VII. Latin America

Latin American Growth Trends

• Latin America experienced growth in every indicator examined here between 1980 and 2001. For carbon dioxide emissions, real GDP, and energy consumption, this growth did not begin until the mid-1980s, following the oil price collapse of late 1985/early 1986.
• Electricity consumption grew the most rapidly over the period, rising 151% overall, with average annual increases of 4.5%.
• Real GDP, carbon dioxide emissions, and energy consumption increased an average of 2.1%, 2.1%, and 2.9% per year, respectively, between 1980 and 2001. Latin America’s population averaged growth of 1.8% per year during this period.
• All of the energy and economic indicators stopped growing in 2000 and 2001, when many countries in Latin America suffered financial crises. These produced dramatic declines in economic output and energy consumption in some of the region’s largest countries.
• Not all Latin American countries suffered economic declines during this period, however. For example, Chile was comparatively unaffected by the severe late 1990s economic turmoil, which may reflect the fact that the chief purchasers of Chilean exports are outside the region. ^[26]

• Between 1980 and 2001, energy consumption in Latin America grew 82% overall -- an average of 2.9% annually -- from 11 quads to 21 quads.
• During this period, the region grew less dependent upon fossil fuels, mainly because of a relative decline in oil consumption and an increase in hydroelectricity production.
• In 1980, petroleum accounted for 65% of energy consumed in Latin America. This share fell rapidly during the early 1980s, reflecting that period’s high oil prices. While the slide moderated in the mid-1980s after the fall in oil prices, petroleum never recovered its previous share of energy consumption. Oil did, however, remain the single most important source of energy in the region, accounting for half of the region’s 2001 energy consumption.
• Both natural gas and hydroelectric power increased their shares of Latin America’s energy consumption between 1980 and 2001. Natural gas’ share grew 67%, from 12% (1.4 quads) to 18% (3.8 quads) of all energy consumed. Hydroelectric power’s share grew almost as much, increasing from 18% (2.1 quads) to 26% (5.3 quads).
• Coal accounted for a much smaller share of energy consumption in Latin America than it did anywhere else in the world. Coal’s share of the region’s energy portfolio remained fairly constant at 4%-5% during the 1980s and 1990s.

• Per capita income in Latin America barely rose between 1980 and 2001, growing from $5,872 to $6,184. Because of the large absolute declines in per capita GDP in the EE&FSU region, however, Latin America became the sub-region of the non-OECD with the highest per capita income.
• Between 1980 and 2001, Chile’s per capita GDP more than doubled, from $4,206 to $8,495, an average annual growth rate of 3.4%.
• Among the region’s major economies, Argentina experienced the largest income fluctuations. Between 1980 and 2001, Argentina’s real GDP per capita almost reached $11,700 and fell below as $8,000. At the end of the period, per capita GDP was $10,287, 4% lower than the country’s 1980 level of $10,677.
• Venezuela’s per capita GDP declined 17% between 1980 and 2001. Much of this reduction reflected declines in Venezuelan oil export revenues. While revenues declined 54% between 1980 and 2003, Venezuela’s population almost doubled.^[27]
• Between 1980 and 2001, Latin America’s per capita energy consumption grew 24% over the period -- an average of 1.0% per year -- from 39 million Btu to 49 million Btu. This reflects the region’s industrialization and electrification efforts, as well as its increasing motor vehicle penetration.

• Latin American energy intensity rose 18% between 1980 and 2001 -- 0.8% per year -- from 6,717 Btu per $1995-PPP to 7,938 Btu per $1995-PPP.
• Venezuela’s and Brazil’s energy intensities grew by 37%, and 41%, respectively, between 1980 and 2001.
• Reflecting its large energy sector, Venezuela’s energy intensity was consistently the highest in the region during the period. In 2001, Venezuela’s energy intensity was 22,691 Btu per $1995-PPP, or nearly triple the regional average.

• Between 1980 and 2001, Latin American carbon dioxide emissions grew 54%, an average of 2.1% annually, from 640 MMT to 984 MMT. Latin America’s carbon dioxide emissions increased more slowly than those of any other non-OECD region (excluding the EE&FSU region).
• The relatively slow growth of carbon dioxide emissions reflects Latin America’s relatively increased use of natural gas and, especially, hydroelectric power. In 2001, hydroelectric power’s share of Latin America’s energy portfolio was 26%. In no other region, including the OECD and G-7, did hydroelectric power contribute more than 8% of energy consumption.
• Most of Latin America’s carbon dioxide emissions growth occurred in Brazil. Industrialization, increased exploitation of fossil fuel resources, the rise of automobile ownership, broad electrification campaigns, and population increases helped to cause Brazilian carbon dioxide emissions to grow from 191 MMT to 351 MMT between 1980 and 2001. This reflects average annual growth of 3.0%.
• During this period, Chile’s carbon dioxide emissions grew even faster, at 3.9% per year, rising from 24 MMT to 54 MMT. This rapid growth reflects, in part, Chile’s increasing concentration on energy intensive heavy industries like copper mining and processing.
• Overall, Latin American per capita carbon dioxide emissions remained about flat between 1980 and 2001, at slightly over 2 metric tons per person. Only Chile experienced significant growth in per capita emissions, in part reflecting the importance of its heavy industries sector.

• Carbon dioxide intensity remained relatively constant in Latin America between 1980 and 2001, hovering around 0.37 metric tons per thousand $1995-PPP. Throughout the period, Latin America had the lowest carbon dioxide intensity of any world region, a result of its large hydroelectric sector.
• Variations in carbon dioxide intensity levels within the Latin America region likely are reflective of the countries’ differing natural resource endowments. For example, Venezuela’s carbon dioxide intensity is the highest in the region in part due to its huge hydrocarbon reserves.

• Latin American electricity consumption grew from 287 bkwh to 721 bkwh between 1980 and 2001 -- an average annual growth of 4.5%.
• Brazil accounted for more than half of the increase in Latin American power consumption between 1980 and 2001. Brazil’s electricity consumption nearly tripled, growing an average of 4.7% per year -- from 129 bkwh to 336 bkwh -- over the period.
• While Brazilian demand for electricity grew more rapidly in absolute terms, Chile’s demand grew at a more rapid rate -- an average of 6.3% per year. Chile consumed 40 bkwh in 2001, 264% more than it did in 1980.
• During the 1980s and 1990s, Chilean per capita electricity consumption grew the most rapidly of the major economies in the region. Between 1980 and 2001, Chilean per capita power consumption increased an average of 4.7% per year, growing from 989 kwh to 2,606 kwh. The large increase in per capita electricity consumption in Chile reflected the country’s ongoing industrialization as well as rural electrification efforts.
• Peru and Colombia grew the least rapidly between 1980 and 2001 in terms of both overall power demand as well as per capita power consumption. This was illustrative of the two countries’ economic and political struggles during the period.

• Latin America’s electricity intensity increased 63% between 1980 and 2001 -- an average of 2.3% per year -- from 168 kwh per $1995-PPP to 273 kwh per $1995-PPP. This growth rate was greater than that of any other region except Developing Asia, and reflects the region’s industrialization, electrification, and emphasis on heavy industries.
• Venezuela’s electricity intensity grew particularly rapidly during the period, rising an average of 3.4% per year, from 311 kwh per $1995-PPP to 626 kwh per $1995-PPP. This significant growth occurred in part because Venezuela maintained price controls on electricity.
• Chile’s electricity prices were not controlled, but Chilean electricity intensity nonetheless grew 30% -- 1.3% per year -- from 235 kwh per $1995-PPP in 1980 to 307 kwh per $1995-PPP in 2001. This growth stemmed in part from Chile’s industrial development, and in part from its rural electrification activities.