The Effect of Hydroelectricity Consumption on Environmental Degradation – The Case of South America region

Abstract

This article analyses the impact of hydroelectricity consumption on environmental degradation (CO2 emissions) in seven South American countries, in a period from 1966 to 2015. The Unrestricted Error Correction Model (UECM) form of the Auto-regressive Distributive Lag (ARDL) was utilized. The initial tests prove the presence of heteroskedasticity, cross sectional independence, and first-order autocorrelation. The results show that the consumption of hydroelectricity causes a reduction of -0.0465 in environmental degradation in the short run, and increase 0.0593 in the long-run. This empirical evidence could encourage the creation of new policies, which introduce new energy technologies that release zero carbon in the energy matrix.