Energy and Economic Growth, Is There a Connection? Energy Supply Threats Revisited

Paul Ojeaga^1*, Deborah Odejimi¹, Emmanuel George³, Dominic Azuh³

¹Bergamo University, Bergamo, Italy.
¹Igbinedion University, Okada, Nigeria.
³Covenant University, Ota, Nigeria.

DOI: 10.4236/ojee.2014.33007                

Abstract

The increased cost of accessing energy and the effects on economic growth (GDP) across regions is one of grave concern [1]. The Cost implication of energy supply often shapes regional energy policies across the globe. This paper presents an empirical investigation into the relationship between energy generation and economic growth, while also investigating probable threats to sustainable energy supply across regions. Energy generation was found to have some implications for economic growth across regions. It was found that hydro electric, renewable energy and nuclear generation sources were significantly driving growth across regions while coal and gas sources were not. This was particularly true since the cost of fossils was having strong cost implications, for overall energy generation cost in countries in regions due to overdependence on fossils. Generating sources were also found to have strong implications for sustained energy supply (energy security), renewable energy and gas generating sources that had the strongest effects on sustainable energy supply across regions. This was probably true since regions were focusing on new technologies in energy generation process, which are cheaper, cleaner and more sustaining, while still depending on gas plants due to the relative cost implications of maintaining gas plants compared to hydro and nuclear generating plants. The method of estimation used in the study is the seemingly unrelated regression estimation method.

Keywords

Energy Security, Energy Cost Reduction, Fossils, Growth, Renewable Energy

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	International Energy Agency (IEA) (2001) Report 2001.
[2]	European Commission (2000) Towards a European Strategy for the Security of Energy Supply. Green Paper, COM769, Brussels.
[3]	Cohen, G., Joutz, F. and Loungani, P., (2011) Measuring Energy Security: Trends in the Diversification of Oil and Natural Gas Supplies. IMF Working Paper No. 11/39, Washington, DC.
[4]	Bryce, R. (2008) The Dangerous Delusions of ‘‘Energy Independence’’. Public Affairs, New York.
[5]	Le Coq, C. and Paltseva, E. (2008) Common Energy Policy in the EU: The Moral Hazard of the Security of External Supply. SIEPS Report 2008: 1, Stockholm, Sweden
[6]	Neumann, A. (2004) Security of Supply in Liberalised European Gas Markets. Diploma Thesis, European University Viadrina, Viadrina.
[7]	Neumann, A. (2007) How to Measure Security of Supply? Mimeo, Dresden University of Technology, Dresden.
[8]	Annual Energy Outlook (2009) Energy Information Administration Office of Integrated Analysis and Forecasting. U.S. Department of Energy.
[9]	Awerbuch, S., Jansen, J.C. and de Vries, H.J. (year) Demonstrating and Building Capacity for Portfolio-Based Energy Planning in Developing Countries. Interim Report Submitted to The Renewable Energy & Energy Efficiency.
[10]	Knox-Hayes, J., Brown, M.A., Sovacool, B.K. and Wang, Y. (2013) Understanding Attitudes toward Energy Security: Results of a Cross-National Survey. Global Environmental Change, 23, 609-622. http://dx.doi.org/10.1016/j.gloenvcha.2013.02.003
[11]	Ojeaga, P., Odejimi, D. and Alege, P.O. (2013) Rethinking Regional Energy Policy: Towards Averting AnotherEnergy Crisis. Do Threats Matter in The Supply and Generation Process? Journal of Energy Technologies and Policy, 4, 1-17.
[12]	Alexeev, M. and Conrad, R. (2009) The Elusive Curse of Oil. The Review of Economics and Statistics, 91,586-598. http://dx.doi.org/10.1162/rest.91.3.586
[13]	Bhattacharyya, S. (2009) Root Causes of African Underdevelopment. Journal of African Economies, 14, 745-780.
[14]	Acemoglu, D., Johnson, S. and Robinson, J. (2001) The Colonial Origins of Comparative Development: An Empirical Investigation. American Economic Review, 91, 1369-1401.
[15]	Renewable Global Status Report REN21 (2012) Renewable Global Status Report 2006-2012.
[16]	Burnside, C. and Dollar, D. (2000) Aid, Policies and Growth. American Economic Review, 90, 847-868.