Innovative Accounting Approach for environmental, energy and economic variables for Portuguese and Spanish sectors

摘要

The Iberian Peninsula is one of the European regions most affected by climate change (European Environmental Agency). Given the peculiarity of these two countries (Portugal and Spain) in the integration of the electricity market and on the similarity of energy and environmental policies adopted in both, it is relevant to study the relationship between variables such as CO2 emissions, energy consumption, and economic growth in the past and predict their relationship in the future. Panel VAR was implemented, including forecast error variance decomposition and impulse response functions, using data from 1975 to 2012 for selected economic sectors. It was noticed that as CO2 decreases, energy consumption decreases in the short-run, but economic activity increases, may be due to the mix of fossil fuels used in economic activity. Reducing energy consumption changes CO2 emissions with simultaneous change in technology used in energy resources. Results also reveal differences among the two countries.