The article suggests that, if they wish to be sustainable, Latin American economies need structural reform that shift them toward more knowledge-intensive, less energy- and resource-intensive sectors.
14 December 2011: An article recently published by analysts at the UN Economic Commission for Latin America and the Caribbean (ECLAC) warns that, if they wish to attain sustainable economies, Latin American countries should focus on structural reforms that promote more knowledge-intensive and productivity-dynamic sectors.
The article, published ECLAC’s quarterly review, Revista CEPAL, is titled “The Dynamic of Industrial Energy Consumption in Latin America and its Implications for Sustainable Development,” and was authored by Hugo Altomonte and three colleagues. It analyzes production efficiency and industrial energy consumption in the period 1997-2006 in the economies of Brazil, Chile, Colombia and Mexico, and compares them to US performance during the same period, with the objective of verifying whether Latin America is nearing or moving away from world-level best practice in both productivity and energy consumption. The years and countries chosen were selected because the comparable data required was available through industrial surveys of the four nations.
The analysis found that, although Chile, Mexico and most notably Colombia are closing the gap with the US in industrial energy efficiency, the productivity gap with the US remains. The authors attribute this to the fact that, while the US during this period demonstrated a pattern of specialization in activities with high productivity rates, high technological content and low energy consumption, Latin American nations tended to specialize in sectors intensive in natural resource use, with low technological content, slow productivity growth, and most importantly, sectors that are energy-intensive, which tended to raise their countries’ overall energy demand despite their efforts to increase industrial energy efficiency.
The authors conclude that, without structural changes to move Latin American economies toward sectors that are more knowledge-intensive and less energy- and resource-intensive, any industrial growth will imply an expansion in energy-intensive sectors, and thus raise overall energy consumption in Latin America. [Publication: La dinámica del consumo energético industrial en América Latina y sus implicancias para un desarrollo sostenible (only available in Spanish)]