رابطه مصرف برق و رشد اقتصادی: شواهد از یونان

This paper attempts to cast light into the relationship between electricity consumption and economic growth in Greece in a multivariate framework. For this purpose we used cointegration techniques and the vector error correction model in order to capture short-run and long-run dynamics over the sample period 1970–2011. The empirical results reveal that in the long-run electricity demand appears to be price inelastic and income elastic, while in the short-run the relevant elasticities are below unity. We also argue that the causal relationship between electricity consumption and economic growth in Greece is bi-directional. Our results strengthen the notion that Greece is an energy dependent country and well directed energy conservation policies could even boost economic growth. Furthermore, the implementation of renewable energy sources should provide significant benefits ensuring sufficient security of supply in the Greek energy system. This evidence can provide a new basis for discussion on the appropriate design and implementation of environmental and energy policies for Greece and other medium sized economies with similar characteristics.

The relationship between energy consumption and economic growth has been the subject of thorough research and of great interest to economists as well as to policy makers. Knowledge of the actual causality direction between electricity consumption and income growth has important implications for modeling environmental and growth policies. More specifically, if the causality runs from income growth to electricity consumption, then environmental policies for electricity conservation may not affect income growth. On the other hand, if there is a positive causality running from electricity consumption to income growth, then environmental policies aimed at conserving electricity consumption may negatively affect economic growth and development (Tang and Tan (2012)). During the last few years, there is a substantial body of literature assessing the determinants and the direction of causality between economic growth and energy consumption. However, the bulk of the literature has so far offered conflicting and inconsistent results concerning the causal relationship between energy consumption and economic growth (Hondroyiannis et al., 2002). Although, the empirical evidence in a study over 100 countries (Ferguson and Wilkinson, 2000) shows a strong correlation between them, this does not necessary imply a causal relationship. The evidence concerning the causality is ambiguous, from bi-directional (in both directions) and uni-directional (from energy consumption to economic growth or the opposite) to no causality. Another extensive study (Payne, 2010) provides a survey of the international evidence on the causal relationship between energy consumption and economic growth, where the empirical results are again mixed concerning the causality, even for a specific energy carrier such as the electricity. The variation in results may be attributed to variable selection, model specifications, time periods of the studies, different institutional, structural frameworks in the countries examined, and econometric approaches undertaken (Hondroyiannis et al., 2002 and Payne, 2010). Despite the fact that the relationship between energy consumption and economic growth has been extensively studied over the past three decades, the development of new energy and environmental policies, the new climate regime and the development of new econometric techniques provide enough space for further research. The initial interest in the causality of this relationship, not only in the demand side but also in the production side, was triggered mainly by the energy crises in the 1970s. This has created doubts on the conventional neoclassical production function, where Land, Labor and Capital were recognized as the main factors of production (Obas John, 1996). The energy crises together with fast technological developments have created space for examining the relationship of the energy factor and of endogenous technological change in economic growth. Over the last two decades, the advance of econometric techniques together with the new climate regime created space and stimulated further empirical research. The increase of global awareness on climate change issues, enhanced mainly through the introduction of the Kyoto Protocol, has placed pressure on designing energy and environmental policies with low marginal abatement costs. Energy efficiency projects have been prioritized in the portfolio of policies for many countries, as those policies have been considered as no regret options, meaning that they provide even gains in the macro-economy. Estimates of the effects of no-regrets efficiency policies have been reported by the International Energy Agency (IzEA WEO, 2006), and synthesized in the IPCC AR4 WG3 report (IPCC AR4, 2007), using detailed bottom-up models but creating also need for examining from a top-down approach. Therefore, examining the impact of energy efficiency policies on economic growth became a crucial task among researchers and policy makers. Moreover, the extent of the implementation of energy efficiency measures has created doubts on the extent of the rebound effect, which refers to the idea that some or all of the expected reductions in energy consumption as a result of energy-efficiency improvements are offset by an increasing demand for energy services, arising from reductions in the effective price of energy services resulting from those improvements (Barker et al., 2009). This rebound effect is highly influenced by the level of environmental awareness, as a behavioral shift can lock-in or even accelerate the effects of energy savings projects. The need for directing specific policies has led to the development of “bottom-up” detailed models and on the disaggregation of econometric studies. Recent research does not focus on aggregate energy demand consumption but on specific sectors (Rapanos and Polemis, 2006, Polemis, 2006 and Polemis, 2007; Wolde-Rufael, 2004) and/or on disaggregated energy demand and specific energy carriers (Hu and Lin, 2008 and Chor Foon and Eu Chye, 2012; Chandran et al., 2010; Yuan et al., 2007 and Altinay and Karagol, 2005) and/or on countries with specific characteristics (Wolde-Rufael, 2009, Narayan and Smyth, 2008 and Lee and Chang, 2008). Again in the above mentioned studies, the causality between disaggregated energy demand and economic activity is ambiguous. The causality between energy consumption and economic growth is ambiguous among countries (Ozturk, 2010, Payne, 2010 and Wolde-Rufeal, 2004) or even among studies for the same country, as each country has its own institutional, structural characteristics, different exposure in foreign energy resources and therefore different exposure in energy supply crises, different climatic conditions and behavioral patterns. Over the last few decades a number of empirical studies for the Greek economy investigated energy demand relationship with economic growth and prices. They have shown mixed results, either observing falling income and price elasticities of energy demand (Samouilidis and Mitropoulos, 1984), either concluding that elasticities behave as a cluster against energy demand (Mitropoulos et al, 1982), either showing that energy demand is rather inelastic with respect to prices (Donatos and Mergos, 1989, Donatos and Mergos, 1991, Christodoulakis and Kalyvitis, 1997 and Zonzilos and Lolos, 1996) or showing a bi-directional causality between energy demand and economic growth Hondroyiannis et al., 2002. Other studies (Polemis, 2006 and Polemis, 2007) have examined this causality between energy demand and economic growth, but focused on specific sectors of the economy. However most of those studies have one or more of the following three main shortcomings: they have not focused on the possible interdependence between energy demand and economic activity, failing therefore to catch the notion of causality and possible rebound effects. They have focused on bivariate or trivariate variable models, and finally they have not focused on electricity consumption. The purpose of this paper is not to resolve this variation in causality, but to provide new evidence and reinvestigate the notion of causality for Greece, considering the latest available data. On the one hand, our aim is to focus on the causality between the electricity demand and the economic growth in a multivariate framework, while on the other hand the novelty of this paper concerns the investigation of the dynamic interactions between the electricity consumption and its main determinants. This can provide a new basis for discussion on the appropriate design and implementation of environmental and energy policies for Greece and other medium-sized economies with similar characteristics. The rest of the paper is organized in the following way. Section 2 briefly reviews the structure of the electricity sector in Greece. Section 3 deals with methodological issues and the data used in the empirical analysis, while in Section 4 the empirical evidence is presented. Finally, in Section 5, the conclusions of the analysis are summarized and policy implications are discussed.

In this paper we try to investigate the relationship between electricity consumption and economic growth in Greece within a multivariate framework. For this purpose we used cointegration techniques and the vector error correction model in order to capture short-run and long-run dynamics over the sample period 1970–2011. In order to estimate the short-run and long-run elasticities, we followed the two-step Engle and Granger (1987) methodology by estimating an ECM. The empirical results of the ECM are quite robust revealing that in the long-run electricity demand appears to be price inelastic and income elastic, while in the short-run the relevant elasticities are below unity. The results of price and income elasticities are comparable to those of other studies for Greece, while any small differences are attributed to the different sources, estimations periods and methodology employed in the various studies. From the Granger causality testing, we argue that the causal relationship between electricity consumption and economic growth in Greece is bi-directional. However, difference with other studies may be attributed to the longer sample period, the variable selection and the model specifications. This finding strengthens the notion that Greece is an energy dependent country and well directed energy conservation policies could even boost economic growth. This is in alignment with similar studies showing that the rebound effect from energy efficiency projects can be about 50%, while well specified energy projects can even “backfire” the economy, leading to high economic growth. Moreover, a dynamic impulse response analysis is used to examine the dynamic interactions in the model. The findings are quite plausible and verify previous empirical findings in the literature. Specifically, from the IRF showing the adjustment path after positive and negative shocks in all of the variables, we infer that the response of electricity consumption to a one standard deviation shock of GDP is zero for the first three periods and then becomes positive. Approximately the response of electricity demand after the third period to one standard deviation shock of output is nearly 15% per annum, implying that a 1% increase in the level of GDP's innovation causes a significant increase in the electricity consumption. Furthermore, the response of electricity demand after the third period to one standard deviation shock of price of light fuel oil is approximately 13% per annum, confirming the absence of substitutability between the two energy inputs (electricity and diesel) in the long-run. Effectively this outcome enhances the argument that the scope of residential energy switching is still limited. Regarding the temperature effect, it is worth mentioning that the insignificant contribution of heating degree days in tandem with the low variation levels of cooling degree days to the forecast error variance of electricity consumption may indicate that residential electricity is mainly used for specific energy uses other than heating and cooling (i.e. cooking, lighting, etc.). Furthermore, GDP is not the most important factor in explaining innovation to electricity consumption compared to other control variables such as price of electricity. On the contrary, electricity consumption is the single the most important factor in the explaining innovation to economic growth. Finally, as economic growth and environmental protection have been the national aims of Greece, alternative renewable energy sources such as biofuel, biomass, solar power, hydroelectricity, and wind power should be in place to ensure sufficient electricity supply to support economic growth and development. These strategies will also be in line with the EU objective to combat climate change through renewable energy and green technology. In addition, energy price reform will be another important policy element not only to conserve energy but also to encourage initiatives to explore and switch to alternative sources of energy which are more cost-effective and environment friendly.