Latin

America and the Caribbean (1989–2014). (The authors created
this figure using the World Bank Open Data database (2021)) 9
Fig. 2.2 Evolution of GDP per capita (current US$) in Latin America
and the Caribbean (1989–2014). (The authors created this
figure using the World Bank Open Data database (2021)) 10
Fig. 2.3 Evolution of electric power consumption (kWh per capita) in
Latin America and the Caribbean (1989–2014). (The authors
created this figure using the World Bank Open Data database
(2021))11
Fig. 2.4 Evolution of renewable and fossil fuel energy consumption (%
of total energy consumption) in Latin America and the
Caribbean (1989–2014). (The authors created this figure using
the World Bank Open Data database (2021)) 11
Fig. 2.5 Energy consumption by source in Central and South America
between 1970 and 2015. Energy consumption is measured in
terawatt-hours (TWh); other renewables include geothermal,
biomass, and waste energy. (The authors created this figure
using Our World in Data (2021) database) 13
Fig. 2.6 Evolution of installed renewable energy capacity (million
kilowatts) from biomass, hydropower, solar, photovoltaic, wind,
wave, and waste in Latin America and the Caribbean from 1989
to 2014. (The authors created this figure using the IEA
database (2018)) 14
ix
x List of Figures
Fig. 2.7 Evolution of trade (% of GDP) in Latin America and the

Caribbean (1989–2014). (The authors created this figure
using the World Bank Open Data database (2021)) 17
Fig. 2.8 Evolution of foreign direct investment (FDI), net inflows per
capita (BoP, current US$) in Latin America and the Caribbean
between 1989 and 2014. (The authors created this figure using
Fig. 2.9 Evolution of exports and imports of goods and services per
capita (BoP, current US$) in Latin America and the Caribbean
between 1989 and 2014. (The authors created this figure using
Fig. 2.10 Evolution of KOF globalisation index de facto (scale from 1 to
100) in Latin America and the Caribbean between 1989 and
2014. (The authors created this figure with the database from
the KOF globalisation index (2021)) 21
Fig. 3.1 Global trends in renewable energy investment between 2004
and 2018. New investment United States Dollar (USD) billion.
(The authors created this figure with the database from the IEA
(2020))28
Fig. 3.2 Summary of causality of the variables. (The authors created this
figure)46
Fig. 3.1a Impulse—response functions from robustness check 53
Fig. 4.1 Energy consumption by energy source in Central and South
America between 1970 and 2015. Energy consumption is
measured in terawatt-hours (TWh); Other renewables include
geothermal, biomass, and waste energy. (The authors created
this figure with the database from Our World in Data (2021)) 64
Fig. 4.2 Evolution of GDP per capita growth (annual %) in Latin
America and the Caribbean (1989–2014). (The authors created
this figure with the database from the World Bank Open Data
(2021))65
and the Caribbean (1989–2014). (The authors created
this figure with the database from the World Bank Open
Data (2021)) 65
Fig. 4.4 Summary of causality of the variables. (The authors created
this figure) 85
Fig. 4.5 Impulse-response functions 87
and the Caribbean (1989–2014). (The authors created this
figure with the World Bank Open Data database (2021)) 102
Fig. 5.2 Granger causality. (Figure created by the authors) 123
List of Figures xi
Fig. 6.1 Summary of the variable’s effect. (The authors created

this figure) 159
Fig. 8.1 Evolution of carbon dioxide emissions (CO2) in Kilotons (Kt)
per capita in Latin America and the Caribbean (1989–2014).
(The authors created this figure with the database from the
World Bank Open Data (2021)) 200
Fig. 8.2 Evolution of KOF globalisation index de facto (scale from 1 to
100) in Latin America and the Caribbean between 1989 and
2014. (The authors created this figure with the database from
the KOF Globalization Index (2021)) 220
Fig. 8.3 Summary of the impact of globalisation on renewable energy
development. (Adapted from Koengkan et al., 2019) 224
Fig. 8.1a Impulse-response functions from complementary robustness
check233
List of Tables
Table 3.1 Variance inflation factor (VIF) and cross-section

dependence (CSD) tests 39
Table 3.2 Second-generation unit root test (CIPS test) 40
Table 3.3 Hausman test 41
Table 3.4 Specification tests 42
Table 3.5 Model estimation 42
Table 3.6 Model estimation corrected 44
Table 3.7 Results of PVAR from robustness check 45
Table 3.8 Panel Granger causality Wald test from robustness check 46
Table 3.1a Variables’ description statistics 51
Table 3.2a Westerlund cointegration test between LnGDP and
LnKPUBLIC51
Table 3.3a Hausman test 51
Table 3.4a Heterogeneous estimators 51
Table 3.5a PVAR lag-order selection from robustness check 52
Table 3.6a Eigenvalue stability condition from robustness check 52
Table 3.7a Forecast-error variance decomposition from robustness
check52
Table 4.1 Descriptive statistics 78
Table 4.2 VIF test and CSD test 81
Table 4.3 Unit root test 82
Table 4.5 PVAR lag-order selection 83
Table 4.6 PVAR model outcomes 83
Table 4.7 Panel Granger causality Wald test 84
Table 4.8 Eigenvalue stability condition 85
xiii
xiv List of Tables
Table 4.9 Forecast-error variance decomposition 86

Table 5.1 Definition and sources of variables 111
Table 5.2 Descriptive statistics and CSD test 116
Table 5.3 VIF test 117
Table 5.6 Estimation results of the PARDL model 119
Table 5.7 Short-run impacts, elasticities, and adjustment speed of the
PARDL model 120
Table 5.8 Estimation results of the PARDL model 121
Table 5.9 Semi-elasticities, elasticities, and adjustment speed of the
PARDL model 122
Table 5.10 Granger causality Wald test 123
Table 6.1 Authors who identified a positive impact of trade openness
or its proxy on the consumption of energy 142
Table 6.2 Authors who identified the negative impact of trade
openness or its proxy on the consumption of energy 143
Table 6.3 Summary statistics of variables 147
Table 6.4 Applications of PARDL models in the literature 148
Table 6.5 Preliminary and specification tests 149
Table 6.6 VIF and CSD tests 151
Table 6.10 PARDL Model estimation controlling by shocks 155
Table 6.11 Hausman test from robustness check 156
Table 6.12 Specification tests from robustness check 156
Table 6.13 PNARDL model estimation controlling by shocks from
robustness check 157
Table 7.1 Summary of literature 177
Table 7.2 Description of the variables and descriptive statistics 181
Table 7.3 VIF test and CSD test 184
Table 7.4 Unit root tests 184
Table 7.6 Results of Westerlund cointegration tests 186
Table 7.7 Heterogeneous estimators and Hausman tests 187
Table 7.9 Estimations results 188
Table 7.10 Estimation results with dummy variables 189
Table 8.1 Summary statistics of variables 206
Table 8.2 Correlation matrix 210
Table 8.3 VIF and CSD tests 211
List of Tables xv

Table 8.6 Heterogeneous estimators 213
Table 8.9 Elasticities, short-run impacts, elasticities, and adjustment
speed (controlling for shocks) 215
Table 8.10 Summary statistics of variables from robustness check 221
Table 8.11 Specification tests from robustness check 222
Table 8.12 Elasticities, short-run impacts, elasticities, and adjustment
speed (controlling for shocks) from robustness check 223
Table 8.1a Correlation matrix from robustness check 228
Table 8.2a VIF and CSD tests from robustness check 229
Table 8.3a Unit root test from robustness check 229
Table 8.4a Hausman test from robustness check 230
Table 8.5a Summary statistics of variables from complementary
Table 8.6a Correlation matrix from complementary robustness check 230
Table 8.7a VIF and CSD tests from complementary robustness check 231
Table 8.8a Unit root test from complementary robustness check 231
Table 8.9a Hausman test from complementary robustness check 231
Table 8.10a PVAR lag-order selection from complementary robustness
check232
Table 8.11a PVAR model outcomes from complementary robustness
check232
Table 8.12a Eigenvalue stability condition from complementary
Table 8.13a Forecast-error variance decomposition from complementary
CHAPTER 1
Introduction
The process of renewable energy transition followed the same trend as the
globalisation process, where according to IEA (2018) the installed capac-
ity of renewable energy from biomass, hydropower, solar, photovoltaic,
wind, wave, and waste in a million kilowatts was 12,935 (million kilo-
watts) in 1989 and reached a value of 38,648 (million kilowatts) in 2014.
Indeed, the increase in renewable energy exerts a positive effect on the
environment by reducing carbon dioxide emissions (CO2) from the con-
sumption of fossil fuels that are responsible for environmental degrada-
tion, global warming, and climate change (Fuinhas et al., 2021; Koengkan
et al., 2019d).
The evidence that the renewable energy transition followed the same
trend of the globalisation process in the Latin American and Caribbean
(LAC) region, as mentioned before, motivated the investigation of the
central question of this book: Is the process of the renewable energy tran-
sition in the LAC countries influenced positively by globalisation? In the
literature, the effect of globalisation on renewable energy transition
remains underexplored. Koengkan et al. (2019a) point out that the cur-
rent literature has focused on understanding the influence or effect of
globalisation on a specific industry or national level and has left aside the
way in which globalisation impacts progress in renewable energy. The glo-
balisation literature includes a diversity of sub-topics: economics, energy,
© The Author(s), under exclusive license to Springer Nature 1

Switzerland AG 2022
M. Koengkan, J. A. Fuinhas, Globalisation and Energy Transition in
Latin America and the Caribbean,
https://doi.org/10.1007/978-3-031-13885-0_1
2 M. KOENGKAN AND J. A. FUINHAS
culture, social relations, politics, migration, and technology (Overland,

2016). However, the specific topic of renewable energy is missing in the
globalisation literature (Koengkan et al., 2019a).
There is also a lack of studies on this topic in the energy economics
literature, although the conclusions about the link between energy and
globalisation are not recent (Koengkan et al., 2019a). Indeed, Sovacool
(2014), with their seminal work, investigated the state of the art of energy
studies and recognised that there is a gap in the literature about the rela-
tionship between globalisation and renewable energy. As mentioned by
Overland (2016), the existing literature about energy and globalisation is
vast. However, few studies exist in the literature that specifically approach
globalisation and renewable energy transition.
Of these studies in the literature that investigated this topic, few have
explained the effect of globalisation or their proxies (e.g., foreign direct
investments (FDI), trade openness, trade liberalisation, financial develop-
ment, financial openness, financial liberalisation, KOF globalisation index,
exports and imports) on renewable energy or their proxies (e.g., installed
capacity, consumption and production of renewable energy sources, and
also renewable energy technologies) (e.g., Koengkan et al., 2019a;
Mazzucato & Semieniuk, 2018; Roubaud & Shahbaz, 2018; Koengkan,
2018; Bosupeng, 2017; Koengkan, 2017; Kim & Park, 2016; Dogan &
Deger, 2016; Al-Mulali & Ozturk, 2015; Sbia et al., 2014; Rodríguez
et al., 2014; Sadorsk, 2012; Dong, 2012; Jenner et al., 2013). These stud-
ies are part of a big puzzle about this topic that must be assembled to
explain this phenomenon. However, this puzzle has missing pieces related
to the lack of explanations about the impact of globalisation on renewable
energy progress and its effects on environmental degradation.
In order to answer the central question of this book and contribute to
the construction of this puzzle around this topic, some specific questions
were posed. Those questions were based on three interconnected aspects
related to renewable energy transition (e.g., investment, consumption of
energy, and environmental degradation).
The main objective is to identify the positive effect of globalisation on
renewable energy transition in LAC countries. However, it is necessary to
make an in-depth analysis of three aspects through empirical studies and a
literature review to identify this positive effect. This analysis is based on
four specific questions created from three aspects. Beyond the main objec-
tive, this book has four specific objectives that will allow the main objec-
tive to be achieved and will contribute to the construction of this puzzle
1 INTRODUCTION 3
about this topic. Therefore, the first specific objective of this book is to
assess the positive effect of financial openness on renewable energy invest-
ment diffusion in Latin American countries. The second is to assess the
positive effect of globalisation in interactions between renewable energy
consumption and economic growth and the negative effect of globalisa-
tion and renewable energy on the consumption of fossil fuels in the
Mercosur countries. Third, the positive reaction of the consumption of
fossil fuels to trade openness and negative reaction from renewable energy
consumption in LAC countries will be assessed, and results from the prior
analysis will be extended and confirmed. Fourth is to assess the negative
effect of the renewable energy transition on environmental degradation in
the LAC countries and extend and confirm some results from the prior
analysis. Moreover, these four specific questions gave rise to four empirical
essays that will answer each specific question and the central question of
this book.
The motivation that promotes the realisation of this book is related to
the process of globalisation of LAC countries that have been represented
by numerous integration associations, trade blocs, free trade agreements,
and trade and financial and economic liberalisation that have grown in the
last 30 years. This process of integration and openness with the rest of the
world is a potential factor that induces higher economic growth and, con-
sequently, energy consumption and environmental degradation.
However, the LAC countries have adopted mechanisms to reduce the
consumption of non-renewable energy and CO2 emissions caused indi-
rectly by globalisation. For this reason, it is necessary to understand how
this same globalisation interacts with these mechanisms—in other words,
“renewable energy transition”. That is, to show that globalisation can help
the economic transition from one based on hydrocarbon consumption to
one based on renewable energy sources and their contribution in reducing
environmental degradation.
The realisation of this book becomes stronger in a moment that protec-
tionist and anti-globalisation movements have been growing significantly
in the entire world, beginning in the 1990s and intensifying after the
global financial crisis that occurred in 2007–2008. Moreover, in the last
years, the role of globalisation and its impact on related issues, such as
energy, environment, income, and inequality, have been discussed in sev-
eral international forums and initiatives, for example, G20 (Group of
Twenty) Buenos Aires summit 2018, World Economic Forum Annual
Meeting 2018 in Davos, and COP26 (2021 United Nations Climate

Change Conference) in Glasgow in 2021.
This book uses well-established and relatively new methodological
approaches to produce innovative and relevant empirical analysis in all
three aspects considered. This book contributes to energy economics,
environmental economics, and globalisation literature with four inter-
related essays on renewable energy transition and globalisation. Moreover,
this book adds knowledge to specific streams of energy economics, envi-
ronmental economics, and globalisation literature explored in the seven
chapters.
Acknowledgements Governance, Competitiveness and Public Policy

(GOVCOPP) UIDB/04058/2020 and UIDP/04058/2020, funded by national
funds through FCT—Fundação para a Ciência e a Tecno-logia; and the CeBER
R&D unit, funded by national funds through FCT—Fundação para a Ciência e a
Tecnologia, I.P., project UIDB/05037/2020.
Funding This work was financially supported by the research unit on

Governance, Competitiveness and Public Policy (GOVCOPP),
UIDB/04058/2020 and UIDP/04058/2020, funded by national funds
through FCT—Fundação para a Ciência e a Tecnologia; and by the
CeBER R&D unit, funded by national funds through FCT—Fundação
para a Ciência e a Tecnologia, I.P., project UIDB/05037/2020.
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CHAPTER 2
Renewable Energy Transition

and Globalisation in the Latin American
and Caribbean Region: A Five-Decade
Picture
2.1 Introduction
This book arises as the renewable energy transition has accelerated and
become a policy arena, that is, an area of concern for many governments.
Energy transition does not occur in a vacuum, and it was shaped and influ-
enced over time by a broader, deep shift. The energy transition is not just
about energy or a change in energy sources or simply replacing technology
with other more efficient means. It is a paradigm shift that has been chang-
ing profoundly in the energy world, where there exists a change in the
values of security, robustness, and reliability. Therefore, the existing energy
systems rooted in these values have been replaced by new systems based
on sustainability, affordability, and flexibility, allowing new ways of pro-
ducing and consuming energy (Fuinhas et al., 2021a; World Energy
Council, 2019a).
The literature does not offer a precise definition for “energy transi-
tion”. Smil (2010) points out that the expression does not have a precise
or widely accepted meaning. However, it is often used to describe changes
in the energy matrix from fossil to renewable sources. This change has
been taking place progressively from an established energy system (fossil)
to a new one (renewable). Such a transition can be analysed from a global

Switzerland AG 2022
https://doi.org/10.1007/978-3-031-13885-0_2
perspective or a local one. Hauff et al. (2014) have used the “energy tran-
sition” term as a structural transformation in the energy sector, indicating
a growing trend of the share of green energy sources combined with the
promotion of energy efficiency to reduce fossil fuel energy consumption.
In this sense, it gives a clear objective of reducing environmental degrada-
tion. However, this definition is misinterpreted, reducing the conceptual
scope of the term by emphasising one type of change, namely, that from
non-renewable energy sources to renewable ones. Thus, there is no single
energy transition but rather various local experiences.
Indeed, the green energy transition and energy efficiency have been the
two main international action priorities to mitigate the effects of climate
change (Fuinhas et al., 2021b; World Energy Council Report, 2019b).
The two are related to the uncontrolled increase in the level of carbon
dioxide emissions (CO2) that consequently have set off a worldwide alarm
signal (Fuinhas et al., 2017). This increase is contributed significantly to
greenhouse gas emissions (GHGs) and, consequently, global warming and
climate change (Koengkan et al., 2019a). Indeed, carbon dioxide contrib-
utes to 77% of greenhouse gases that contribute to climate change, while
methane contributes to 14% and nitrous oxide 8% (Khan et al., 2014).
The global GHGs, mainly the CO2 emissions, have increased since the
1970s (IPCC, 2014). However, these emissions grew the most rapidly
between 1990 and 2014, from 33 megatons of CO2 equivalent (MtCO2eq)
in 1990 to 48 MtCO2eq in 2014, an increase of 1.5% during this period
(Bárcena et al., 2019). Bárcena et al. (2019) point out that 78% of this
increase is related to the consumption of non-renewable energy sources
(69%) and industrial processes (9%). Khan et al. (2014) confirm this affir-
mation, indicating that most of these emissions emanate from the residen-
tial and industrial sectors and directly from energy consumption. GHGs
take place through direct emissions from the consumption of non-green
energy sources for power, heating, and cooking.
In Latin America and the Caribbean (LAC) region, the situation is no
different from that of the rest of the world. GHGs had an increase of 0.7%
between 1990 and 2014 (from 3414 MtCO2eq in 1990 to 4020
MtCO2eq in 2014). Indeed, this increase is related to change in land use
and forestry (35%) and energy consumption (35%) (e.g., Fuinhas et al.,
2021c; Bárcena et al., 2019). This has also been found by Koengkan et al.
(2019a), where in the LAC region, liquid fuels account for 60.8% of total
CO2 emissions. However, coal is only a modest contributor, with 7.6%
in 2013.
2 RENEWABLE ENERGY TRANSITION AND GLOBALISATION IN THE LATIN… 9
Regarding the structure of GHGs in the LAC region, the energy sector
had participation of 28% in 1990, with change in land use and forestry at
45%, agriculture 21%, industrial processes 2%, waste 4%, and boiler fuels
1%, while in 2014 the consumption of energy had participation of 46%,
agriculture 23%, changes in land use and forestry 19%, industrial processes
4%, waste 6%, and boiler fuels 2% (Bárcena et al., 2019). Thus, despite the
growth in emissions between 1990 and 2014, the region is a minor con-
tributor per capita to the world’s GHG, accounting for about 11% of total
global emissions (Fuinhas et al., 2017).
This increase of GHGs in the LAC region is directly related to eco-
nomic growth in the region, and the latter increases the consumption of
energy and, consequently, emissions. According to World Bank Open
Data (2021), the LAC’s GDP per capita growth (annual %) had an average
annual rate of approximately 1.44% between 1989 and 2014 (see Fig. 2.1).
In 1989 the GDP per capita (current US$) was US$2319.10, and in
2014 it was US$10,405.50 (see Fig. 2.2).
In the Latin American and Caribbean region, the increase of GDP per
capita is related to adopting structural and stabilisation programmes
imposed by the International Monetary Fund (IMF). These adjustment
programmes are neoliberal policies that consist mainly of opening their
6
5
4
3
Annual growth (%)
2
1
0
1997
1989
1990
1991
1992
1993
1994
1995
1996
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
–1
–2
–3
–4
Fig. 2.1 Evolution of GDP per capita growth (annual %) in Latin America and
the Caribbean (1989–2014). (The authors created this figure using the World
Bank Open Data database (2021))
$12,000
Per capita current (US$)
$10,000
$8000
$6000
$4000
$2000
$0
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
Fig. 2.2 Evolution of GDP per capita (current US$) in Latin America and the
Caribbean (1989–2014). (The authors created this figure using the World Bank
Open Data database (2021))
economies to international capital and trade, deregulation of the econ-

omy, privatisation, reducing public expenditure, and creating appropriate
conditions for foreign investment (Ahumada & Andrews, 1998). The
“commodity boom” that occurred between 2004 and 2014 also acceler-
ated the integration of LAC economies with the rest of the world and the
economic growth in the region (Carneiro, 2012).
Indeed, the energy consumption followed the same trend of GDP per
capita growth, where, according to World Bank Open Data (2021), elec-
tric power consumption (kWh per capita) was 1175.35 (kWh per capita)
in 1989, and in 2014 the consumption had reached 2155.70 (kWh per
capita) (see Fig. 2.3).
Balza et al. (2016) point out that the total energy consumption
increased from 190 million tonnes of oil equivalent (MTOE) in 1971 to
610 MTOE in 2013, which is 220% higher than in the early 1970s and
represented an average annual growth rate of 2.8%. Indeed, the industrial
and transport sector accounted for more than 302 MTOE of this increase.
Balza et al. (2016) added that the transport sector has the largest share of
energy use, increasing by around 3.5% and reaching 210 MTOE in 2013.
Energy consumption in the industrial sector followed and grew 3%
between 1971 and 2013. However, due to access to more efficient energy
sources, the residential sector’s share of the total final consumption
dropped from 29% in 1971 to less than 17% in 2013. The indication that
economic growth in the LAC region increases the consumption of energy
2500
2000
kWh per capita
1500
1000
500
0
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
Fig. 2.3 Evolution of electric power consumption (kWh per capita) in Latin
America and the Caribbean (1989–2014). (The authors created this figure using
the World Bank Open Data database (2021))
(%) of total energy consumption
120
100
80
60
40
20
0
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
Fossil fuel energy consumption Renewable energy consumption
Fig. 2.4 Evolution of renewable and fossil fuel energy consumption (% of total
energy consumption) in Latin America and the Caribbean (1989–2014). (The
authors created this figure using the World Bank Open Data database (2021))
was found by Koengkan et al. (2019a) where, between 1971 and 2013,
the gross domestic product (GDP) from the LAC countries had an aver-
age annual growth rate of approximately 3.0%, while energy consumption
grew about 5.4%. In 1989, 70.84% of this energy consumption came from
fossil fuel energy sources, and in 2014 this value reached 73.3% of the
total energy consumption (see Fig. 2.4).
All this clarified how important it was for the energy sector to create
initiatives to mitigate these emissions. Therefore, energy planning must
consider a climate change scenario, where additional efforts are directed to
limiting emissions from the energy sector, especially in developing coun-
tries such as the LAC countries, where there are expectations of an increase
in energy consumption. Indeed, renewable energy transition energy is a
part of the solution that will play an essential role in mitigating energy
consumption from non-renewable energy sources responsible for GHG
emissions, environmental degradation, and global climate changes.
2.2 Energy Transition in the LAC Region

In the LAC region, the green energy transition began in the 1970s in
Brazil, with the Proalcool programme, which was started in 1975 after the
first oil shock in 1973 (Gielen et al., 2019). This programme is a mix of
policy instruments that evolve and are mainly used to substitute imported
petroleum and address the needs of both supply and demand sides (Fuinhas
et al., 2021d; Gielen et al., 2019; Koengkan, 2017; Solomon & Krishna,
2011). Moreover, this programme drives biomass-based ethanol demand,
but the sector’s long-term success continues to be impacted by economic
cycles and changing government priorities (Gielen et al., 2019). Other
initiatives of green energy transition arose in the region in the same decade,
such as the geothermal programme in Costa Rica in 1976 and Nicaragua
in 1977 (Fuinhas et al., 2017); the development of large hydropower in
Brazil and Paraguay in 1971–1984 with binational Itaípu dam and other
small hydro projects (Flavin et al., 2014); Argentina with biomass, biogas,
hydropower plants, geothermal, wind, wave, and photovoltaic plants in
1998; and in Venezuela with hydropower plants in 2001 (Koengkan
et al., 2019c).
The Latin American region has the largest share of hydroelectricity over
the total electricity generation globally, with hydroelectricity representing
55% of the energy mix, a sizable proportion compared with the world
average of 17% (Koengkan et al., 2018). Flavin et al. (2014) point out that
in the 1970s, hydroelectricity (e.g., small and large hydro) in the total
electricity generation in the region was 55%; in the 1990s, this increased
to 67%, and in 2013 it decreased to 51%. However, the share of electricity
from hydro has declined since the end of the 1990s due to the develop-
ment of other green energy sources (e.g., geothermal, solar, small hydro,
wind, waste, and marine) (Flavin et al., 2014).
100%
90%
80%
70%
60%
(%) of total
50%
40%
30%
20%
10%
0%
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
Oil Coal Gas
Hydropower Nuclear Wind
Solar Other renewables
Fig. 2.5 Energy consumption by source in Central and South America between
1970 and 2015. Energy consumption is measured in terawatt-hours (TWh); other
renewables include geothermal, biomass, and waste energy. (The authors created
this figure using Our World in Data (2021) database)
New renewable energy sources underwent rapid growth from the end
of the 1990s, but in 2015 comprised only 3.44% of the total installed
power capacity in the LAC region, with wind contributing 1.02%, solar
0.09%, and other renewables 2.33% (see Fig. 2.5).
Moreover, the installed capacity of green energy sources more than
doubled between 2006 and 2012, where the installed capacity in 2006
was 11.3 gigawatts (GW) and in 2012 reached 26.6 GW (see Fig. 2.6).
This increase was driven by biomass and waste that make up most of
this growth and the significant development of small hydro and wind
(Flavin et al., 2014). Indeed, this increase results from high levels of
investment made in green energy sources, which in 2005 was US$4.6 bil-
lion and in 2015 reached US$16.4 billion (IRENA, 2016). In this period,
investment in renewable energy sources grew 13% between the 2000s and
2013 (Koengkan et al., 2019c). Moreover, renewable energy
45
40
35
Million Kilowatts
30
25
20
15
10
5
0
2005
1989
1991
1993
1995
1997
1999
2001
2003
2007
2009
2011
2013
Fig. 2.6 Evolution of installed renewable energy capacity (million kilowatts)
from biomass, hydropower, solar, photovoltaic, wind, wave, and waste in Latin
America and the Caribbean from 1989 to 2014. (The authors created this figure
using the IEA database (2018))
consumption in the LAC region was 32.43% of the total energy consump-
tion in 1990 and in 2014 reached a value of 27.08% (see Fig. 2.4).
This rapid expansion of green energy sources in the LAC region is asso-
ciated with the fast process of globalisation in the region that positively
impacts economic growth and consequently increases energy demand.
Therefore, new investments in green energy technologies are necessary
(Santiago et al., 2022; Koengkan et al., 2019c). Moreover, globalisation
has facilitated access to technological advances via trade and financial lib-
eralisation and contributes to the region’s increase in renewable energy
capacity (Koengkan et al., 2019a). In particular, financial development
increases capital stock and reduces the cost of financing, facilitating invest-
ment in renewable energy technologies (Koengkan et al., 2019a;
Mazzucato & Semieniuk, 2018; Kim & Park, 2016; Sbia et al., 2014).
This reduction in costs is one of the driving forces that encourage invest-
ment in renewable energy sources in recent years and has caused a signifi-
cant reduction in their costs (Griffith-Jones et al., 2017).
Furthermore, Mazzucato and Semieniuk (2018) indicate that financial
development increases public and private capital stocks. However, they
conclude that only public capital can promote renewable energy
investment, as the private sector is more risk-averse in this context. Public

policies have not been capable of mobilising the private sector.
Additionally, trade openness allows developing countries to import
from developed countries more energy-saving technologies that consume
less energy. In developing countries, the reduction of energy consumption
is more visible than in developed countries because developing countries
have a greater capacity to absorb transferred technologies than developed
ones (Ghani, 2012). Economic integration in Latin American countries
allows access to new energy technologies, which are then adopted in their
industries. However, this technology transfer to green energy in the Latin
American region depends on the production and absorption capacity and
the path dependency of significant investment in new technologies
(Koengkan et al., 2019a).
This abovementioned globalisation is defined by Dreher (2006,
p. 1092) as:
The process of creating networks of connections among actors at multicon-

tinental distances, mediated through various flows including goods, capital,
people, information and ideas. Moreover, this process erodes national
boundaries, integrates national economies, cultures, technologies, gover-
nance, and consequently produces a complex relation of mutual
interdependence.
Based on Dreher’s definition (2006), it can be understood that globali-

sation has some dimensions, such as economic, social, and political.
Indeed, the globalisation that we see today reflects the intensity of contact
of these dimensions at such large distances.
Scholte (2008, p. 1473) has suggested that globalisation differs from
similar concepts (e.g., internationalisation, liberalisation, universalisation,
or Westernisation). Internationalisation refers to increased transactions
and interdependencies between countries or nations (Gygli et al., 2019).
Scholte (2008, pp. 1473–1474) adds that a more global world means
more investments, money, merchandise, ideas, messages, pollutants, and
people crossing borders between national-state-territorial units.
Liberalisation is the process of removing officially imposed restrictions on
movements of resources between countries or nations (Gygli et al., 2019).
This explanation agrees with Scholte’s (2008, pp. 1473–1474) vision,
where globalisation occurs as authorities reduce or abolish regulatory
measures such as foreign exchange restrictions, trade barriers, visa require-

ments, and capital controls.
Universalisation is the dispersing of various objects and experiences to
all people in the world (Gygli et al., 2019). Scholte (2008, p. 1476)
explains that “global” means “worldwide” and “everywhere”. Therefore,
there is a worldwide “universalisation” of culture, economy, and politics.
Moreover, Westernisation is interpreted as a type of universalisation, in
which the social structures of Western societies are spread worldwide and
destroy pre-existent cultures and local self-determination (Gygli et al.,
2019). Scholte (2008, p. 1477) complements Westernisation with coloni-
sation, Americanisation, and “westoxification”. Although all these con-
cepts are close to each other and occasionally used interchangeably, it is
difficult to achieve a clear and simple concept that could be helpful. For
this reason, we agree with the explanation of Figge and Martens (2014,
p. 878) that the distinction of all these concepts is not necessary when a
multiscalar and pluralistic concept of globalisation is used.
2.3 Globalisation in the LAC Region

In the LAC region, this process of globalisation began with the trade and
financial liberalisation in the 1970s in Chile, with the profound shift
towards free-market economies during the Pinochet dictatorship
(Ahumada & Andrews, 1998). On the other hand, in many other coun-
tries from the region, the implementation of the neoliberal economic
model took place during the process of the “Washington Consensus”, a
combination of measures to promote the “macroeconomic adjustment”
and by the “Brady Plan”, an external debt restructuring plan (Koengkan
et al., 2019b). This adjustment occurred between 1989 and 1992, when
Costa Rica and Mexico passed schemes of in-depth trade and financial
liberalisation in 1989, Venezuela (RB) in 1990, Uruguay in 1991,
Argentina in 1992, and Brazil in 1992, with the development of economic
stabilisation programmes that include, for example, privatisations, finan-
cial and trade liberalisation, and reduction of import barriers (Aizenman,
2005; Vásquez, 1996). These schemes were developed to put the LAC
economies “back on track” (Koengkan et al., 2019b).
Indeed, before this adjustment, the average annual compound growth
rate was approximately −0.5% between 1980 and 1989. After “macroeco-
nomic adjustment”, the LAC’s GDP per capita had an average annual
compound growth rate of 2.2% between 1989 and 1994 (Hofman, 2000,
p. 32). In the 1990s, as mentioned before, the LAC region grew and was
integrated into the world. Indeed, in the first half of the 1990s, most LAC
countries adopted unilateral opening policies (e.g., reducing their tariffs
and eliminating other trade restrictions). Moreover, several regional agree-
ments within the framework of Asociación Latinoamericana de Integración
(ALADI) were strengthened in this period. For example, Mexico joined
the North American Free Trade Agreement (NAFTA), and the Common
Market of the South (Mercosur) was created. Between 1990 and 1999,
LAC imports grew at an average rate of 11%, while its exports increased at
an average rate of 8.1%, improving its share in world trade (Terra, 2003,
p. 138). Hence, trade in the LAC region in the 1990s was characterised by
growth with much higher rates of imports than exports. It should be
recalled that imports had been drastically reduced in the wake of the debt
crisis that followed the Mexican financial crisis of 1982 (Ventura-Dias
et al., 1999, p. 20). Then, imports had a vital role in modernising the
production process. The modern machines and better industrial inputs
contributed to the technological upgrading of the industrial basis in the
region (Ventura-Dias et al., 1999). Moreover, in 1989, the trade (% of
GDP) in the region was 31.7% and, at the end of 2003, reached a value of
(42.8%), an increase of 35.01% between 1989 and 2003 (see Fig. 2.7).
50
40
Trade (% of GDP)
30
20
10
0
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
Fig. 2.7 Evolution of trade (% of GDP) in Latin America and the Caribbean
(1989–2014). (The authors created this figure using the World Bank Open Data
database (2021))
Financial liberalisation in the LAC region followed the same trade lib-
eralisation, with the resumption of capital inflow in the LAC region after
the Brady plan in the early 1990s. The magnitude of the financial liberali-
sation in the LAC region can be grasped with the index of capital mobility.
In the 1980s, the index capital mobility was 40 and in the 1990s rose to
about 75, normalising completely free capital mobility at 100 (Aizenman,
2005, p. 4). Moreover, the financial liberalisation caused by the Brady plan
promoted the entrance of flows of foreign direct investments (FDI). As a
result, FDI flows worldwide grew dramatically between 1990 and 1997.
Indeed, the developing countries received the most of these flows, where
their share of these flows was 15% in 1990 and reached a value of 38% in
1997. Latin America was no different; these flows increased from US$8
billion in 1988 to US$55.3 billion in 1997 (Birch & Halton, 2008). The
increase of FDI flows in the region aligns with Fig. 2.8, where these flows
were US$18 billion in 1989 and reached a value of US$93 billion in 2003.
The FDI inflows to the LAC region in the 1990s evolved in three
phases (Birch & Halton, 2008, p. 18). First, between 1990 and 1993, the
investors favour acquiring already existing assets. However, between 1994
and 1996, most investments were directed to large-scale projects via
restructuring of existing foreign firms or modernising recently privatised
firms. Finally, in 1997, acquiring existing assets to consolidate the market
700
600
BoP, current (US$)
500
400
300
200
100
0
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
Fig. 2.8 Evolution of foreign direct investment (FDI), net inflows per capita
(BoP, current US$) in Latin America and the Caribbean between 1989 and 2014.
(The authors created this figure using the World Bank Open Data database (2021))
power became the most common form of foreign investment in the region.
As a result, more money was spent purchasing existing private assets than
privatisation.
Moreover, during the 1990s, the LAC region had registered an increase
in FDI in industries related to natural resources and the energy sector
(Koengkan, 2018; Birch & Halton, 2008, pp. 18–20). For example, in
Argentina between 1990 and 1996, the energy sector, gas, and the water
industry were the leading FDI recipients in the country, receiving 26%;
the petroleum and natural gas industry received 15%, the chemical prod-
ucts industry sector 11%, and food, beverages, and tobacco and financial
services, each with 10%; in Brazil in 1990, the chemical industry accounted
for 14%, falling to 11% in 1995. Between 1996 and 1997, the electricity,
water, and gas investments soared 23% of the total FDI inflows, mainly
due to privatisation over the last three years. The financial sector accounted
for 10%, reflecting the restructuring of the Brazilian banking system; Chile
accounted for 47% of the total FDI inflows between 1974 and 1996 in the
mining and quarrying sector. Other services received 25%, while manufac-
turing received 16% of all inflows between 1990 and 1996. The energy,
gas, and water sector soared from a 3% share between 1990 and 1996 and
reached 27% in 1997. This change is due largely to the acquisition of part
of the Chilean electric company Enersis by the Spanish company Endesa-
España; Mexico received 49% of inflows between 1981 and 1993, which
was evenly divided between the manufacturing and services sector.
Indeed, between 1994 and 1996, the machinery and equipment sector
received 24% of these inflows, reflecting the substantial investment in the
automotive, electronics, and electrical equipment industries. The food,
beverages, and tobacco sector received 12%, the finance and insurance sec-
tor 11%, and other services 10% of these inflows. In 1997, food, bever-
ages, and tobacco received 36% of these inflows. Indeed, the entrance of
these FDI inflows during the 1980s–1990s for the energy sector in Latin
America reduced the high investment and maintenance costs of renewable
energy projects via public-private partnerships (PPP) to narrow the gap in
financing (Coviello et al., 2012). The reduction of these costs increased
electricity generation from renewable energy plants. Electricity generation
from small and large hydro dams in the LAC region was 55% in the 1970s
and reached 67% in the 1990s, as Flavin et al. (2014) mentioned.
However, this process of globalisation that began in the 1970s with
trade and financial liberalisation intensified with a “commodities boom”
that occurred between 2004 and 2014, whereby the region had an
average growth rate of 7.40% (Santos, 2015). According to Carneiro

(2012), the cycle of commodity prices in Latin American economies
impacted positively economic openness or, more precisely, the degree of
dependence of external demand vis-à-vis domestic demand or markets.
Moreover, the same author adds that the degree of economic openness
was 28.6 between 1990 and 1993, 38.5 between 1998 and 2001, and
44.7 on a scale of 0–100, where 100 represents an open economy, between
2006 and 2009. Thus, between 1990 and 2009, the degree of economic
openness grew by 50.71%.
Furthermore, this fact seems to have allowed the region to surpass the
2008–2009 financial crisis (Koengkan et al., 2019b). Indeed, the growth
in the level of economic openness was caused by an increase in the exports
and imports in the region, where in 2004, the exports of goods and ser-
vices (BoP current US$) was US$1091.28 and reached a value of US$
2218.43 in 2014, while the imports were US$983.47 in 2004 and reached
a value of US$2348.50 in 2014 (see Fig. 2.9).
Furthermore, the increase in FDI inflows, which was US$193 billion
(World Bank Open Data, 2021) in 2004, reached the value of US$420
billion in 2014. Indeed, according to ECLAC (2018), the commodities
5000
4500
4000
BoP, current (US$)
3500
3000
2500
2000
1500
1000
500
0
1991
2007
1989
1993
1995
1997
1999
2001
2003
2005
2009
2011
2013
Imports of goods and services per capita (BoP, current US$)

Exports of goods and services per capita (BoP, current US$)
Fig. 2.9 Evolution of exports and imports of goods and services per capita (BoP,
current US$) in Latin America and the Caribbean between 1989 and 2014. (The
authors created this figure using the World Bank Open Data database (2021))
boom was responsible for the growth in the manufacturing sector that led
to FDI inflows into the largest economies in the region, with 61% of total
FDI inflows in Mexico and 38% in Brazil. The green energy sector received
5% of these FDI inflows from 2005 to 2007. However, from 2015 to
2017, this sector was the main recipient of new FDI inflows, receiving 26%
of these inflows. The investments in new renewable energy, domestic and
foreign, reached US$6.2 billion each in Brazil and Mexico in 2017,
US$1.8 billion in Argentina, and US$1.5 billion in Chile. Indeed, most
projects in these countries involved investments in solar (35%) and wind
(32%) technology between 2005 and 2017.
These two phases in the insertion of LAC economies between 1989
and 1992 and 2004 to 2014 influenced the degree of globalisation of the
region’s economies. For example, the KOF globalisation index (2021),
created by Dreher (2006) to measure globalisation based on economic,
social, and political dimensions on a scale from 1 to 100, where 100 indi-
cates a globalised country, indicates that in 1989 the degree of de facto
globalisation in the LAC region was 43.80, and reached a value of 60.5 in
2014, an increase of 38.12% between 1989 and 2014 (see Fig. 2.10).
Moreover, as can be seen, the process of renewable energy transition
followed the same trend of the globalisation process, where according to
70
60
Scale from 1 to 100
50
40
30
20
10
0
2009
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2011
2013
Fig. 2.10 Evolution of KOF globalisation index de facto (scale from 1 to 100)
in Latin America and the Caribbean between 1989 and 2014. (The authors cre-
ated this figure with the database from the KOF globalisation index (2021))
IEA (2018), the installed capacity of renewable energy from hydro, bio-
mass, photovoltaic, solar, wind, and waste in a million kilowatts was
12,935 million kilowatts in 1989 and reached a value of 38,648 million
kilowatts in 2014. Indeed, the increase in renewable energy exerts a posi-
tive effect on the environment by reducing CO2 emissions from the con-
sumption of fossil fuels that are responsible for environmental degradation,
global warming, and climate change (Koengkan et al., 2019d).
Acknowledgements Governance, Competitiveness and Public Policy

(GOVCOPP) UIDB/04058/2020 and UIDP/04058/2020, funded by national
funds through FCT—Fundação para a Ciência e a Tecno-logia; and the CeBER
R&D unit, funded by national funds through FCT—Fundação para a Ciência e a
Tecnologia, I.P., project UIDB/05037/2020.
Funding This work was financially supported by the research unit on

Governance, Competitiveness and Public Policy (GOVCOPP),
UIDB/04058/2020 and UIDP/04058/2020, funded by national funds
through FCT—Fundação para a Ciência e a Tecnologia; and by the
CeBER R&D unit, funded by national funds through FCT—Fundação
para a Ciência e a Tecnologia, I.P., project UIDB/05037/2020.
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Full-Report.pdf
CHAPTER 3
Does Financial Openness Expand

the Renewable Energy Investment in Latin
American Countries?
3.1 Introduction
Non-renewable resources, such as coal and oil, have long been used as
energy sources and are vital for long-term economic growth. However,
the intensive use of such resources has adverse environmental conse-
quences, fuelling climate change. Therefore, it is crucial to count on reli-
able, affordable, and economically viable renewable energy services (UN
Commission on Sustainable Development, 2007) to achieve sustainable
development without compromising the environment. To this end, finan-
cial funds are required, and thus, financial liberalisation may play a signifi-
cant role. This chapter assesses the impact of financial openness on the
dissemination of renewable energy investment in Latin American countries.
The development of renewable energy sources enhances the diversifica-
tion of the energy matrix and mitigates the consumption of non-renewable
energy resources and CO2 emissions while increasing energy security
(Rifkin, 2011). Improving renewable energy technologies is considered an
ideal solution for achieving sustainable development without degrading
the environment. Therefore, many countries have been promoting the
development of renewable energies.
In Latin America, the process began in the mid-1970s, in Brazil with
hydropower plants in 1973 and biofuels in 1975; in Uruguay and Paraguay
with hydropower plants also in 1973; followed by Argentina with biomass,

Switzerland AG 2022
https://doi.org/10.1007/978-3-031-13885-0_3
biogas, hydropower plants, geothermal, wind, waves, and photovoltaic

plants in 1998; and Venezuela with hydropower plants in 2001 (IRENA,
2016). In Latin America, energy consumption from renewable sources
represented 35% of the total energy consumption in 2013 (Fuinhas et al.,
2021b; Koengkan, 2018), and investment in renewable energy sources
grew by 13% between 2000 and 2013 (see Fig. 3.1).
The increase of investment and consumption of renewable energy is
related to the rapid process of economic growth, financial liberalisation,
and capital stock accumulation resulting from several economic reforms
and political transitions in the last 40 years, which, to some extent, are still
ongoing in the region (Fuinhas et al., 2021c; Koengkan et al., 2019a,
2021; Koengkan & Fuinhas, 2020b). As a result, Latin American coun-
tries’ per capita gross domestic product (GDP) has registered average
annual growth rates of approximately 3.0%. Between 1971 and 2013,
energy consumption grew by approximately 5.4% (Balza et al., 2016). The
consumption of energy has followed a similar path, evolving from a value
350
300
New Investment in USD billion
250
200
150
100
50
0
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Americas (excl. US & Brazil) China

Brazil Europe
Asia and Oceania (excl. China & India) India
Fig. 3.1 Global trends in renewable energy investment between 2004 and 2018.
New investment United States Dollar (USD) billion. (The authors created this
figure with the database from the IEA (2020))
3 DOES FINANCIAL OPENNESS EXPAND THE RENEWABLE ENERGY… 29
of 471.53 (kWh per capita) in 1970 to 2155.70 (kWh per capita) in 2014
(World Bank Open Data, 2021).
Financial liberalisation in Latin America has undergone distinct stages.
In the 1960s, a period of import-substitution industrialisation economic
policies with state control over the financial sector prevailed, leading to
significant financial costs related to the mismanagement of public banks
and atrophied financial systems (La Torre et al., 2012).
The 1980s, a period of economic stagnation and accelerated inflation,
coined “the lost decade”, comprised the 1982–1989 debt crisis (Aizenman,
2005) and witnessed changes in the management of economic policies.
The Brady plan, designed in the US to address Latin America’s debt crisis,
restored the inflow of foreign capital to the region in the early 1990s. In
addition, a set of comprehensive economic reforms were pursued. For
example, Argentina, Brazil, and Mexico introduced economic stabilisation
programmes and initiated trade and financial liberalisation with the priva-
tisation of some state-owned companies (Aizenman, 2005). Adopting
such reforms boosted capital mobility in Latin America (from about 40%
in the 1980s to 75% in the 1990s) (Aizenman, 2005).
These developments motivated the central question of this chapter:
What is the effect of financial openness on renewable energy investment
diffusion in Latin American countries? The more specific issues resulting
from this main interrogation are:
(a) What are the possible explanations for the identified effects?
(b) What is the causality nexus underlying the links between the assessed
variables in Latin American countries?
The impact of financial openness on the installed capacity of renewable

energy will be examined using a dataset comprising ten Latin American
countries from 1980 to 2014 and using a panel autoregressive distributed
lags (PARDL) model in the form of an unrestricted error correction model
(UECM) to answer such questions. In addition, a panel vector autoregres-
sion (PVAR) model and panel Granger causality Wald tests are used as
robustness tests. This chapter is innovative and adds to the literature in
various ways: (a) it considers financial openness as globalisation measures
to identify their effect on the installed; (b) the use of fixed-effects tech-
niques to explain how the interactions of Latin American countries with
the rest of the world act on the development of renewable energy tech-
nologies via financial markets. Of the few investigations that exist, none
approaches the short- and long-run effects of this capacity of renewable

energy aiming at explaining the diffusion of investment in this kind of
source; (c) it uses PARDL in the form of a UECM as a general model, and
a PVAR model and a Panel Granger causality Wald test as robustness
checks; and (d) it focuses on Latin America and investigates a group of
previously considered countries in similar research efforts. Previous assess-
ments have solely studied countries in Asia, the Middle East, and Europe.
Latin America is of interest not only because it was not studied before but
also for its social, political, and economic specificities that may help to
explain the relationships between the variables of interest in this chapter.
Other than its academic interest, our empirical analysis is also helpful for
Latin American policymakers as it may help design effective policies to
promote renewable energy technologies.
After these introductory remarks, the chapter is organised as follows:
Sect. 3.2 reviews the relevant literature; Sect. 3.3 presents the data and the
adopted methodology; the results of the empirical analysis and the robust-
ness checks are presented in Sects. 3.4 and 3.5, respectively, and discussed
in Sect. 3.6; and Sect. 3.7 concludes and debates policy implications.
3.2 Literature Review

The impact of financial openness on the diffusion of renewable energy
investment has not received much attention from researchers. The scarcity
of academic studies impairs understanding of how the two interact. In the
few existing assessments, the choices for the dependent variables have
been the consumption and the production of renewable energy/renew-
able energy technologies. The installed capacity of renewable energy,
whereas financial development, financial flows, and foreign direct invest-
ment (FDI) are examples of independent variables (e.g., Mazzucato &
Semieniuk, 2018; Roubaud & Shahbaz, 2018; Kim & Park, 2016; Sbia
et al., 2014; Rodríguez et al., 2014).
Different proxies have been chosen for investment in renewable ener-
gies, and no consensus has been reached concerning the best choice in this
regard. Concerning financial openness, the proposal of a financial open-
ness index by Chinn and Ito (2008) has increased proxy possibilities.
The absence of studies considering financial openness as a possible
determinant of the diffusion of renewable energy investment leads to con-
sidering proximate analyses when surveying the relevant literature. An
example of this approximation is, for instance, Kim and Park (2016), who
3 DOES FINANCIAL OPENNESS EXPAND THE RENEWABLE ENERGY… 31
investigated the effects of financial development on the expansion of the

renewable energy sector. The authors used ordinary least squares (OLS)
and considered a sample of data comprising 30 countries from 2000 to
2013. They concluded that financial development promotes renewable
energy investment by reducing financing costs and overcoming adverse
selection and moral hazard problems, an impact that is especially relevant
for energies that are more intensive in capital and therefore more depen-
dent on external funds.
Mazzucato and Semieniuk (2018) studied the influence of public and
private financing of renewable energy projects in China, Spain, the United
States (US), and Kenya from 2004 to 2014. Although both sources
appeared relevant, the authors suggested that a finer distinction of funding
suppliers would be needed to understand their importance fully. The study
also pointed out that financing by public investors had played an increas-
ingly significant role in developing renewable energy technologies in the
countries assessed and that it was the sole reason for the growth of asset
financing in that context. In comparison with private investors, public
actors tended to choose higher-risk technologies. Rodríguez et al. (2014)
added that public investment supported renewable energy projects that
failed to attract private financing and that public policies appeared to have
had a small impact on mobilising the financing capacity of the private sector.
Sbia et al. (2014) investigated the impact of FDI, renewable energy,
trade openness, CO2 emissions, and economic growth on energy demand
in the United Arab Emirates. The study covered the period between 1975
and 2011, and the methodologies implemented were autoregressive dis-
tributed lags (ARDL) bounds testing and vector error correction model
(VECM) Granger causality. Results suggested that FDI had a positive
impact on renewable energy consumption via financial development. The
latter boosted public and private capital stocks, decreased financing costs,
and stimulated economic activity and, subsequently, renewable energy
consumption. These results confirm those of Kim and Park (2016).
Other authors, as Koengkan et al. (2018), Shahbaz et al. (2013), and
Islam et al. (2013), concur in defending that reduced financing costs
resulting from financial openness increase households’ purchasing power
and firms’ investment. Both stimulate economic activity and, subsequently,
the consumption of energy. New investment in renewable energy is
required to meet such increased demand. Financial openness, therefore,
exerts an indirect positive impact on the development of renewable
energies.
This review of studies on proximate topics indicates that various ques-

tions are still unanswered. The first and most significant gap in the litera-
ture is the absence of studies addressing the impact of financial openness
on renewable energy investment diffusion. Indeed, apart from the previ-
ously cited analyses, studies focus solely on the effects of financial develop-
ment on energy consumption.
The possible relationship between financial openness and the installed
renewable energy capacity is thus still unexplored. The second identified
gap is the non-consideration of public capital stock as a determinant of the
diffusion of renewable energy. Another gap, which naturally runs from the
small number of empirical analyses, is the limited methodological spec-
trum of existing research. For instance, the ARDL approach in the form
of the UECM model was not previously considered. Moreover, studies
that directly approached this topic made it impossible to raise hypotheses
regarding the relationship between financial openness and installed renew-
able energy capacity.
There is also a lack of robustness procedures, such as using a PVAR
model and panel Granger causality Wald test, which are especially appro-
priate in this context. Indeed, in Sect. 3.3.1, we will detail the use of
PVAR models to the realisation of the robustness check. Finally, research-
ers have mainly focused on Asia, Europe, and the Middle East, disregard-
ing Latin American countries. There are, hence, various reasons justifying
the interest of the empirical assessment developed in the following sections.
3.3 Method and Data

Section 3.3 is divided into two parts: the first describes the adopted meth-
odological strategy, and the second presents the data, and the variables
used to search for answers to our research questions.
3.3.1 Method
The PARDL model, in the form of a UECM, is used to decompose the
total effects of the variables into their short- and long-run components
(Koengkan et al., 2019a, d). This model was developed by Granger (1981)
and by Engle and Granger (1987) and was upgraded by Johansen and
Juselius (1990). They introduced cointegration techniques that allow
identifying long-run relationships among non-stationary series and their
parametrisation into an error correction model (ECM) (Nkoro &
Uko, 2016).
Another random document with
no related content on Scribd:
No. Expended in this Service for Boats Freight, and 28 4 0
25 other Charges in embarking the Troops, Landing
and reimbarking them from time to time as
occasion required, subsistence to them and for
Information, Guides, etc.
Feb Expended in providing Boats at Leith and Horses

. at Kinghorn for carrying with the utmost
174 Expedition a Quantity of Ammunition for the Army
5/6 at Perth by Order of Lord Justice Clarke of the 8th
No. February
26
1 15 0
Upon the arrival of the Hessian Troops in the River

Forth the 8th February: The Prince of Hesse having sent
Colonel Steuart[623] to Lord Justice Clarke to know
where they were to disembark; Mr. Grosett was
thereupon directed by His Lordship to proceed with the
utmost expedition to the Duke then at Perth to acquaint
His Royal Highness thereof,[624] and to know his
Pleasure, [whether they should disembark at Leith, or be
ordered to the North]; And Mr. Grosett having by three in
the morning received his Royal Highness’s Directions to
prepare for disembarking them at Leith he immediately
returned to Lord Justice Clarke with these Directions.
No. Expended in this Service for Boats Freight to and

27 from Kinghorn, and for Horses from that to and
from Perth, and Coach Hire betwixt Leith and
Edinburgh 2 15 0
[As Aberdeen, Montrose, Inverness, and the other

Places in the North, through which the Army was to
march are supply’d with Coals for fireing from the Ports
in the River Forth, and as no Coals were allowed to go
there while the Rebells were in Possession of these
Places they were in that Country in so great want of
fireing that the Army under the Duke could not march
from Perth till this Want was supply’d, and] As those who
were employed to provide the Army with Coals had in
vain endeavoured it, and the Duke having directed Lord
Justice Clark to be acquainted with the difficulties they
were in Mr. Grosett together with Mr. Henry[625] were
thereupon sent by his Lordship’s Directions of the 11th
February[626] to all the Ports and Creeks upon the River
Forth, and got immediately a considerable Number of
Ships and Vessells loden with Coals, and sent them to
the different Ports and Places in the North where the
Army was to be, and who by these means were instantly
well supply’d, and enabled to March, when and where
his Royal Highness thought proper.
No. Expended in this Service

28
690
Feb The Duke having ordered Blyth’s

., [627]
174 Regiment with about Four hundred Men of
5/6 different Corps to be sent by sea from Leith to join
the Army in the North; Mr. Grosett by Direction of
Lord Justice Clarke of the 23rd February got
proper Transports prepared for that purpose, shipt the
necessary Provisions, and embarked the men, and
which was oblig’d to be done in the night by sending
them three Miles in Boats from the Harbour to the Road
of Leith to prevent the Transports being neaped in the
Harbour.
No. Expended in this Service and sending the Horses

29 of the Regiment from Leith to Kinghorn by water,
they being ordered to go from thence by Land to
the Army 880
Mar The Transports being put back after they had
ch, sailed, and got near their Port and being detained
174 by contrary Winds in the Road of Leith Mr.
5/6 Grosett got them supply’d by order of Lord
Justice Clarke with additional Stores of Provisions
and Boats for bringing on shore such of the
recovered Men of the different Corps as had fallen Ill by
their confinement.

30
640
Mar The Duke having ordered a considerable

ch, Quantity of Biscuits to be sent him to the North in
174
5/6
order to their being carry’d along with the Army as
they marched into the Highlands Mr. Grosett by
Direction of Lord Justice Clarke of the 6th March
got a sufficient Quantity for that purpose from the Castle
put up in proper Casks and Baggs, and immediately sent
off in to Vessells from Leith, which he had provided for
that Service.

31
4 13 0
The Duke having sent Directions to Lord Justice

Clarke to provide 10 Boats of 20 and 30 Tons Burthen to
attend the Army with Provisions and other necessaries
as they marched along the Coasts, and as they were
immediately wanted: Mr. Grosett by his Lordships Order
of the 11th March[628] went to the proper Places where
these Boats and small Vessells were to be had and sent
them directly away to his Royal Highness, under the care
of Mr. M‘Gill Commander of one of the Kings Boats at
Leith to whom Mr. Grosett by order of Lord Justice
Clarke gave Ten Pounds towards paying his Expenses.

32
12 18 0
Mar The Transports with the Troops for the North

ch, being put back a second time and a great number
174
5/6
of the recovered men falling sick again by their
confinement the Duke ordered them to be taken
o’shore and sent across the Forth from Leith to
Kinghorn in Boats and to march from that by Land, which
Mr. Grosett did accordingly on the 14th March.

33
430
Lord Justice Clarke having received an Express from

his Grace the Duke of Newcastle with a letter from
General Price at Berwick dated 16th March[629]
acquainting His Grace that he had received Information
from a sure hand that Corn from Northumberland and the
adjacent Counties were carried to Wooler a Town 14
Miles from Berwick, and from thence Westward between
Stirling and Dumbarton Castle, and privately embarked
on the River Clyde, and sent thro’ the Western Islands to
Lochaber for the use of the Rebells; Mr. Grosett was
thereupon desired by Lord Justice Clarke to go to
Sterling and from thence across the Country to
Dumbarton Castle, and along the coast to all the Ports
and Creeks on the River Clyde as well to enquire
particularly into the Truth of this Information as to leave
proper Orders and Directions at the Places above
mentioned to prevent Provisions of any sort being carried
from thence to the Rebells and which Mr. Grosett did
accordingly, but did not find that any provisions had gone
that way.
No. Expended in this Service having rode about Two

34 hundred miles therein.
11 18 0
Apri Lord Justice Clarke having upon the 4th of

l, April received an Express from Brigadier Genl.
174
6
Price Governor of Berwick giving an Account that
three large and one smaller Men of War had
appeared off Holy Island and as they made no
Return to the proper Signals that were made them from
that place, and King’s Sloops and Boats that were
cruizing there they believed them to be French Men of
War come to the Assistance of the Rebells and as this
Account was confirmed by an Express from Mr.
Castlelaw, Collector at Dunbar, and Mr. Fall one of the
Magistrates there; and that these ships were come within
the Mouth of the Forth Mr. Grosett at the Desire of the
Lord Justice Clarke went thereupon in the Night and
acquainted the Commanders of the Men of War then
lying in the Road of Leith thereof. But as they were of no
Force to make head against them, these with the other
Ships in the Road prepared to slip their Cables, and
proceed farther up the Firth, upon the approach of the
Men of War above mentioned; After this Mr. Grosett with
the assistance of the Custom House and several fishing
Boats, which he forced out from Newhaven in the night
went in quest of these Men of War, to know certainly
what they were, and next day found them to be Dutch
Men of War to whom the proper Signals had not been
given upon their leaving Holland.
No. Expended in this Service 5 15 0

35
Apri The Duke having sent Orders to the Earl of
l,
174 Home[630] who at this time commanded the
6 Troops that lay at Edinburgh to forward with the
utmost Expedition to the North the Four
Thousand recovered Men of different Corps that
were come there from England, Mr. Grosett at his
Lordship’s and Lord Justice Clarkes desire went and
provided proper Transports, and saw the men embarked
and sent off to his Royal Highness, agreeable to Lord
Home’s Order of the 15th April 1746.[631]
No. Expended in this Service, and for Boats to

36 embark the men in the Road of Leith.
6 10 0
Apri The Transports with these men being detained

l, in the Road of Leith by Contrary Winds, and
174
6
Doctor Maxwell who had the care of the Hospital,
having apply’d to Lord Justice Clarke for an
additional Transport, to put the weakest and most
sickly of the men by themselves Mr. Grosett, was desired
to provide one, and which he did accordingly.
No. Expended in this Service and for Boats employed

37 in removing the men and provisions from one
ship to another.
4 12 0
Commodore Smith[632] upon his Arrival in the Firth of

Forth with the Ships of War under his command being
ordered to proceed to the Orkneys, with these and the
other Ships, and Sloops of War then in the Road of Leith
to prevent their getting assistance from France or making
their Escape from these Coasts and Islands; and having
thereupon apply’d to Lord Justice Clarke to provide him
with proper Pilots for each of the Ships that were to go
on that Service: Mr. Grosett by his Lordship’s Directions
went and got them immediately provided from different
Ports.
No. Expended in this service

38
480
Apri The Great Coats, Blankets, Shoes, Shirts,

l, Waistcoats, Gloves, etc., given by different
174
6
Companies and Corporations in Presents to the
Army being sent to the Care of Lord Justice
Clarke,[633] Mr. Grosett by his Lordships
Directions received and saw them duely forwarded from
time to time to the Army.

39
10 5 0
His Royal Highness the Duke having directed Lord

Justice Clarke to be apply’d to for his assistance in
procuring what should from time to time be found
necessary for the Army in general; and in particular for
the more speedy embarkation of the Hessian Troops,
and the Four British Regiments ordered for Flanders,
and in getting the Clothing of Major General Wolf’s
Regiment[634] forwarded in the most expeditious manner
from Leith to Perth that Regimt. being upon Receipt
thereof ordered to march to Burnt Island to embark there
with the other British Regiments. Mr. Grosett by his
Lordship’s Directions accordingly assisted Colonel
Steuart and others in procuring what was from time to
time found necessary for these purposes.
40
780
That besides the services above mentioned Mr.

Grosett was during the Course of the Rebellion
constantly employed by Lord Justice Clarke in the
extraordinary affairs of the Government at this ... to
answer all Imergence ... ty for his keeping Horses at
different ... and as some of them fell into the hands of the
Rebells, and others were lost by hard Riding and other
accidents.
No. Expended on this Account and sundry other

41 Services during the Course of the Rebellion not
mentioned in the Above Articles.
110 0 0
Total Money Expended. 662 11 0
Received of the above Sum from Genl. Guest to Acct. 105 0 0
Ballance 557 11 0
Wal: Grosett.
N.B.—Mr. Grosett being from the first Breaking out of the

Rebellion employed in so open and remarkable a manner in the
service of the Government created against him the particular Ill will
of the Jacobites and their Adherents and who on that account took
every Opportunity of shewing their Resentment against him, they
plundered his House in the Town of Alloa, and in the Country carried
off effects to a very great value, drove all the Cattle from off his
Estate, forced the Payment of the Rents thereof to them, stript his
wife and children of the very cloathes they had on, and used
otherways in a most inhuman manner.
‘Brunstane, 4th Septem. 1747.
‘I do certify that Mr. Grosett was employ’d by me in the
service of the Government in the several matters above
mentioned, and also on other occasions and was zealous
and active in the Execution of whatever was committed to
his care.
‘(Signed)
And. Fletcher,
Lord Justice Clarke.’
N.B.—These Services ... forth and Certify’d in a Pap ...
Cope, the Generals Guest, ... syde and Hawley and by
Lord Home.
Nothing charged for trouble and loss of time, etc.
[This postscript is too torn to decipher accurately but it refers to
the ‘Narrative’ which bears this docquet]:—
We have perused the above Narrative, and do hereby
certify that the same is true so far as regards us
respectively,
R. Handasyde.
Home. H. Hawley.
Jos. Guest.
Jno. Cope.
LETTERS AND ORDERS FROM THE
CORRESPONDENCE OF WALTER
GROSSETT
I
The Lord Advocate to Walter Grossett and others
By the Honl Robt. Craigie Esqr His Majesties Advocate
General
These are ordering and requiring you and each of you
to concur in sending all Vessells of whatever kind upon the
North and Southsides of the Firth from Stirling to Kinghorn
to the Harbours of Leith and Borristounness and in case of
resistance you are to use force in making the Order
effectual Given under my Hand at Edinburgh this ninth day
of Sepr 1745 yeare.
Rob: Craigie.
To all Sherriffs Justices of Peace
Magistrats of Burghs and all
others his Majesties Leedgeses.
Mr. Grosett the Coll. at Alloa has Special Directions to
See this order put in Execution.
Rob: Craigie.
II
Lieutenant-General Handasyde to Walter Grossett
By the Honble Roger Handasyde Esqr Lieutenant
General and Commander in Cheif of All His Majesty’s
Forces, in North Britain etc.
Whereas it has been found Injurious to His Majesty’s
Service that any Boats shou’d pass from Leith to Kinghorn
or from Kinghorn to Leith, These are therefore Requiring
All Magistrates, Justices of the Peace, Constables and
Others concerned to be Aiding and Assisting to you in
bringing all the Passage Boats and Yauls from Kinghorn
and all other places on the North Side of the Forth to the
Harbour of Leith where they are to be kept till His
Majesty’s Service shall allow of their being returned to
their Respective Ports.
Given under my hand at Edinburgh this 26th Novemr
1745.
R: Handasyde.
To Walter Grosett Esqr Collector of
His Majesty’s Customs.
III
Lieutenant-General Handasyde to Walter Grossett
By the Honble Roger Handasyd Esqr. Leutt General and
Commander in Chief of all His Majs Forces in North
Brittain.
Whereas it has been found Injurious to His Majesties
Service that any Boats should pass from the North or
South sides of the Forth or that any Vessells whatever
should be allowed to remain upon the North side of the
said River These are therefore requiring all Magistrats,
Justices of the Peace, Constables and others concerned
to be aiding and assisting to you in Stoping the said
passage and removeing all Boats and Vessells whatever
from the North to the South Side of the Forth from
Kinghorn to Stirling Bridge and in case of resistance or
refussall to Burn or otherwise Destroy such Boats and
Vessells as shall after due Intimation made be found upon
the North Side of the said River.
Given under my Hand at Edinburgh this 27th November
1745.
R: Handasyde.
To Walter Grosett Esqr, Collr of His
Majesties Customs at Alloa, and
one of His Majs Justices of ye
Peace.
IV
The Commissioners of Customs to Walter Grossett
Mr. Grosett.
Inclosed We send You for Your Government and
Direction, a Copy of a Letter from the Lord Justice Clerk
and General Guest Commander in Chief of His Majestys
Forces in Scotland, Containing an order and Instructions
for bringing over all Ships, Vessels, Boats and Yoals of all
sorts and sizes lying in the Harbours and Creeks betwixt
Stirling Bridge and St Andrews inclusive on the North side
of the Frith with their Apparel and Furniture, and for laying
them up in the several Harbours therein Specified on the
South side of the Frith, and in the Execution of these
Directions and Instructions, all Officers whatsoever under
Our direction, are to give You their utmost assistance
when required so to do, as they will answer the Contrary
at their Peril, and You are particularly to apply to the
respective Officers in the several Ports and Precincts for
their Aid and Information. The General having given
proper orders to the Captain of the Milford Man of war to
concur and assist You in this Servise, You are to meet and
Concert with him proper measures for the Effectual
Execution thereof. We are,
Your Loving Friends,
Co: Campbell.
Alex Arbuthnott.
Rd. Somers.
Customho Edinbr
8th Decemr 1745. }
Collr Alloa.
Enclosure to No. IV.
Edinbr Decemr 9th 1745.
Gentlemen—We think it absolutely necessary for the
Good and Service of the Government at this Conjuncture,
that all the Ships, Vessels, Boats and Yoals of all sorts and
Sizes, with their Apparel and Furniture, in all Harbours and
Creeks etc. betwixt Stirling Bridge and St Andrews
inclusive on the North side of the Frith of Forth, be brought
over and Moord in the several Harbours of Dunbar, Leith,
Queensferry and Borrowstoness, and these on the South
side of the said River, betwixt Cramond and Eymouth be
Carried to Leith and Dunbar, as the Persons to be
Employed by You in the Execution hereof, shall Judge to
be most Conveneint, all to remain in these respective
Harbours untill further orders; We therefore earnestly
recommend it to You as proper Judges, to Nominate and
Appoint such of Your Officers under Your Direction and
Government to Execute our Orders as You shall think
most fit to be Employed for the doing of so necessary a
Duty, And as some former Orders of this Nature have not
been observed and obeyed so punctually as Directed for
want of other proper Assistance, We do therefore hereby
direct and ordain all Magistrates of Burghs Justices of the
Peace, Constables etc. within the respective bounds
aforesaid, laying aside all Excuses whatsoever, to be
aiding and assisting to the Person or Persons that are
possessed of Copys hereof, and of Your Instructions given
by You to them, as they will be answerable upon their
highest Peril; and in Case any of the Proprietors or others
Concerned in said Ships etc. as abovementd shall not
forthwith Comply with these Our orders, Then the Persons
so Employed are hereby ordained to burn and Destroy the
same, where any objections or refusals are made to obey
and Comply herewith, and the aforesaid Copys hereof
with your Instructions as above, shall be to them a
Sufficient Warrant for destroying of the above Ships etc.
not doubting of Your Compliance and Concurrence, We
are,
And: Fletcher.
Sign’d
{ Jos: Guest.
N.B.—Buys Boat who has been often Employed in
transporting of Rebels frequently, should be burnt out of
hand.
Honble Commrs of the Customs Edr.
V
Lieutenant-General Guest to Walter Grossett
Edenburgh December the 15th 1745.
Sr,—I agree to your hiring the Borrowstness Ship at
the Rate you mention, provided the owners dont insist on
my Insuring her from the Enemy, for that I cant consent to
—if they comply, you’l immediatly station her at Higgins
Nook, and Nicol at Carse’s Nook, or wherever they can be
best placed for His Majestys Service. You’l give them
positive Derections to be very carefull, in watching both
sides the River, and sending immediat Intelligence to the
Ld Justice Clerk, on discovering any Motions of the
Enemy.
You’l consider the Ship is not ensured now, and is in as
much, or more danger than when employd by his Majesty.
—I am Sr your most Obedt humble Servant,
Jos: Guest.
VI
Walter Grossett to the Commissioners of Customs
Hond. Sirs,—In Obedience to your directions of the
8th Instant Inclosing an Order and Warrand from Lord
Justice Clerk and General Guest Commander in chief of
the Forces in Scotland, for bringing over all Ships,
Vessells and Boats, lying in any of the Harbours or
Creeks, betwixt Stirling and S: Andrews on the North side
of the Firth, to the Harbours therein specified on the south
side thereof, and for Burning or destroying the ships and
Vessells etc., of such of the Proprieters thereof as should
refuse to comply with these Orders; I have with the
assistance of the Kings Boats at Queensferry and
Borristounness, and two Boats Crews belonging to the
Happy Janet stationed off Queensferry, removed,
disabled, or destroyed, all Boats and Vessells that lay
betwixt Stirling and Aberdour. But as the doing of this,
would not have hinder the Rebell Army from geting a
Cross the River, while Boats and Vessells were allowed to
remain at the severall Creeks in Carron Water, and at
Hargens Nuik Airth, and Elphingstone, and other Creeks
on the south side of the Forth betwixt Borristounness and
Stirling; I therefore proceeded to these places, and
prevailed with severall of the Proprieters of Boats and
Vessells there, to remove them from thence, but as some
of them refused to comply, by reason of their not being
included in the Order and Warrand above mentioned, I am
therefore Humbly of Opinion, that Lord Justice Clerk and
General Guest should be applyed to, for a Warrand for the
removing or destroying of them. And as there are at this
time at Alloa, a considerable quantity of Deals and Learge
Loggs of Wood, of 30 or 40 feet in Length, of which Floots
may not only easely be made, for the Transporting of Men,
Horses etc.; from the one side of the River to the other,
but upon which Flooting Batteries may be reased, to move
from place to place, to play upon such of His Majesties
Forces or others, who may be employed in Defending the
Banks of the River, to prevent the Landing of the Rebells.
It is therefore Humbly submitted, how far it may be thought
proper at this Juncture, to have these Deals and Loggs
removed from Alloa. If this is approven off, what I would
propose as the easiest method of removing them, would
be to put them on Board of Vessells, to ly at
Borristounness till the danger is over. With this view I
spook to several shipmasters of my acquaintance, (who I
knew to be good Whiggs and well wishers to the common
Cause) on Tuesday last at Borristounness, and who at my
request, readily agreed to take them on Board their
Vessells, upon their only being paid the Charges they
should be put to in going to Alloa to Load and unload
them. All which is Humbly Submitted by Hon: Sirs Your
Hors Most Obedt Huml Servt
Wat: Grosett.
Edinburgh 16th Decr 1745.
Endorsements.
16th Decr 1745.
Mr. Grosett to wait upon the Justice Clerk and Genl
Guest with this Lre. and to Report their Opinion.
W. H. for the Secry.
The Board approve Mr. Grosetts Conduct and Zeal in
this whole Affair and his proposal is agreed to if the Lord
Justice Clerk and Genl Guest think proper.
W. H. for the Secretary.
VII
The Commissioners of Customs to Walter Grossett,
forwarding approval of Lord Justice Clerk and General
Guest
Edinburgh 16th Decr 1745.
We approve of Mr. Grosetts Conduct and proposalls
and desire the Board of Customs may give him the proper
directions for puting the same in Execution and for which
end a proper Warrant shall be granted by us.
And Fletcher.
Jos: Guest.
Mr. Grosett
Having considered the above Approbation of the Lord
Justice Clerk and General Guest, We heartily agree with
the same and direct you to proceed accordingly, having
first obtained their Warrant for the purposes as mentioned
in Your Letter of this date.
Co: Campbell.
Alexr Arbuthnott.
Rd. Somers.
Custom Ho Edinburgh
16th December 1745.
VIII
The Lord Justice Clerk to Walter Grossett
(Holograph but not signed)
Pray forward the Inclosed, and get all Stirling shire in
Arms immediately, If Ld Home approves G. Blackney will
give arms—raise ye Hue and Cry—Cause the Sherriff
distribute ye papers yt comes wt ys bearer.
Go on and prosper.
Edr 19th Decr 1745.
I have paid none of the Expresses yt they may make
more hast but given every one two shills. wch is not to be
deducted out of yr hire if they make Speed.
IX
Joshua Guest Esqr Lieut. General and Commander in
Cheif of all His Majesty’s Forces, Castles, Forts and
Barracks in North Britain etc.
His Majesty’s Service Requiring that all Vessells and
Boats of whatever Size be instantly removed out of the
Harbours of Borrostouness, Queensferry, Leith or any
where else upon the South Coast of the Forth betwixt
Leith and Stirling, Those at Borrostouness and
Queensferry to the Road of Borrostouness or Such other
place or places as you shall think most for His Majesty’s
Service at this Juncture; those at Leith to the Road of
Leith or such other place as you shall judge most proper
for said Service; These are therefore Authorizing and
Empowering you to put the said order in Execution, and to
which purpose the Commanders of His Majesty’s Ships of
War or others employ’d in the Kings Service, are hereby
Required to give you their Utmost Assistance, as are all
Magistrates, Justices of the Peace, Constables, and all
other Persons, Civil or Military whom these may Concern.
A Copy hereof sign’d by you shall be a sufficient warrant
to any Person required or empower’d by you in the
Execution hereof as they will answer to the Contrary at
their highest Peril.
Given at Edinburgh the 21st day of Decemr 1745.
Jos: Guest.
X
Lieutenant-General Guest’s Directions
Directions for the Master of the Boat that goes to
Borrostouness.
Edinburgh 22d Decem. 1745.
He is to sail directly for Borrostouness, lye out in the
Road of that place and send in his Boat or yawl, to
Collector Grosett who is there and get directions from him
how he is to dispose of his Cargo, part of which is to go to
Stirling Viz. the 9 pounders Cannon Ball, Spunges, etc.
The Pouder and small Cannon Ball is for the use of the
Jean of Alloa, and Pretty Janet, that are stationed near
that place or at Higgens Nuik. The Biscuit which is to be
taken in at Leith from Mr. Walker is to be disposed of at
Bosness as Mr. Grosett will direct. In case of any accident
of your not meeting with Mr. Grosett, I desire Cap. Knight
of the Happy Janet may forward im̅ ediately the 9 pound
Cannon Ball, Spunges etc. to Stirling, where General
Blakeney has present occasion for them.
Jos: Guest.
To the Master of the Boat Order’d to
sail for Borrostouness.
XI
Captain Knight R.N. to Walter Grossett
Sir,—Having Sent 7 pounds of powder, 20 Sheets fine
paper made in Cartridges and 15 pounds Musquet Shot to
be used, if occasion required it, by my people in
preventing the Rebells passage at Higgens-Nook, which I
understand you gaue to John Peirson Master of the Pretty
Jennett, I desire you will be pleased to procure an Order
from General Guest to me for supplying these Ordnance
Stores to him, with his Ricept to Alexander Wedderburn
Master of the Armed Vessel under my Command of the
Same, and to transmit both to me at this place with the
first opportunity.—I am Sir, Your very humble Servant,
Jno. Knight.
Happy Jennett Queensferry Road
22d December 1745.
Walter Grosett Esq. Collector of his
Majts Customs at Alloa.
XII
Joshua Guest Esqr Lieut. General and Commander in
Cheif of all His Majesty’s Forces, Castles, Forts and
Barracks in North Britain etc.
His Majesty’s Service Requiring that a number of
Vessells and Boats be hired for Transporting of His
Majesty’s Forces, These are therefore authorizing and
Empowering you to hire such a number of Vessells and
Boats and make such agreement with them as you shall
judge necessary at this Juncture, and I hereby oblige
myself to make good such agreement, for which this shall
be your Warrant. Given at Edinburgh this 22d December
1745.
Jos: Guest.

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Globalisation and Energy Transition in Latin America and The Caribbean Economic Growth and Policy Implications Matheus Koengkan Full Chapter

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Globalisation and Energy Transition in

Latin America and the Caribbean:

ISBN 978-3-031-13884-3 ISBN 978-3-031-13885-0 (eBook)

Matheus Koengkan holds a PhD in Economics from the University of

Fig. 2.1 Evolution of GDP per capita growth (annual %) in Latin

Fig. 2.7 Evolution of trade (% of GDP) in Latin America and the

Fig. 6.1 Summary of the variable’s effect. (The authors created

Table 3.1 Variance inflation factor (VIF) and cross-section

Table 4.9 Forecast-error variance decomposition 86

Table 8.4 Unit root test 211

© The Author(s), under exclusive license to Springer Nature 1

culture, social relations, politics, migration, and technology (Overland,

Meeting 2018 in Davos, and COP26 (2021 United Nations Climate

Acknowledgements Governance, Competitiveness and Public Policy

Funding This work was financially supported by the research unit on

Renewable Energy Transition

© The Author(s), under exclusive license to Springer Nature 7

economies to international capital and trade, deregulation of the econ-

Fossil fuel energy consumption Renewable energy consumption

2.2 Energy Transition in the LAC Region

investment, as the private sector is more risk-averse in this context. Public

The process of creating networks of connections among actors at multicon-

Based on Dreher’s definition (2006), it can be understood that globali-

measures such as foreign exchange restrictions, trade barriers, visa require-

2.3 Globalisation in the LAC Region

average growth rate of 7.40% (Santos, 2015). According to Carneiro

Imports of goods and services per capita (BoP, current US$)

Acknowledgements Governance, Competitiveness and Public Policy

Funding This work was financially supported by the research unit on

Carneiro, R. M. (2012). Commodities, choques externos e crescimento: reflexões sobre

countries of Latin America and the Caribbean. In Physical capital development

Koengkan, M. (2017). Is the globalisation influencing the primary energy con-

Does Financial Openness Expand

© The Author(s), under exclusive license to Springer Nature 27

biogas, hydropower plants, geothermal, wind, waves, and photovoltaic

Americas (excl. US & Brazil) China

The impact of financial openness on the installed capacity of renewable

approaches the short- and long-run effects of this capacity of renewable

3.2 Literature Review

investigated the effects of financial development on the expansion of the

This review of studies on proximate topics indicates that various ques-

3.3 Method and Data

Feb Expended in providing Boats at Leith and Horses

Upon the arrival of the Hessian Troops in the River

No. Expended in this Service for Boats Freight to and

[As Aberdeen, Montrose, Inverness, and the other

No. Expended in this Service

Feb The Duke having ordered Blyth’s

No. Expended in this Service and sending the Horses

No. Expended in this Service

Mar The Duke having ordered a considerable

No. Expended in this Service

The Duke having sent Directions to Lord Justice

No. Expended in this Service

Mar The Transports with the Troops for the North

No. Expended in this Service

Lord Justice Clarke having received an Express from

No. Expended in this Service having rode about Two

Apri Lord Justice Clarke having upon the 4th of

No. Expended in this Service 5 15 0

No. Expended in this Service, and for Boats to

Apri The Transports with these men being detained

No. Expended in this Service and for Boats employed

Table 4.9 Forecast-error variance decomposition 86

Table 8.4 Unit root test 211