The drivers of energy-related CO2 emissions in Brazil: a regional application of the STIRPAT model

Abstract

Since energy is one of the basic inputs for development, emerging economies should make an effort to investigate the environmental impacts of their fast economic growth. However, large emerging economies present significant regional heterogeneity that is usually uncounted for. This study uses the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) model and regional data on the 27 Brazilian states to investigate the growth-CO2 nexus under distinct development stages. To perform this analysis, we divided the states into three groups according to their average annual GDP (i.e., richer, intermediate, and poorer regions). The results suggest that richer and poorer regions, particularly, present economic and demographic developments that are environmentally costly. Also, population and per capita GDP have the largest influences on CO2 emissions. The roles of the industrial sector and the ascending service sector are also subject to criticism. Moreover, Brazil arguably suffers from technological stagnation as its energy intensity is growing and boosting CO2 emissions. We discuss the policy implications of these findings and suggest a future research agenda.