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Renewable Energy

The contemporary world is highly concerned about a potential drastic climate change, catastrophic consequences of global warming, and scarcity of virtually all natural resources. While the first two issues primarily worry environmentalists and ecologists, who warn the international community about the negative impact of the further extensive economic and industrial development and emphasize the need to take urgent measures, the third problem makes anxious mostly governments and economists. The matter is that scarcity of natural resources means that all economic processes will be affected. Meanwhile the humanity will have no opportunity not only to develop industrially, but will also face a threat of impossibility to satisfy basic and not so important needs, for instance, in water, clean air or electricity. Hence, researchers have been interested in solving this problem, in particular by promoting the use of renewable energy sources that are environmentally friendly. Its use is especially promising for such rapidly developing countries like Mexico and Brazil that can significantly benefit from applying clean energy. It can improve their economies, contribute to the preservation of the environment, and ensure the sustainable development of communities.

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Energy consumption is currently higher than ever all over the world, including such rapidly developing countries as Brazil and Mexico. Hence, the current energy application is estimated to be at the level of 471.8 oxyjoules. However, renewable energy sources supply only a minor part of this staggering amount with fossil fuels giving about 87% (Aleman-Nava et al., 2014). This extensive use of fossil fuels has a detrimental impact on the environment. The use of traditional energy sources generates greenhouse gasses and thus contributes to global warming and environmental pollution. Besides, fossil fuels are not scarce natural resources. They are forecast to be exhausted within several decades to several centuries depending on the particular resource and the nature of their application. For instance, global oil reserves that are known today are predicted to be wasted in about 54 years if the current production level is maintained (Aleman-Nava et al., 2014). Therefore, almost all countries of the world, including Brazil and Mexico, have been recently considering to increas the percentage of the renewable energy application in their energy portfolios. The reason is related to a number of benefits offered by such move. Energy usage patterns of these countries will be discussed in more detail below. Although governments of both Mexico and Brazil seem to realize the need to diversify their energy portfolios with renewable energy sources, the Brazilian government has succeeded in this respect more than its Mexican counterpart. It explains the international leading positions of the country in terms of clean energy production and use. This aspect will also be discussed below with a particular focus on how governmental support and policies can promote environmentally and economically sustainable changes in the energy sectors of the two countries.

Preference in Energy Usage in Mexico and Brazil

Brazil and Mexico significantly differ in terms of their energy production and use patterns as well as preferences as evident. Hence, Mexico overwhelmingly relies on fossil fuels, which represent almost 87% of the total energy production with charcoal with about 3%. Its nuclear energy is being at the level of more than 1% (Aleman-Nava et al., 2014). In turn, renewables take up only about 7% of the total energy with biomass being the most prevalent source of renewable energy in the country at the level of 3.79% of the total energy and hydropower. Geothermal energy sources are being roughly equal at the rate of about 1.5% (Aleman-Nava et al., 2014). Solar and wind power sources are almost non-represented in the country and together amount to only 0.14% (Aleman-Nava et al., 2014). At the same time, it should be noted that energy production is an extremely significant sector of the Mexican economy. It contributes about 3% to the GDP of the country, as well as producing 8% of all exports and generating 37% of the state budget in oil-related taxes (Aleman-Nava et al., 2014). Moreover, more than a half of all public investments are allocated to energy projects.

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Such preference in Mexico may be explained by presence of large crude oil and natural gas reserves in the country. That is why the government supports their exploitation and export of obtained resources to enrich the state. The reason is related to the world’s overall reliance on oil and natural gas. The Mexican petroleum company called PEMEX is the 7th largest, while Mexico is among the biggest oil producers globally (Aleman-Nava et al., 2014). Similarly, Mexico is the 16th country in the world in terms of electricity production. Its electricity coverage is available to 95% of the country’s population, which is an impressive indicator for Latin America (Aleman-Nava et al., 2014). This state exports oil, natural gas, diesel, and electricity. It is expected to further develop its economy through the reliance on energy production, yet recently the government has started paying attention to renewable energy sources. The reason is related to the immense country’s potential in this respect and the need to diversify its energy portfolio.

The situation in Brazil is completely different from the one described above. Currently, almost a half of all energy generated in the state comes from renewable sources, while 89% of electricity is derived from renewable energy sources (Pao & Fu, 2013). It makes Brazil one of the cleanest states in the industrialized world in terms of energy use. Meanwhile its total renewable power capacity is the 3rd largest globally after China and the USA (Pao & Fu, 2013). Such high percentage of the renewable energy in the total use of the country is remarkable if to take into consideration that Brazil has been rapidly developing in the recent past. It is including the industrial development and continues its economic growth with the forecast indicating the following fact. It can become the 5th largest economy in the world by 2025 (Pereira et al., 2012). Similarly to Mexico, almost the entire population of the country has some access to electricity. However, contrary to Mexico, it occurs primarily due to the use of renewable power plants. More than 70% of all energy in Brazil comes from hydraulic sources with biomass being the second largest source of energy (Pereira et al., 2012). Although wind and solar energy sources still play minor roles in total energy production in Brazil just like in Mexico. The former country has more solar and wind power plants due to the launch of recent projects. Therefore, based on current energy preferences Brazil can be considered as more sustainable than Mexico. Yet it should be noted that both countries do not use their renewable energy potential to the full extent available due to their geographic locations. Thus, Brazil is not among the principal emitters of greenhouse gases in the world despite its high level of industrialization and rapid economic development. In turn, Mexico’s economy has not been developing as rapidly as the Brazilian one. Its rate of industrialization is much lower. Yet it is among the principal emitters of greenhouse gases right after Germany, Canada, and the UK, which may be explained by its reliance on traditional energy sources.

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Geographical Location and Possible Renewable Energy Sources in Mexico and Brazil

Differences in the energy use preferences and the tendency to apply renewable energy can be explained by some differences in geographical and climate conditions of Mexico and Brazil. The total area of Mexico is about 1.9 million km2 with the islands in the nearby Caribbean Sea, Pacific Ocean, and two gulfs (Aleman-Nava et al., 2014). However, the population, as well as water and other resources are not evenly distributed across the country. Hence, 60% of people reside in the northern and central parts, which have only about 10% of all water resources (Aleman-Nava et al., 2014). This uneven distribution of rivers and other water sources partially explains the unpopularity of hydropower in the state. Overall, Mexico’s geography is quite complex. There are several weather zones there, which help explain differences in the usage of renewable energy sources between the southeastern, northern, and central regions. The geography of Brazil differs from the Mexican one in terms of having a more even distribution of water and other resources. Moreover, the area of the country is much larger with 8.5 million km2 (Pereira et al., 2012). Similarly to Mexico, some parts of Brazil, for instance, in the Amazonian forests, are remote and difficult to access. It makes their coverage with electricity and other basic amenities problematic. Nevertheless, abundance of rivers and their general accessibility are the core reasons why hydropower is so popular and widely-used in Brazil as compared with Mexico. Besides, weather conditions of the former country with strong winds throughout the entire year are conducive to the use of wind as a renewable energy source (Pao & Fu, 2013). Due to their geographic location both Mexico and Brazil receive a lot of solar power throughout the year. It makes the use of this particular energy source a viable option for both states.

Overall, there are distinguished several possible renewable sources of energy. They are commercially viable, including solar energy, wind power, hydraulic energy, and biomass applied for production of ethanol and biodiesel. Both countries under consideration have an opportunity to use all these sources for production of energy due to their climatic and geographic peculiarities. However, the current extent of their application and potential maximum capacity differ. Since Mexico largely depends on traditional energy sources, exact capacities for renewable sources are not known even. However, the latter ones attract much attention in the scholarly literature with biomass and solar power being determined as the most promising and economically viable energy sources (Aleman-Nava et al., 2014). Under the governmental policy, the renewable energy sector should account for 35% of total energy generated in the country by 2024 with capacities of biomass, geothermal, wind, and solar energy being expect to increase to 1, 2, 12, and 1.5GW respectively (Aleman-Nava et al., 2014).

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In turn, Brazil already prioritizes renewable energy use. That is why there are the studies about each possible renewable energy application with known expected and maximum capacities. Hence, solar power is used in Brazil for both heath and lighting. However, it plays a minor role in the overall energy sector with total 20 MWp (Pereira et al., 2012). This amount is expected to grow in future because of the privileged position of Brazil. It means in terms of the solar power it receives annually and the launch of several projects aimed at developing this renewable energy. The current capacity of wind power in this state is much higher than that of Mexico with 744 MW and the estimated potential of 143 GW in the future once more turbines in windy regions are installed (Pereira et al., 2012). As mentioned above, Brazil currently uses hydraulic power as a key energy source, being at the 2nd position globally with 374 TWh generated annually (Pereira et al., 2012). Moreover, the country can increase its capacity to 1488 TWh per year through the installation of large and small hydroelectric plants (Pereira et al., 2012). Contrary to Mexico that only plans to use biomass, Brazil already realizes the potential of this source. Therefore, it occupies the 2nd place in the world after the US in terms of ethanol production (Pereira et al., 2012). It plans to dedicate more agricultural lands to sugarcane used to produce ethanol without any increase in the deforestation. In terms of biofuels, Brazil currently bases its production on soy oil. However, it plans to cultivate other oilseed plants as well. Withal, though both countries have the potential to use renewable energy sources and increase their respective capacities only Brazil of the two ones seems to realize this and exploit available opportunities. Mexico, on the contrary, has the favorable conditions for using renewables. Yet it fails to do that because of its overreliance on traditional energy sources.

The Role of Government in the Usage of Renewable Energy Sources and Awareness of Communities in Mexico and Brazil

The above noted differences in the energy use preferences and overall use of renewables in Mexico and Brazil can be partially explained by different positions of governments. At the first glance, governments of both countries support the use of renewable energy sources and prioritize increases in their part in the energy sector within the next decade. However, in practice, the Brazilian government does not only declare its commitment like the Mexican one. However, it also launches a wider range of incentives, tax subsidies, and development grants than its Mexican counterpart. Both governments have released the reforms in the energy sector since the 1990s though with slightly different focuses. Hence, the Mexican state has invested a lot in its oil and gas production. Recently, the National Strategic Plan for Development has been approved that prioritizes an increase of the renewables capacity to 26% and pledges to promote its use (Aleman-Nava et al., 2014).

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Nevertheless, no significant induction in the renewable energy use has been noted in Mexico so far with most investments going to traditional sources. The situation is different in Brazil where the country not only commits to promotion of renewables, but also does that. For instance, the Brazilian government has recently adopted the National Climate Change Plan. Under it, a high share of renewable energy in the energy sector has to be maintained and increased further (Pereira et al., 2011). It has also implemented the PROINFA, which has already produced real increases in the application of wind, biomass, and small hydroelectric power at the level of 3,300 MW (Pereira et al., 2011). These and other initiatives of the Brazilian government bring large investments into the renewable energy sector and promote its further development contrary to Mexico. There the commitment largely remains unfunded. As a result, the awareness of communities in the states remains different with Brazilians being more committed to using renewables as compared with Mexicans who continue preferring traditional energy sources. Therefore, the level of the population’s anxiety about benefits and potential of using the renewables should be increased in Mexico, at least to the level of Brazilians. They prioritize clean energy in all domains of life, including their homes and cars.

Economic Impact of the Renewable Energy Use

Use of the renewable energy not only allows reducing volumes of greenhouse gases emitted and promoting the preservation of the environment. However, it also is economically beneficial. It has been estimated that the increased use of renewables benefits the country’s economy by ensuring that it is energy-independent and sustainable without any essential reliance on international oil and natural gas prices (Pao & Fu, 2013). On the example of Brazil, Pao & Fu (2013) have estimated that expanding renewable energy can enhance the country’s economic growth and create a competitive advantage for the state on the international arena. Besides, such economic development would be sustainable and promote improvements in the economy, in general, and labor, energy, and agricultural sectors, in particular. Mexico would also benefit from following Brazil’s path of development prioritizing the sustainable development through the increasing use of the renewables since the latter one has managed to grow extremely rapidly over the past decades. Currently, Mexico’s energy sector is dependent on oil, coal, and natural gas, which can harm the country in case of international crises. Therefore, it calls for diversification of the energy portfolio.

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Withal, the two countries under consideration differ in terms of their use of renewable energy. However, both Brazil and Mexico seem to realize the potential of substituting traditional energy sources with the renewable ones. Hence, Brazil is nowadays among the leading countries with account for the percentage of clean energy derived from renewable sources in its energy portfolio. Meanwhile Mexico prefers using fossil fuels and charcoal as primary energy roots. Nevertheless, both countries are quite similar in terms of having a tremendous potential of substituting traditional energy sources with the renewable ones. The reason is related to their beneficial geographical location and presence of large water bodies, as well as availability of solar and wind power sufficient for energy production. Moreover, both states are promising in terms of using biomass as the energy source without a need for further deforestation. Nevertheless, Brazil remains far ahead Mexico in terms of the renewable energy application, largely due to the government’s interest in its promotion and capacity increase and the community’s awareness and support. Therefore, Mexico would significantly benefit from following Brazil’s example and diversifying its energy portfolio with a larger share of renewables. It would also contribute to the decrease in emissions of greenhouse gases and overall environmental protection.

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