Are renewable energy policies upsetting carbon dioxide emissions? The case of Latin America countries

The impact of renewable energy policies in carbon dioxide emissions was analysed for a panel of ten Latin American countries, for the period from 1991 to 2012. Panel autoregressive distributed lag methodology was used to decompose the total effect of renewable energy policies on carbon dioxide emissions in its short- and long-run components. There is evidence for the presence of cross-sectional dependence, confirming that Latin American countries share spatial patterns. Heteroskedasticity, contemporaneous correlation, and first-order autocorrelation cross-sectional dependence are also present. To cope with these phenomena, the robust dynamic Driscoll-Kraay estimator, with fixed effects, was used. It was confirmed that the primary energy consumption per capita, in both the short- and long-run, contributes to an increase in carbon dioxide emissions, and also that renewable energy policies in the long-run, and renewable electricity generation per capita both in the short- and long-run, help to mitigate per capita carbon dioxide emissions.