chapter  10
15 Pages

Spatial interactions between energy and energy- intensive sectors in the Brazilian economy: a field of influence approach

ByGERVÁSIO FERREIRA DOS SANTOS , EDUARDO HADDAD ,

Introduction The Brazilian economy is highly heterogeneous and marked by a high degree of spatial concentration (Azzoni 1997; Haddad 1999). After several decades of government policies designed to decrease this concentration, the effectiveness of these policies has been modest. Within the policy mix, energy-intensive sectors and energy producing sectors were seen as part of the core of the development policies of the country in the 1970s. As a consequence, the growth of these sectors strengthened the sectoral and spatial links in the Brazilian economy. Since the 1990s, the energy producing sectors have been subject to a variety of reform initiatives in Brazil that are changing the market structure and energy price levels. On the other hand, energy policy has stimulated energy diversification to increase inter-fuel substitution. These policies might have changed the sectoral and regional consumption pattern of energy in the country toward sectors and regions that are more or less energy-intensive. The spatial concentration of energy-intensive sectors in Brazil follows the same pattern of spatial concentrations of the whole economy. In 2004, 82.6 percent of the value-added of the energy-intensive sectors was located in the Center-South region (South-East and South) of Brazil. However, electricity consumption of these sectors represented 70.6 percent of the total amount consumed by the energy-intensive sectors. This 10 percent difference can be attributed to a set of regional factors such as energy diversification, product differentiation that increases value-added, economies of scale and more efficient energy uses. For this reason, there is a considerable spatial heterogeneity of electricity-intensity in energy-intensive sectors. This chapter explores the sectoral and spatial energy links in the Brazilian economy considering the spatial heterogeneity of the economy and of the variation in energy-intensity. The question that emerges in this chapter is: what are the most important sectoral and spatial energy links in the Brazilian economy? After this introduction, the next section describes the energy-intensive sectors in

the context of energy supply and demand in Brazil. In the third section the spatial distribution of energy-intensive sectors and their respective electricityintensity is presented. The fourth section presents the methodology of energy field of influence used to extract sectoral and spatial energy links in the Brazilian economy. Data requirements are presented in the fifth section and the results are discussed in the sixth section. The final section provides some summary comments.