Energy demand convergence in APEC: An empirical analysis

- This study examines the convergence of energy and electricity consumption in APEC.
- Modern panel unit root tests including Sequential Panel Selection Model are used.
- Overall results show that energy and electricity consumption are converging in APEC.
- SPSM results show that energy usage is stationary in 15 out of 19 APEC countries.
- SPSM results show electricity usage is stationary in 17 out of 19 APEC countries.

This paper empirically examines the cross-country convergence of per-capita energy and electricity usage in APEC, a significant economic bloc. To this end, the study applies conventional panel unit root tests and Sequential Panel Selection Model (SPSM) procedure based on the Panel KSS unit root with a Fourier function for robustness analysis. The results from conventional unit root test results indicate that per capita energy usage and electricity consumption are converging for all APEC countries, in line with improving living standards in APEC. The findings also provide some support for policies to promote energy integration among APEC countries. According to SPSM analysis, evidence of energy convergence is found for 15 out of 19 APEC countries and evidence of electricity convergence is found for 17 out of 19 APEC countries. Pursuit of policies to achieve energy supply stability can move divergent countries toward convergence.