Enhancing sustainable electricity consumption in a large ecological reserve-based country: the role of democracy, ecological footprint, economic growth, and globalisation in Brazil

Abstract

The objective of this study is to investigate the role of democracy, ecological footprint, economic growth, and globalisation in enhancing sustainable electricity consumption in an ecological reserve-based country of Brazil over the period 1971-2014. To achieve this objective, the minimum Lagrange multiplier (LM) unit root and Bayer-Hanck combined cointegration tests are applied. The model is estimated using the fully modified ordinary least squares (FM-OLS) and dynamic ordinary least squares (DOLS) estimation procedures. The empirical results suggest that all the variables have a positive and significant effect on electricity consumption. This implies that increasing the level of these variables would stimulate electricity consumption. The long-run causality results indicate a one-way causality running from ecological footprint, democracy, and globalisation to electricity consumption. The results further discover that causality flows from ecological footprint, democracy, and globalisation to economic growth. In addition, a long-run bidirectional causal relationship between electricity consumption and economic growth is uncovered. In the short run, the result validates a bidirectional causality between ecological footprint and electricity consumption. More so, electricity consumption causes economic growth and democracy, whilst economic growth causes globalisation. The results are validated by the innovation accounting tests. The policy implication of the findings is that ecological-based conservation policies could have negative consequences on economic growth and electricity consumption because of a significant dependence of these two variables on the ecological footprint. Therefore, to guarantee sustainable electricity consumption, sufficient and sustainable green energy and optimum energy mix should be encouraged by the stakeholders.

Keywords: Brazil; Democracy; Ecological footprint; Economic growth; Electricity consumption; Globalisation.