Role Of Energy In Economic Development

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This research reviews literature on the important role of energy in economic growth and development highlighting the use of energy in production. 2.1 Energy Consumption & Economic Growth Various literatures, have established a relationship between energy supply, its consumption and economic growth with respect to developing and developed countries. From each of these papers, it can be conveniently established from the cases studied that an adequate and reliable supply of energy is a prerequisite for development (Shallgram Pokharel; 2001) Research works by Kraft and Kraft in 1978 have provided evidence to support a unidirectional causality between income and energy consumption between the periods of 1967-1974 in the United States. Since then,…show more content…
Much of the literature on energy and development, focuses mainly on how energy demand is driven by economic development (see, e.g., Barnes and Floor 1996) and on how energy services can be improved for developing countries (Dunkerley et al 1981; Barnes and Floor, 1996). Less is found in literature on energy and development in the context of the marginal development of energy versus other inputs growth as an agent of economic development. However, it cannot be overlooked that there are substantial differences in energy forms and in the nature of economic activities across different stages of development. Notably, the nature of relationship among energy, other inputs of production and economic activity clearly change significantly as an economy moves through different stages of development. The term "energy ladder" is used to describe this phenomenon (Barnes and Floor, 1996) with respect to lower income levels, energy sources tend primarily to be from biological sources (wood, dung, sunshine). More processed fuels (charcoal), animal power, and some commercial energy become more prominent in the intermediate stages of income levels. Commercial fossil fuels and other energy forms – primary fuels, and ultimately electricity – become predominant in more advanced stages of industrialization and…show more content…
Imoro Braimah and Dr. Owusu Amponsah on the “Causes and Effects of Frequent & Unannounced Electricity Blackouts on the operation of Micro & Small Scale Industries in Kumasi” (February, 2012) had as its objective, to examine the causes & effects of frequent & unannounced electricity blackouts on the operations of micro & small scale, industries in Kumasi, Ghana. The research collected primary data through questionnaires from 320, Micro Small Scale Industries selected from 3 industrial clusters in the Kumasi metropolis as well as seven institutions in – charge of energy access plan, preparation, and implementation and monitoring and evaluation in Ghana. The research findings are as follows; frequent and unannounced blackouts resulted in a 5.3% deficit in the electricity required for continuous operations. 44% of Micro Small Scale Industries spent an average of 10.3 hours being redundant due to lack of alternative power source in periods of blackouts but maintained labour cost of production. This further implies that, the Micro small scale industries though experienced a deficiency in electricity required for production they lost 10.3 hours of labour hours signaling a fall in productive output as a result of the deficient in electricity resource representing 44% of the sampled
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