Friday, December 14, 2012

Energy sources in Latin America and Asia

The graphs below (World Bank data) show the sources of energy in a few selected countries in Latin America and Asia. The first thing to notice is that Asia burns way more coal than Latin America, which tends to depend more on hydroelectric and natural gas sources (the US is a natural gas and coal country, by the way).
One reason for the difference is that Latin America does not have a significant share of the global coal reserves. China and India have a reasonable share (the US has the largest reserves of coal, followed by Russia).

In terms of the environment hydro sources are considerably better for emissions (zero) than coal, but do have other impacts, associated with flooding, reduced streams and negative impact on fish migration patterns among the worse. Natural gas is also better than coal. So Latin America is slightly more environmentally friendly. Coal tends to be cheaper (although fracking may be changing that in the US), which gives a competitive edge to Asian countries.

Note that energy is essential for the functioning of the economy. Lenin said that: "Communism is Soviet power plus the electrification of the whole country." Paraphrasing, capitalism is power to the corporations and electrification of the whole world. Note that this implies that sometimes, at least, the constraint to the expansion of demand could come from a supply restriction. Interestingly enough, more often than not, it still manifests itself through an external constraint, since many developing countries are net importers of energy.


  1. Eso pasa cuando no hay inversión pública y se piensa que el desarrollo consiste en fomentar el consumo privado. Y que el Estado está básicamente para funcionar como máquina de propaganda.
    La energía es el ajuste por el lado de la oferta. Ajusta por cantidad más que por precio. Se consume siempre todo lo que se produzca. No se produce nada sin ella. Allí estamos todos.
    Por eso es una inversión que tiene que hacer el Estado, los privados no van a invertir en tasas apenitas por encima de la de referencia a larguísimos plazos.

  2. fascinating Lenin quote...had not read this one. And your demand growth constraint comments warrant further development.


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