The Trends of the Energy Intensity and CO2 Emissions Related to Final Energy Consumption in Ecuador: Scenarios of National and Worldwide Strategies

sustainability

Article The Trends of the Energy Intensity and CO2 Emissions Related to Final Energy Consumption in Ecuador: Scenarios of National and Worldwide Strategies

Flavio R. Arroyo M. 1,2,* and Luis J. Miguel 1,*

1 Systems Engineering and Automatic Control, School of Industrial Engineering, Paseo del Cauce s/n, University of Valladolid, 47011 Valladolid, Spain 2 Faculty of Engineering, Physical Sciences and Mathematics, Av. Universitaria, Central University of Ecuador, Quito 170129, Ecuador * Correspondence: ﬂ[email protected] (F.R.A.M.); [email protected] (L.J.M.)

Received: 29 November 2019; Accepted: 8 December 2019; Published: 18 December 2019

Abstract: Climate change and global warming are related to the demand for energy, energy efficiency, and CO2 emissions. In this research, in order to project the trends in final energy demand, energy intensity, and CO2 emission production in Ecuador during a period between 2000 and 2030, a model has been developed based on the dynamics of the systems supported by Vensim simulation models. The energy matrix of Ecuador has changed in recent years, giving more importance to hydropower. It is conclusive that, if industrialized country policies or trends on the use of renewable energy and energy efficiency were applied, the production of CO2 emissions by 2030 in Ecuador would reach 42,191.4 KTCO2, a value well below the 75,182.6 KTCO2 that would be seen if the current conditions are maintained. In the same way, by 2030, energy intensity would be reduced to 54% compared to the beginning of the simulation period.

Keywords: Business as usual (BAU); global warming; energy intensity; energy eﬃciency; CO2 emissions; energy policies

1. Introduction The scientific evidence is overwhelming for the proposition that global warming is due in great measure to the increase in CO2 levels in the atmosphere, as is the fact that the increase in CO2 concentration is due to human activity [1–4]. Climate change is currently one of the most pervasive and threatening problems. In many places, the changes in temperature are already placing ecosystems under stress and are also affecting human well-being [2]. Environmental change is happening at a much faster rate than previously thought, making it imperative that governments act now to reverse the damage that has been done to the planet [1,5]. The World Health Organization estimates that more than seven million people die every year due to poor air quality, and that three million of those deaths are premature. Several studies have shown that air pollution associated with the production and use of energy directly affects air quality and climate [6–12]. As global Gross domestic product (GDP) grew between 2014 and 2016, global fossil fuel emissions stagnated. However, this trend did not continue, and in 2017 global emissions increased by 1.6%. The projections of the Global Carbon Project suggest that CO2 emissions will grow by around 2.7%, reaching 37.1 gigatons by the year 3000 [4]. The main sources of air pollution are associated with inefficient transport systems, the use of electrical energy produced in power plants that consume fossil fuels, and also industrial activities.

Sustainability 2020, 12, 20; doi:10.3390/su12010020 www.mdpi.com/journal/sustainability Sustainability 2020, 12, 20 2 of 21

Between 1750 and 2011, cumulative anthropogenic CO2 emissions to the atmosphere were 2040 310 GTCO . About 40% of these emissions have remained in the atmosphere (880 35 ± 2 ± GTCO2)[5]; the rest have been removed from the atmosphere and stored on land (in plants and soils) and in theSustainability ocean. People’s 2020, 12, x FOR life PEER expectancy REVIEW is threatened by climate change through the2 of limitation 22 of access to water, food, medical care, and land. Therefore, it is important to reduce the consumption of Between 1750 and 2011, cumulative anthropogenic CO2 emissions to the atmosphere were 2040 fossil fuels and increase the use of renewable energy in order to minimize CO emissions [13]. ± 310 GTCO2. About 40% of these emissions have remained in the atmosphere (880 ±2 35 GTCO2) [5]; Sustainabilitythe rest have of been power removed systems from withthe atmosphere high renewable and stored energy on land penetration(in plants and ratessoils) and is a in topic the of major interest, especiallyocean. People’s when life considering expectancy is thethreatened intermittency by climate of change renewable through energy the limitation source of (RES)access to production and the actualwater, growingfood, medical trend care, of and energy land. Therefore, consumption it is important [6]. The to transitionreduce the consumption from fossil of fuels fossil to RESs is fuels and increase the use of renewable energy in order to minimize CO2 emissions [13]. an indispensableSustainability necessity of if power sustainable systems socio-economicwith high renewable systems energy penetration are to be realized.rates is a topic RES of variabilitymajor now representsinterest, a major especially challenge when when considering it comes the intermitte to upgradingncy of renewable power systems. energy source From (RES) a social production and economic perspective,and the the RES actual share growing in meeting trend of energy electricity consumption demand [6]. has The shown transition a steady from fossil growth fuels [to7 ].RESs The is increasing renewablean energy indispensable share necessity in electricity if sustainable generation socio-economic as a result systems of several are to be factorsrealized. such RES variability as environmental now represents a major challenge when it comes to upgrading power systems. From a social and constraints,economic technical perspective, and economic the RES aspects,share in meeting or social electricity implications demand hashas shown led to a a steady corresponding growth [7]. reduction in total COThe2 emissions increasing renewable [8]. energy share in electricity generation as a result of several factors such as The energyenvironmental return constraints, on investment technical (EROI) and metriceconomic includes aspects, factorsor social a ffimplicationsecting the wholehas led energyto a system that are notcorresponding accounted reduction for by in the total monetary CO2 emissions costs [8]. of individual power plants (such as additional The energy return on investment (EROI) metric includes factors affecting the whole energy costs for thesystem system that relatedare not accounted to distribution, for by the intermittency monetary costs of of RES, individual etc.) [ 14power–20 ].plants The transition(such as to new energy resourcesadditional and costs to for new the energy system conversionrelated to distri andbution, storage intermittency devices willof RES, aff ectetc.) the [14–20]. fraction The of energy reinvestment,transition which to new could energy have resources significant and to new economic energy conversion impacts and [21 storage–26]. devices Those will RESs affect with the a higher potential (i.e.,fraction wind, of energy and reinvestment, solar) have which been could generally have significant found economic to have impacts a lower [21–26]. EROI Those standard RESs (EROIst) with a higher potential (i.e., wind, and solar) have been generally found to have a lower EROI than fossilstandard fuels, especially (EROIst) than when fossil incorporating fuels, especially wh theen energy incorporating costs ofthe dealingenergy costs with of intermittencydealing with [9]. Energyintermittency and environmental [9]. objectives are a global problem and, in this regard, international agreements betweenEnergy and developed environmental and developingobjectives are countries a global problem are crucial and, in for this the regard, future international of the international energy situationagreements [10 ].between In 2015, developed world and leaders developing agreed countries to 17 goals are crucial that wouldfor the leadfuture to of a betterthe world international energy situation [10]. In 2015, world leaders agreed to 17 goals that would lead to a by 2030. Thesebetter world goals by have 2030. theThese power goals have to end the power poverty, to end fight poverty, inequality, fight inequality, and stop and climatestop climate change [11]. Technologicalchange progress, [11]. Technological the accumulation progress, the ofaccumulation capital, and of capital, the change and the change in the in structure the structure of production,of has contributedproduction, positively has contributed to the reductionpositively to of the energy reduction intensity. of energy Changes intensity. in Changes the composition in the of the energy supplycomposition (for example: of the energy the supply increasing (for example: importance the increasing of electricity) importance can of aelectricity)ffect productivity can affect [12]. productivity [12]. Energy intensityEnergy intensity has been has analyzed been analyzed and hasand beenhas been found found to to be be a keya key driver driver for for guidingguiding the the pathway of energypathway transition of energy towards transition achieving towards aachieving low carbon a low carbon economy economy [27 ,[27,28].28]. The The energy intensity intensity of the global economyof the global continues economy to continues fall. Global to fall. energy Global intensity—measuredenergy intensity—measured as theas the primary primary energy demand per unit ofdemand GDP based per unit on of the GDP 2016 based US on dollar the 2016 (USD) US do onllar a (USD) purchasing on a purchasing power paritypower parity (PPP) (PPP) basis—fell by basis—fell by 1.8% in 2016. This decline continued the recent trend of stable improvement. Even 1.8% in 2016.though This it was decline lower continued than it had been the recentin 2015, trendit was still of stablea significant improvement. increase on the Even averages though seen itin was lower than it hadthe been preceding in 2015, decades it was (see still Figure a significant 1). While increase GDP grew on by the 3% averages in 2016, seenglobal in energy the preceding demand decades (see Figureincreased1). While by only GDP 1.1% grew [29]. by 3% in 2016, global energy demand increased by only 1.1% [29].

Figure 1. FigureAnnual 1. Annual changes changes in global in global primary primary energyenergy intensity, intensity, 1981–2016 1981–2016 (US dollars (USdollars (USD), 2016). (USD), 2016). In Organization for Economic Co-operation and Development (OECD) countries and non-OECD economies, energy intensity has declined almost without interruption since 2000, averaging 1.6% per year to 2016, as seen in Figure2. In OECD countries, primary energy demand fell by 1%, despite a 32% increase in GDP; in other countries, energy demand rose by 80% while GDP increased by 150% [29]. Sustainability 2020, 12, x FOR PEER REVIEW 3 of 22

In Organization for Economic Co-operation and Development (OECD) countries and non-OECD economies, energy intensity has declined almost without interruption since 2000, averaging 1.6% per year to 2016, as seen in Figure 2. In OECD countries, primary energy demand fell by 1%, despite a Sustainability32%2020 increase, 12, 20 in GDP; in other countries, energy demand rose by 80% while GDP increased by 150% 3 of 21 [29].

Figure 2. PrimaryFigure 2. energyPrimary energy demand, demand, GDP, GDP, and and energy energy intensity intensity by by region region (2016 (2016 USD). USD). Organization Organization for Economic Co-operation andfor Development Economic Co-operation (OECD). and Development (OECD).

In 2016, globalIn 2016, investment global investment in energy in energy effi efficiencyciency increased by by9% 9%to USD to USD231 billion. 231 billion.This increase This increase matched with a slowdown in investment on the supply side of the energy system. Energy efficiency matched withinvestment a slowdown now represents in investment 13.6% of the onUSD the 1.7 supplytrillion invested side of across the the energy entire system.energy market Energy [29]. efficiency investment nowLatin represents America has 13.6% slowly of initiated the USD the integration 1.7 trillion of investedpolicies associated across thewith entirethe efficient energy use of market [29]. Latinenergy; America and hasthe integration slowly initiated of energy theefficiency integration programs of from policies the demand associated side. These with policies the e havefficient use of energy; andnot the achieved integration significant of results energy and e ffitheciency costs and programs benefits associated from the with demand the industrial side. and These electrical policies have sectors have not been applied in other sectors. Mexico and Brazil have been consolidating their not achievedinstitutional significant and regulatory results and frameworks the costs inand support benefits of energy associated efficiency withactivities. the industrialEnergy Intensity and electrical sectors haveis generally not been declining applied due in to other convergence sectors. and Mexico economic and development, Brazil have especially been consolidatingin energy- their institutionalimporting and regulatory countries, and frameworks in countries wi inth support significant of energy energy resources efficiency [30]. activities. Energy Intensity is generally decliningEnergy dueprices to have convergence a major effect and on economicenergy consumption. development, Higher prices especially may encourage in energy-importing the sectors of the economy to change their consumption behavior. In the residential sector, this factor can countries,represent and in countries changes in withhousehold significant habits for energy energy use. resources Furthermore, [30]. households can shift to energy- Energyefficiency prices technology have a major that could effect reduce on energyenergy co consumption.nsumption in the Highershort-term. prices However, may special encourage the sectors ofattention the economy should be to considered change their for this consumption factor because behavior.the improvements In the in residential energy efficiency sector, can this factor can representlower changesthe implicit in price household of energy and habits make forit more energy affordable. use. This Furthermore, issue represents households a rebound effect can shift to that may have an effect on the rest of the sectors [31]. The different behaviors of technology spillovers energy-effionciency energy technologyintensity suggest that that could measures reduce intendin energyg to make consumption efficient use of in energy the short-term. should accord However, special attentionwell with should the characteristics be considered and behaviors for this of each factor technology because spillover the improvements [32]. in energy efficiency can lower theThe implicit energy price sector ofconstitutes energy a and strategic make sector it more in all aeconomies,ffordable. the This engine issue of the represents productive a rebound effect thatsystem may haveand a crucial an eff factorect on for the the restsatisfaction of the ofsectors human needs. [31]. Today’s The di Ecuadorfferent is behaviors a net exporter of of technology primary energies, with oil being the main export item, which in 2016 represented 32.5% of revenues spilloversfor on the energy country. intensity The price suggest per barrel that of measuresoil for the year intending 2019, was to estimated make effi atcient 50.05 use USD of by energy the should accord wellauthorities with the of characteristicsthe economic front. and Ecuador behaviors is a memb of eacher of OPEC technology and that spilloverhas led to sacrifices [32]. in its The energylevels of sectorproduction. constitutes a strategic sector in all economies, the engine of the productive Ecuador has maintained a strong dependence on petroleum products. However, investments in system and a crucial factor for the satisfaction of human needs. Today’s Ecuador is a net exporter of renewable energy and new clean energy production technologies will improve the potential of the primary energies,Ecuadorian with energy oil matrix. being theAccording main exportto the 2017 item, energy which balance in 2016 published represented by the Ministry 32.5% of revenues for the country.Electricity The and priceRenewable per Energy barrel in of 2016, oil as for shown the in year Figure 2019, 3. was estimated at 50.05 USD by the authorities of the economic front. Ecuador is a member of OPEC and that has led to sacrifices in its levels of production. Ecuador has maintained a strong dependence on petroleum products. However, investments in renewable energy and new clean energy production technologies will improve the potential of the Ecuadorian energy matrix. According to the 2017 energy balance published by the Ministry of Electricity and Renewable Energy in 2016, as shown in Figure3. CO2 emissions were the main contributor to climate change in a period between 1750–2005 [33,34]. A reduction in access to water, food availability, land use are the main threats of climate change to the life expectancy of human populations. Therefore, minimizing CO2 emissions through the reduction of fossil fuel consumption and the increase in the use of renewable energy is essential [35]. Sustainability 2020, 12, 20 4 of 21 Sustainability 2020, 12, x FOR PEER REVIEW 4 of 22

Cane products 3874 KBOE Natural Gas Firewood 10488 KBOE 1824 KBOE

Renewables 17961 KBOE

Hydro Energy Oil 12263 KBOE 201012 KBOE

Oil Natural Gas Hydro Energy Cane products Firewood

FigureFigure 3. 3.Primary Primary energyenergy production (KBOE)—Year (KBOE)—Year 2016. 2016.

A positiveCO2 emissions relationship were the between main contributor CO2 emissions, to climate energy change consumption, in a period andbetween the type1750–2005 of energy has been[33,34]. observed. A reduction The in authors access to in water, [36] have food proposed availability, that land in theuse longare the term main for threats CIVETS of climate (Colombia, Indonesia,change Vietnam, to the life Egypt, expectancy Turkey, of human and South populations. Africa), Therefore, economic minimizing growth and CO energy2 emissions consumption through are the reduction of fossil fuel consumption and the increase in the use of renewable energy is essential determinants of the increase in CO2 emissions. A positive linear relationship between economic growth [35]. and emissions has been observed for ASEAN (Association of Southeast Asian Nations) [37]. In Taiwan, A positive relationship between CO2 emissions, energy consumption, and the type of energy has authors in [14] found a relationship between CO emissions with demographic and economic growth. been observed. The authors in [36] have proposed2 that in the long term for CIVETS (Colombia, The researchersIndonesia, Vietnam, in [15] foundEgypt, aTurkey, greater and correlation South Africa), between economic CO2 growthemissions and withenergy the consumption performance of the USare and determinants European of stock the increase market in than CO2 with emissions. China; A whilepositive the linear authors relationship in [16] proposedbetween economic a scenario to reducegrowth CO2 andemissions emissions with has a been reduction observed in energyfor ASEAN intensity. (Association A positive of Southeas and significantt Asian Nations) impact [37]. on CO2 emissionsIn Taiwan, in Nigeria authors was in related[14] found to the a relationship increase in between per capita CO GDP2 emissions and population with demographic [17]. Researchers and in [18economic] found that growth. energy The consumption researchers in has [15] positive found a e ffgreaterects on correlation CO2 emissions between and CO statistically2 emissions significant with for Europeanthe performance and Northern of the US Asianand European countries, stock Latin market America than with and China; the while Caribbean the authors and thein [16] Middle East,proposed and North a scenario and Sub-Saharan to reduce CO Africa.2 emissions The authorswith a reduction in [19]researched in energy intensity. the emissions A positive and and income significant impact on CO2 emissions in Nigeria was related to the increase in per capita GDP and relationship and established the incidence of the EKC in 22 OECD countries; using the data of six population [17]. Researchers in [18] found that energy consumption has positive effects on CO2 Central American Countries, and researchers in [20] established a causal relationship between economic emissions and statistically significant for European and Northern Asian countries, Latin America and growth,the Caribbean energy consumption and the Middle and East, CO and2 emissions. North and Sub-Saharan Authors in Africa. [21] applied The authors a model in [19] toresearched examine the relationshipthe emissions between and COincome2 emissions, relationship electricity and esta consumptionblished the incidence and economic of the EKC growth in 22 in OECD the case of the countriescountries; ofusing the Associationthe data of six of Central Southeast American Asian Countries, Nations. and A causality researchers relationship in [20] established between a CO2 emissions,causal relationship energy consumption between economic and economic growth, growthenergy consumption for nine newly and CO industrialized2 emissions. Authors countries in was found[21] [22 applied]. For a Brazil, model India,to examine China, the relationship and Russia between (BRIC) CO a dynamic2 emissions, relationship electricity consumption between economic and growth,economic energy growth consumption, in the case and of carbon the countries emissions of wasthe Association pointed out of [23 Sout], andheast for Asian Ecuador Nations. a significant A causality relationship between CO2 emissions, energy consumption and economic growth for nine decrease in CO2 emissions was associated with replacement technologies and changes in the energy newly industrialized countries was found [22]. For Brazil, India, China, and Russia (BRIC) a dynamic matrix [24]. relationship between economic growth, energy consumption, and carbon emissions was pointed out This research seeks to examine the causal relationship of the functioning of economic growth, [23], and for Ecuador a significant decrease in CO2 emissions was associated with replacement energytechnologies consumption and changes and CO in2 theemissions, energy matrix using [24]. a system dynamics model. Energy production and consumptionThis generateresearch seeks effects to thatexamine have the negatively causal relati effectsonship for of the the environment functioning [of25 economic]. Determining growth, future scenariosenergy will consumption allow obtaining and CO important2 emissions, information using a system for dynamics decision model. making Energy in relation production to the and current nationalconsumption energy model, generate in effects order tothat find have a sustainablenegatively effects energy for matrix the environment and to establish [25]. Determining environmental policiesfuture that scenarios allow economic will allow development obtaining important that takes info carermation of thefor environment.decision making in relation to the

2. Materials and Methods Climate change is one of the most serious challenges facing humanity in the 21st century. A policy-driven solution to prevent the most drastic effects of climate change requires a long-term Sustainability 2020, 12, 20 5 of 21 policy architecture that is independent, without exceptions, from the ideological party of the incumbent and successive governments in power, that is, without policy risk [38–40]. Increases in ambient temperature and changes in related processes are directly related to the increase in anthropogenic concentrations of greenhouse gases (GHG) in the atmosphere [41,42]. The estimates of the effectiveness of the measures to reduce the demand for energy services have a high level of uncertainty in the current conditions of climate policy where the final objective of climate mitigation has not yet been decided [43,44]. The concentration of CO2 in the atmosphere in July 2019 was 411.77 ppm [1]. The World Health Organization indicates that about 80% of cities exceed the limits of air quality, that is, nine out of ten people in the world breathe contaminated air, which means that it affects 92% of the world population [3]. The countries with the highest contribution in the CO2 emission for 2016 were China, the United States, India, Russia, and Japan, representing 28.21%, 15.99%, 6.24%, 4.53%, and 3.67% respectively [45]. While the majority of deaths associated with CO2 emissions occurred in urban centers in China, India, and Pakistan, representing 2.1 million people [46]. The dynamics of the system (DS) allows the interaction of different elements of a system over time, and incorporates concepts such as stock, flows, feedback, and delays, which allows for capturing the dynamic aspect of the process and providing a dynamic vision of the system behavior over time [26]. In this research, a dynamic model was designed using the Vensim graphic tool for the creation of simulation models that allows conceptualizing, documenting, simulating, analyzing, and optimizing system dynamics models. These model development procedures are designed to conceptualize, document, simulate, and analyze dynamic system models [47], which will allow a sensitivity analysis to examine the consistency of the model against changes in the values of the parameters. In fact, the dynamic systems method allows describing a problem dynamically, in this study the effects of energy consumption on the environment were analyzed; The variables used were population, energy supply and demand, CO2 emissions, and energy intensity. Energy consumption can be measured in primary or final terms, and by total or by disaggregating into different types of energy sources. Economic output can also be measured at sectorial or aggregated levels. GDP has been one of the most frequent [48–50]. It is difficult to find a definition of energy intensity that can make it suitable for using as an indicator of regional energy efficiency. Energy intensity, if calculated based on primary energy demand using the IEA/Eurostat methodology, will increase (worsen) if an economy uses more generation of nuclear and geothermal electricity. Nevertheless, if the energy intensity is calculated according to the final energy demand, it will not reflect improvements in the efficiency of electricity generation [51]. The energy intensity is defined as the energy consumed per unit of production. Energy intensity is inversely related to energy efficiency; the lower the energy required to produce an output or service unit, the greater the energy efficiency [52]. Energy intensity is the most commonly used aggregate indicator of a nation’s energy efficiency [27,53]. It usually be calculated as units of energy per unit of the industry’s value added or the country’s GDP.

Energy Intensity (EI) = Energy/GDP (1) where EI is the Energy Intensity; E is the total energy consumed and GDP is the gross domestic product expressed in dollars. Improving energy efficiency has been one of the highest priorities for achieving economic growth during the post-industrial phase of economic development. Energy efficiency is considered one of the most important factors to strengthen industrial competitiveness and energy security. A positive relationship between energy efficiency and business growth has been reported [53]. Energy efficiency is rarely traded as a commodity. Where it is traded, it is usually the result of government regulations to create a market for efficiency outcomes, such as energy savings, carbon dioxide emissions reductions, or electricity system adequacy (the ability of the power system to match the evolution in electricity demand) [29]. Sustainability 2020, 12, 20 6 of 21

The price of energy has shown a significant relationship (in terms of magnitude) with the growth rate of energy intensity [28], while capital and labor prices have shown an insignificant association with the growth rate of energy intensity [54]. The combination of higher fossil fuel-based energy prices coupled with a substantial increase in electricity supply could have opened the way for an increase in energy efficiency, which in turn has reduced the rate of growth in energy intensity [54]. An increase or decrease in energy intensity does not necessarily correspond to the real change in the energy efficiency of the sector. This is one of the main limitations when the energy intensity is calculated in terms of the economic production of the industrial sectors instead of the physical production [55]. Lower energy consumption does not have to come at the expense of lower economic growth, and the objectives of reducing energy intensity can be an acceptable and effective compromise for developing countries. However, for a considerable number of countries, energy intensity is not decreasing, energy intensity has increased or remained steady since the 1980s. For these countries, lower energy consumption and robust economic growth seem to be in conflict, given their current technologies and their economic and energy structures [56]. Energy plays a positive and statistically significant role in economic growth. The intensity of the energy is a measure that the energy grows towards its stable state [57]. Investments in modern and energy efficient technologies and products have also affected the growth of the economy. Reducing energy consumption is crucial to improve the economic efficiency of the economy and its positive impact on international competitiveness [33]. The GDP of individual economies or purchasing power parity (PPP) can drastically change the calculations of energy intensity improvement [34]. It has been suggested that purchasing power parity (PPP) is the most correct approach as it is the real purchasing power of each GDP that will drive the energy use of an economy [51]. A solid version of the PPP theory is based on the law of one price. Rounding up complicated factors such as transportation costs, taxes, and tariffs, the law of a price establishes that any good that is traded on world markets will be sold for the same price in all countries that are engaged in trade, when prices are expressed in a common currency [58]. The improvement in energy intensity for a group of economies will generally have a downward bias if calculated using market exchange rates instead of purchasing power parities [51]. Given the impact of the energy system on climate change, essentially emissions from fossil fuel combustion, many countries have made efforts to decouple energy use from economic growth. Decoupling consists of increasing the energy productivity of economic activities such that more output can be produced per unit of energy used [59–61]. Energy efficiency measures are expected to be the main factor in reducing energy intensity and an indicator of successful decoupling. In fact, energy policies in Europe and elsewhere place high expectations on energy efficiency improvements to reduce primary and final energy consumption [62].

2.1. Scenarios Considered for Analysis The construction of scenarios allows exposing a set of alternatives regarding the future. The construction of scenarios can be seen as a subset of strategic forecast that can be defined as the creation of multiple possible futures to support strategies [63,64]. The construction of the scenario is based on assumptions about what the future might look like one day: what direction certain trends could take, which developments could remain constant, and which could change over time. The scenarios are descriptions of journeys to possible futures [65]. They reflect different assumptions about how current trends will unfold, how critical uncertainties will develop, and what new factors will come into play [66]. The model combines different sectors through feedback mechanisms to capture the complexity of the behavior of the economic–climatic system. The matrix of productive sectors used in this study consists of six sections: (i) transport, (ii) industry, (iii) residential, (iv) commercial, services and public administration, (v) agriculture, fishing and mining, (vi) construction and others. The energy matrix Sustainability 2020, 12, x FOR PEER REVIEW 7 of 22

The model combines different sectors through feedback mechanisms to capture the complexity of the behavior of the economic–climatic system. The matrix of productive sectors used in this study consists of six sections: (i) transport, (ii) industry, (iii) residential, (iv) commercial, services and public administration, (v) agriculture, fishing and mining, (vi) construction and others. The energy matrix Sustainability 2020, 12, 20 7 of 21 consists of the following primary energy sources: oil, natural gas, hydroelectric power, cane products, and other primary products. The final energy sources are: electricity, LGP, gasoline, kerosene and consistsairdraft fuel, of the diesel, following fuel primaryoil, gases, energy reduced sources: crude oil, oil, natural and non-energy. gas, hydroelectric Non-conventional power, cane renewable products, andenergies other include: primary solar products. photovolta Theic, final wind, energy biomass, sources biogas, are:electricity, and biofuels. LGP, This gasoline, structural kerosene approach and airdraftallows a fuel,more diesel, scientific fuel represen oil, gases,tation reduced of feedback crude oil, relationships. and non-energy. Non-conventional renewable energiesA set include: of scenarios solar photovoltaic,was developed wind, that biomass, seeks to biogas, identify and trends biofuels. in energy This structural intensity approachand CO2 allowsemissions a more related scientific to final representation energy consumption of feedback relationships.in Ecuador. The scenarios necessarily include subjectiveA set elements of scenarios and was are developedopen to various that seeks interpretations. to identify trendsThe formulation in energy intensityof the scenarios and CO is2 emissionsnecessary relatedto predict to final the energyevolution consumption of the main in Ecuador. variables, The which scenarios can necessarilypromote energy include generation subjective elementspolicies, and and to are project open the to variousconsumption interpretations. and mitigation The formulationof CO2 emissions. of the scenarios is necessary to predictFor the the evolution purposes of this the mainresearch, variables, three scenar whichios can were promote proposed: energy BAU generation (abbreviation policies, of business and to projectas usual). the This consumption scenario refers and mitigation to the current of CO way2 emissions. in which the systems are being developed and what wouldFor happen the purposes if we ofcontinue this research, under threethe same scenarios conditions. were proposed: SCENARIO1 BAU considers (abbreviation all the of businesspolicies asproposed usual). Thisby the scenario national refers government to the current for wayfuture in pr whichojections. the systems SCENARIO2 are being is developeda scenario andof global what wouldtrends of happen industrialized if we continue countries. under the same conditions. SCENARIO1 considers all the policies proposedThe business by the national as usual government (BAU) scenario for future projects projections. the current SCENARIO2 trendsis identified a scenario by of globaleach nation, trends ofassumes industrialized that past countries. trends will continue in the future and that no new policies will be implemented for this caseThe businessof research as usualrelated (BAU) to energy scenario production projects theand current consumption. trends identified by each nation, assumes that pastSCENARIO1 trends will contemplates continue in thethe futuregovernment and that plans no new and policiesstrategies will th beat have implemented been established for this case for ofthe research coming related years toin energy Ecuador production regarding and energy consumption. production and consumption. The following documentsSCENARIO1 are taken contemplates into account: the government National En plansergy andAgenda strategies 2014–2040, that have Na beentional established Energy Balance for the coming2015–2017, years National in Ecuador Energy regarding Efficiency energy productionPlan 2016–2035, and consumption. Electricity TheMaster following Plan documents2016–2025, areElectrification taken into Master account: Plan National 2013–2022, Energy Analysis Agenda of 2014–2040,R&D&I opportunities National Energy in Energy Balance Efficiency 2015–2017, and NationalRenewable Energy Energies Effi ciencyin Ecuador, Plan 2016–2035,and National Electricity Climate Master Change Plan Strategy 2016–2025, of Ecuador Electrification 2012–2025. Master The Planpolicies 2013–2022, in SCENARIO1 Analysis raises of R&D&I concerns opportunities including: pr inioritizing Energy E thefficiency use of and renewable Renewable energy Energies sources, in Ecuador,promoting and the National use of hydroelectric Climate Change energy, Strategy and repl ofacing Ecuador inefficient 2012–2025. thermal The generation. policies in SCENARIO1The massive raisesintroduction concerns of efficient including: lighting prioritizing in homes the and use pu ofblic renewable roads is energy proposed. sources, It suggests promoting the application the use of hydroelectricof standard and energy, technical and replacing regulations ine ffiforcient the thermallabeling generation. of household The appliances, massive introduction and the replacement of efficient lightingof equipment in homes with and high public energy roads consumption. is proposed. The It repl suggestsacement the of application LPG by electricity of standard is proposed and technical with regulationsthe implementation for the labeling of induction of household cookers, appliances, implementation and the of replacementenergy management of equipment systems with in high the energymain industries. consumption. The scenario The replacement promotes of the LPG implementation by electricity is of proposed sustainable with transport the implementation that considers of inductionelectricity cookers,and not implementation hydrocarbons of as energy the managementmain source systemsof energy. in the The main scenario industries. also The considers scenario promotesimprovement the implementation in the management of sustainable of electricity transport companies that considers necessary, electricity an energy and not sovereignty hydrocarbons is asconsidered the main sourceas one of energy.the pillars The of scenario a new Ecuador. also considers improvement in the management of electricity companiesFinally, necessary, SCENARIO2 an energy considers sovereignty the environmental is considered dimension as one of of the sustainable pillars of adevelopment new Ecuador. goals, globalFinally, environmental SCENARIO2 considersgovernance, the environmentalmultilateral dimensionenvironmental of sustainable agreements, development and global goals, globalmacroeconomic environmental perspectives governance, for su multilateralstainable development, environmental replacemen agreements,t strategies and global for macroeconomic clean energy perspectivesand energy efficiency, for sustainable are considering development, the replacement projections strategiesor trendsfor of cleanthe reports energy of and organizations energy efficiency, such areas the considering Intergovernmental the projections Panel or on trends Climate of the Change reports (IPCC), of organizations International such Energy as the Agency Intergovernmental (IEA), and PanelBP, among on Climate others Change (Figure (IPCC),4) International Energy Agency (IEA), and BP, among others (Figure4).

Figure 4. General block diagram of the model. Figure 4. General block diagram of the model. 2.2. Modeling and Simulation The modelling of the energy system is a complex problem due to the presence of multiple decision makers, the complexity of consumer behavior, the feedback processes between the modules, technological limitations, and various types of delays. The system dynamics model (SDM) is Sustainability 2020, 12, x FOR PEER REVIEW 8 of 22

2.2. Modeling and Simulation The modelling of the energy system is a complex problem due to the presence of multiple Sustainabilitydecision makers,2020, 12 ,the 20 complexity of consumer behavior, the feedback processes between the modules,8 of 21 technological limitations, and various types of delays. The system dynamics model (SDM) is an anappropriate appropriate approach approach to tomodel model such such complexities, complexities, since since it itis is a a powerful powerful modeling modeling technique to understand andand exploreexplore thethe feedbackfeedback structure structure in in complex complex systems. systems. The The strength strength of of this this model model lies lies in itsin its ability ability to understandto understand nonlinearity nonlinearity in thein the dynamics, dynamics, feedback, feedback, and and delay delay time time [67 [67].]. The proposed system dynamics model was simulated using Vensim software, a modeling tool commonly used to build, simulate,simulate, and analyze dynamic model systems based on causal loops or stock and flow ﬂow diagrams. The The system system dynamics dynamics mode modell was was designed designed to to estimate estimate energy energy consumption, consumption, economic growth, energy intensity, and CO2 emissions in Ecuador in 2030. To accomplish the economic growth, energy intensity, and CO2 emissions in Ecuador in 2030. To accomplish the research objective,research objective, traditional traditional energy resources energy reso of Ecuadorurces of areEcuador considerate are considerate (Figure5). (Figure 5).

Figure 5. SimplifiedSimpliﬁed influence inﬂuence diagram for the input-output analysis in the Ecuador model.

An economy that depends more on fossil fuels will have more emissions than an economy An economy that depends more on fossil fuels will have more emissions than an economy that that depends on renewable energy [17]. The primary energy matrix of Ecuador has historically depends on renewable energy [17]. The primary energy matrix of Ecuador has historically been been dominated by oil production Figure6. Historically renewable energies have not had a great dominated by oil production Figure 6. Historically renewable energies have not had a great participation in a primary energy matrix. However, the production of hydropower has increased participation in a primary energy matrix. However, the production of hydropower has increased by by 72% between 2000 and 2015, while the production of other primary sources such as wind and 72% between 2000 and 2015, while the production of other primary sources such as wind and photovoltaicSustainability 2020 energy, 12, xbegan FOR PEER in 2007REVIEW [68 ]. 9 of 22 photovoltaic energy began in 2007 [68].

Figure 6. Evolution of primary energy production in kilobarrels of oil equivalents (KBOE) [68]. Figure 6. Evolution of primary energy production in kilobarrels of oil equivalents (KBOE) [68].

Research on the analysis of emissions and energy consumption has been carried out in Ecuador, including an analysis of the possible dimension of the physical impact of climate change and its economic quantification in different areas, such as water resources, agriculture, biodiversity, marine and coastal resources, health, infrastructure, extreme events, and the Galapagos Islands were carried out by the Economic Commission for Latin America and the Caribbean (ECLAC) in 2013. To analyze carbon emissions, energy consumption, and sustainable development in Ecuador between 1980 and 2025, reference [69] used SDM, decomposition analysis, and the Kuznets curve. A study on carbon emissions in Ecuador to generate policies to promote its reduction was conducted by reference [70]. Likewise, reference [71] analyzed the scenarios of national government policies and global trends that mark the way forward in the search for the reduction of energy consumption, energy efficiency, and the mitigation of CO2 emissions in Ecuador by 2030. Total secondary energy production in Ecuador has remained at levels close to 70 million BEP between 2003 and 2015, with fuel oil as the main secondary energy produced in the country, followed by diesel until 2011, after which electricity became the second main energy source produced, and is currently almost on par with fuel oil production (Figure 7).

Figure 7. Evolution of secondary energy production (KBOE) [68].

Of the six economic sectors in terms of final energy consumption identified at the national level by 2015, transport had a 46% share of the total energy demanded by the country’s sectors, industries reached 19%, and the residential sector reached 13% (Figure 8). Although there was a 4% reduction in sectoral energy consumption in the country in 2015 compared to 2014, there was an increase in the demand for transport (2%) and for households (1.6%). This fact has been justified mainly by lower energy consumption in the industry (−4.5%) and in other sectors [68]. Sustainability 2020, 12, x FOR PEER REVIEW 9 of 22

Sustainability 2020, 12, 20 9 of 21 Figure 6. Evolution of primary energy production in kilobarrels of oil equivalents (KBOE) [68].

ResearchResearch on on the the analysis analysis ofof emissionsemissions and energy energy consumption consumption has has been been carried carried out out in Ecuador, in Ecuador, includingincluding an an analysis analysis of ofthe the possiblepossible dimensiondimension of of the the physical physical impact impact of of climate climate change change and and its its economiceconomic quantification quantification in indi differentfferent areas,areas, such as water water resources, resources, agriculture, agriculture, biodiversity, biodiversity, marine marine andand coastal coastal resources, resources, health, health, infrastructure, infrastructure, extremeextreme events, events, and and the the Galapagos Galapagos Islands Islands were were carried carried outout by by the the Economic Economic Commission Commission forfor LatinLatin America and and the the Caribbean Caribbean (ECLAC) (ECLAC) in in2013. 2013. To Toanalyze analyze carboncarbon emissions, emissions, energy energy consumption, consumption, andand sustainablesustainable development development in in Ecuador Ecuador between between 1980 1980 and and 2025,2025, reference reference [69 [69]] used used SDM, SDM, decompositiondecomposition anal analysis,ysis, and and the the Kuznets Kuznets curve. curve. A Astudy study on oncarbon carbon emissionsemissions in in Ecuador Ecuador to to generate generate policiespolicies to prom promoteote its its reduction reduction was was conducted conducted by byreference reference [70]. [70 ]. Likewise,Likewise, reference reference [71 [71]] analyzed analyzed the the scenarios scenarios of of national national government government policies policies and and global global trends trends that markthat the mark way the forward way forward in the searchin the search for the for reduction the reduction of energy of energy consumption, consumption, energy energy efficiency, efficiency, and the mitigationand the mitigation of CO2 emissions of CO2 emissions in Ecuador in Ecuador by 2030. by 2030. TotalTotal secondary secondary energy energy productionproduction in Ecuador has has remained remained at at levels levels close close to to70 70million million BEPBEP betweenbetween 2003 2003 and and 2015, 2015, with with fuelfuel oiloil as the main secondary secondary energy energy produced produced in inthe the country, country, followed followed by diesel until 2011, after which electricity became the second main energy source produced, and is by diesel until 2011, after which electricity became the second main energy source produced, and is currently almost on par with fuel oil production (Figure 7). currently almost on par with fuel oil production (Figure7).

Figure 7. Evolution of secondary energy production (KBOE) [68]. Figure 7. Evolution of secondary energy production (KBOE) [68]. Of the six economic sectors in terms of final energy consumption identified at the national level Of the six economic sectors in terms of final energy consumption identified at the national level by 2015, transport had a 46% share of the total energy demanded by the country’s sectors, industries by 2015, transport had a 46% share of the total energy demanded by the country’s sectors, industries reached 19%, and the residential sector reached 13% (Figure8). Although there was a 4% reduction in reached 19%, and the residential sector reached 13% (Figure 8). Although there was a 4% reduction sectoral energy consumption in the country in 2015 compared to 2014, there was an increase in the in sectoral energy consumption in the country in 2015 compared to 2014, there was an increase in the demand for transport (2%) and for households (1.6%). This fact has been justified mainly by lower Sustainabilitydemand for2020 transport, 12, x FOR PEER(2%) REVIEWand for households (1.6%). This fact has been justified mainly by lower 10 of 22 energy consumption in the industry ( 4.5%) and in other sectors [68]. energy consumption in the industry (−−4.5%) and in other sectors [68].

Figure 8. Evolution of consumption by sector (KBOE) [68]. Figure 8. Evolution of consumption by sector (KBOE) [68].

ECO2 = ∑Est × FCEt (2)

where ECO2 is the total of CO2 emissions; “s” is the consumer sector; “t” is the type of final energy consumed; and FCEt is the conversion factor of CO2 emissions per type of energy consumed. The conversion factors for CO2 emissions (FCEt) from the different energy sources employed to calculate ECO2 are shown in Table 1.

Table 1. CO2 emission conversion factors [78].

Conversion Factors CO2 Emission (Kg CO2/BOE) (Kg CO2/TJ) Petroleum 448.54 73,300 Natural gas 343.29 56,100 Firewood 685.36 112,000 Cane Products 433.24 70,800 Electricity − − Petroleum liquid gas 386.13 63,100 Gasolines 424.06 69,300 Kerosene and Turbo 439.97 71,900 Diesel 453.44 74,100 Fuel Oil 473.63 77,400 Solar / Wind − − Asphalts and lubricants 448.54 73,300

2.3. Model Validation After the model has been calibrated using the original system dataset, a “final” validation is conducted using the second system dataset. The validation of a system dynamics model consists of two broad components: structure validation and behavior validation. The validation of the structure means establishing that the relationships used in the model are an adequate representation of the real relationships, with respect to the purpose of the study. Behavior validation consists of demonstrating that the behavior of the model is “close enough” to the actual behavior observed. Sustainability 2020, 12, 20 10 of 21

Related studies between energy consumption and polluting emissions support the impact of the structure of energy consumption on air [72–74]. GDP growth and fossil fuel energy consumption are mentioned as major sources of CO2 emission [75–77]. The total of emissions produced is calculated with the following expression: X ECO = Est FCEt (2) 2 × where ECO2 is the total of CO2 emissions; “s” is the consumer sector; “t” is the type of ﬁnal energy consumed; and FCEt is the conversion factor of CO2 emissions per type of energy consumed. The conversion factors for CO2 emissions (FCEt) from the diﬀerent energy sources employed to calculate ECO2 are shown in Table1.

Table 1. CO2 emission conversion factors [78].

2.3. Model Validation After the model has been calibrated using the original system dataset, a “final” validation is conducted using the second system dataset. The validation of a system dynamics model consists of two broad components: structure validation and behavior validation. The validation of the structure means establishing that the relationships used in the model are an adequate representation of the real relationships, with respect to the purpose of the study. Behavior validation consists of demonstrating that the behavior of the model is “close enough” to the actual behavior observed. The validation of the model to test its predictive power and robustness in the first instance was performed comparing the official data from 2000 to 2015. The validation method was performed by calculating the mean absolute percentage error (MAPE), which is defined as:

1 P At Ft MAPE(%) = − 100 (3) n At × where MAPE is the mean absolute percentage error, and At, Ft, and “n” are the real data, the calculated values, and the number of data, respectively. Table2 shows the values obtained from the MAPE method. These results indicate the strength of the model. In this investigation, we note that CO2 emissions come from the burning of fossil fuels consumed by the six economic sectors of Ecuador. Sustainability 2020, 12, 20 11 of 21

Table 2. Model validation results.

GDP Energy Demand Energy Intensity CO2 Emissions Real Data Simulated Real Data Simulated Real Data Simulated Real Data Simulated Year MAPE (%) MAPE (%) (BOE/Thousands of (BOE/Thousands of MAPE (%) MAPE (%) (milesUSD2007) (milesUSD2007) (KBOE) (KBOE) (MegatonsCO ) (MegatonsCO ) USD 2007) USD 2007) 2 2 2000 37,726.4 37,726.4 0.0 60,202.5 63,775.6 0.1 1.6 1.6 0.0 27,477.0 27,658.8 0.0 2001 39,241.4 38,162.1 0.0 60,164.4 63,506.3 0.1 1.5 1.6 0.1 26,229.0 27,800.0 0.1 2002 40,849.0 39,773.0 0.0 60,122.5 63,198.1 0.1 1.5 1.5 0.0 25,480.0 27,642.7 0.1 2003 41,961.3 41,485.2 0.0 61,213.8 65,506.6 0.1 1.5 1.5 0.0 28,607.0 29,022.7 0.0 2004 45,406.7 42,670.0 0.1 63,329.1 66,579.8 0.1 1.5 1.5 0.0 28,709.0 29,856.4 0.0 2005 47,809.3 46,348.4 0.0 63,418.0 65,335.1 0.0 1.4 1.3 0.0 27,491.0 27,691.1 0.0 2006 49,914.6 48,922.8 0.0 59,648.0 62,570.7 0.0 1.3 1.3 0.1 26,540.0 26,168.1 0.0 2007 51,007.8 51,183.0 0.0 61,734.0 64,899.0 0.1 1.3 1.3 0.1 27,010.0 27,223.6 0.0 2008 54,250.4 52,360.0 0.0 64,515.0 66,877.2 0.0 1.3 1.2 0.1 27,500.0 27,537.8 0.0 2009 54,557.7 55,856.6 0.0 69,555.0 70,066.1 0.0 1.3 1.2 0.1 28,000.0 29,302.6 0.0 2010 56,168.9 56,190.9 0.0 69,718.0 69,081.3 0.0 1.3 1.2 0.1 30,100.0 28,917.2 0.0 2011 60,569.5 58,273.6 0.0 74,931.0 75,832.7 0.0 1.4 1.3 0.1 32,000.0 31,507.4 0.0 2012 64,106.0 63,089.0 0.0 77,789.0 79,499.1 0.0 1.3 1.2 0.1 34,000.0 32,906.5 0.0 2013 67,081.0 66,957.7 0.0 81,610.0 81,746.5 0.0 1.3 1.2 0.1 35,400.0 335,94.5 0.1 2014 69,632.0 70,437.8 0.0 86,048.0 86,519.7 0.0 1.4 1.2 0.1 36,800.0 35,464.2 0.0 2015 70,345.0 73,388.8 0.0 86,323.0 90,329.3 0.0 1.4 1.2 0.1 37,000.0 35,902.8 0.0 2.18 3.49 5.65 3.04 Sustainability 2020, 12, x FOR PEER REVIEW 13 of 22 Sustainability 2020, 12, 20 12 of 21

3. Results 3. Results Ecuador has maintained an energy combination based on fossil sources, where renewable energyEcuador source has technologies maintained anwere energy constrained combination by based poor on development, fossil sources, wherebut now renewable have energygreater sourceparticipation technologies with the were start-up constrained of large by capacity poor development, hydroelectric but plants. now have greater participation with the start-upFigure of9 shows large capacity three scenarios hydroelectric of primary plants. energy supply. The BAU projects a lower primary energyFigure supply,9 shows mainly three since scenarios the other of primary two scenar energyios propose supply. Theenergy BAU production projects a and lower exploitation primary energypolicies. supply, In SCENARIO1, mainly since national the other government two scenarios policies propose include the energy construction production of new and hydroelectric exploitation policies.projects as In well SCENARIO1, as the continuation national government of oil exploitati policieson [79], include so the the growth construction of energy of newsupply hydroelectric is justified projectsmainly in as the well implementation as the continuation of hydroelectric of oil exploitation megaprojects [79], so the[80]. growth Primary of energy supplyproduction is justiﬁed under mainlynational in policies the implementation will reach 436,847.13 of hydroelectric KBOE. megaprojects [80]. Primary energy production under national policies will reach 436,847.13 KBOE.

Primary energy supply - BAU Primary energy supply - Scenario 1

500000 500000

400000 400000

300000 300000 KBOE

200000 KBOE 200000

100000 100000

0 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Biomass Cane Products Firewood Hydraulics Biomass Cane Products Firewood Hydraulics Natural Gas Oil Solar Wind Natural Gas Oil Solar Wind

Primary energy supply - Scenario 2

500000

400000

300000 KBOE

200000

100000

0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Biomass Cane Products Firewood Hydraulics Natural Gas Oil Solar Wind

Figure 9. Primary energy supply scenarios. Figure 9. Primary energy supply scenarios. The projection of the final energy production in Ecuador gives us the result that the BAU scenario projectsThe the projection greatest growthof the reachingfinal energy 228,167.83 production KBOE in by Ecuador 2030, while gives the us scenarios the result based that on the national BAU orscenario global projects policies the showed greatest lower growth values reaching in final 228,167.83 energy production, KBOE by reaching2030, while very the similar scenarios values based of 182,586.26on national KBOE or global and policies 129,412.62 showed KBOE lower (Figure values 10). in Thefinal lower energy values production, may be reaching due to thevery fact similar that industrializedvalues of 182,586.26 countries KBOE have and greater 129,412.62 energy KBOE efficiency (Figur ande 10). are The committed lower values to increasing may be due their to energythe fact generationthat industrialized from renewable countries sources, have greater reducing energy the use efficiency of fossil and fuels are [81 committed] while in the to caseincreasing of Ecuador, their oilenergy is its generation main source from [71]. renewable sources, reducing the use of fossil fuels [81] while in the case of Ecuador, oil is its main source [71]. SustainabilitySustainability2020 2020,,12 12,, 20x FOR PEER REVIEW 1413 of 21 22

Final energy supply - BAU Final energy supply - Scenario1

250000 250000

200000 200000

150000 150000 KBOE KBOE 100000 100000

50000 50000

0 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Diesel Oil Electricity Fuel Oil Diesel Oil Electricity Fuel Oil Gases Gasolines Kerosene and Turbo Gases Gasolines Kerosene and Turbo LGP Non Energetic Residue LGP Non Energetic Residue

Final energy supply - Scenario 2

250000

200000

150000 KBOE 100000

50000

0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030

Diesel Oil Electricity Fuel Oil Gases Gasolines Kerosene and Turbo LGP Non Energetic Residue

Figure 10. Final energy supply scenarios. Figure 10. Final energy supply scenarios. The projected final energy demand reaches 206,681.22 KBOE in the BAU scenario, being the fastest growingThe (Figureprojected 11 ).final Projecting energy the demand scenarios reaches that consider206,681.22 national KBOE policiesin the BAU or world scenario, trends, being we canthe observefastest growing that the (Figure production 11). Projecting decreases, the mainly scenarios due tothat the consider efficiency national of the policies type of energyor world planned trends, towe be can used observe [82]. Thethat ethefficiency production of hydropower decreases, is main muchly betterdue to than the theefficiency efficiency of the offossil type fuelsof energy [83], theplanned transition to be to used renewable [82]. Th energiese efficiency seen of in hydropower both scenarios is much leads usbette to ar than demand the efficiency projection of of fossil 171,093.94 fuels and[83], 112,286.78 the transition KBOE to inrenewable the sceneries energies 1 and seen 2, respectively. in both scenarios leads us to a demand projection of 171,093.94Figure and12 shows 112,286.78 the di KBOEfferent in scenarios the sceneries of GDP 1 and growth 2, respectively. in Ecuador. Economic growth in any of the scenarios will be affected by the oil barrel price. Government policies are set based on the growth of exports of non-traditional products, the exploitation of new oil fields, and mainly by the level of foreign investment [84]. Ecuador has proven oil reserves of 8.3 billion barrels [48]. The average GDP growth rate for the simulation period shows a 3.84% growth in the BAU scenario, 3.22% in SCENARIO1, and 3.45% in SCENARIO2. SustainabilitySustainability2020 2020,,12 12,, 20 x FOR PEER REVIEW 1514 of of 21 22

Final Energy Demand BAU Final Energy demand Scenario1 210000 210000 180000 180000 150000 150000

120000 120000 KBOE

KBOE 90000 90000

60000 60000

30000 30000

0 0 2000 2004 2008 2012 2016 2020 2024 2028 2000 2004 2008 2012 2016 2020 2024 2028

Cane Products Diesel Oil Electricity Cane Products Diesel Oil Electricity Firewood Fuel Oil Gasolines Firewood Fuel Oil Gasolines Kerosene and Turbo LGP Natural Gas Kerosene and Turbo LGP Natural Gas Non Energetic Oil Own Consumption Non Energetic Oil Own Consumption

Final Energy demand Scenario2

210000

180000

150000

120000

KBOE 90000

60000

30000

0 2000 2004 2008 2012 2016 2020 2024 2028

Cane Products Diesel Oil Electricity Firewood Fuel Oil Gasolines Kerosene and Turbo LGP Natural Gas Sustainability 2020, 12, x FOR PEER REVIEWNon Energetic Oil Own Consumption 16 of 22

Figure 11. Final energy demand scenarios. Figure 11. Final energy demand scenarios. Scenarios GDP Ecuador Figure 12 shows150000 the different scenarios of GDP growth in Ecuador. Economic growth in any of the scenarios will be affected by the oil barrel price. Government policies are set based on the growth of exports of non-traditional130000 products, the exploitation of new oil fields, and mainly by the level of foreign investment [84]. Ecuador has proven oil reserves of 8.3 billion barrels [48]. The average GDP 110000 growth rate for the simulation period shows a 3.84% growth in the BAU scenario, 3.22% in SCENARIO1, and90000 3.45% in SCENARIO2.

70000 thousands USD 2007 thousands 50000

30000 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030

BAU SCENARIO1 SCENARIO2

Figure 12. GDP Ecuador scenarios (thousands USD 2007). Figure 12. GDP Ecuador scenarios (thousands USD 2007).

Energy intensity is currently an indicator of the energy efficiency of a sector and therefore of a country. Economic growth is directly related with the efficient use of energy [49]. Figure 13 shows the projections of the Energy Intensity in Ecuador. The BAU scenario shows a growth in energy intensity in the 2016–2030 simulation period, with the increase being 1.42%. On the other hand, SCENARIO1 and SCENARIO2 have more positive projections that reach an energy intensity of 1.08 and 0.96, respectively. Currently, Ecuador which maintains an energy combination heavily based on fossil fuel energy, presents inefficiency indicators, mainly in the transport and industry sectors [68].

Energy Intensity 1.80

1.60

1.40

1.20

1.00 BEP/thousands US dollars of 2007 of dollars US BEP/thousands 0.80 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030

BAU SCENARIO1 SCENARIO2

Figure 13. Energy intensity scenarios BOE/USD 2007.

Figure 14 shows the evolution and projection of total CO2 emissions by the final energy consumption in the country between 2000 and 2030. Since 2009, the production of CO2 emissions begins with a constant growth and is very similar to the rate of global average emissions growth, while since 2015 the total emission values began to grow by a smaller percentage due to the energy matrix change policies proposed by the national government [79]. Sustainability 2020, 12, x FOR PEER REVIEW 16 of 22

Scenarios GDP Ecuador 150000

130000

110000

90000

70000 thousands USD 2007 thousands 50000

30000 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030

BAU SCENARIO1 SCENARIO2

Figure 12. GDP Ecuador scenarios (thousands USD 2007). Sustainability 2020, 12, 20 15 of 21

Energy intensity is currently an indicator of the energy efficiency of a sector and therefore of a country.Energy Economic intensity growth is currently is directly an indicatorrelated with of the the energy efficient effi useciency of energy of a sector [49]. andFigure therefore 13 shows of athe country. projections Economic of the growth Energy is directlyIntensity related in Ecuado with ther. The efficient BAU use scenario of energy shows [49]. a Figure growth 13 showsin energy the projectionsintensity in of the the 2016–2030 Energy Intensity simulation in Ecuador. period, The with BAU the scenarioincrease shows being a1.42%. growth On in energythe other intensity hand, inSCENARIO1 the 2016–2030 and simulation SCENARIO2 period, have with more the positive increase projections being 1.42%. that Onreach the an other energy hand, intensity SCENARIO1 of 1.08 and 0.96, SCENARIO2 respectively. have Currently, more positive Ecuador projections which maintains that reach an anenergy energy combination intensity ofheavily 1.08 andbased 0.96, on respectively.fossil fuel energy, Currently, presents Ecuador ineffi whichciency maintainsindicators, an mainly energy in combinationthe transport heavily and industry based onsectors fossil [68]. fuel energy, presents inefficiency indicators, mainly in the transport and industry sectors [68].

Energy Intensity 1.80

1.60

1.40

1.20

1.00 BEP/thousands US dollars of 2007 of dollars US BEP/thousands 0.80 2000 2003 2006 2009 2012 2015 2018 2021 2024 2027 2030

BAU SCENARIO1 SCENARIO2 Figure 13. Energy intensity scenarios BOE/USD 2007. Figure 13. Energy intensity scenarios BOE/USD 2007. Figure 14 shows the evolution and projection of total CO2 emissions by the ﬁnal energy consumption in the country between 2000 and 2030. Since 2009, the production of CO2 emissions Figure 14 shows the evolution and projection of total CO2 emissions by the final energy begins with a constant growth and is very similar to the rate of global average emissions growth, while consumption in the country between 2000 and 2030. Since 2009, the production of CO2 emissions since 2015 the total emission values began to grow by a smaller percentage due to the energy matrix Sustainabilitybegins with 2020 a , constant12, x FOR PEERgrowth REVIEW and is very similar to the rate of global average emissions growth, 17 of 22 change policies proposed by the national government [79]. while since 2015 the total emission values began to grow by a smaller percentage due to the energy matrix change policies proposed by the national government [79]. CO2 emissions 80000

70000

60000

50000 KT CO2

40000

30000

20000 2000 2005 2010 2015 2020 2025 2030

BAU SCENARIO1 SCENARIO2

Figure 14. CO2 emissions (KT CO2).

Figure 14. CO2 emissions (KT CO2). If the proportion of current energy sources were maintained, CO2 emissions would increase by 2030 (BAU scenario). However for the scenarios that contemplate an energy combination with a higher If the proportion of current energy sources were maintained, CO2 emissions would increase by proportion2030 (BAU ofscenario). renewable However energies, for emissions the scenarios from that all sectors contemplate would decreasean energy signiﬁcantly, combination reaching with a higher proportion of renewable energies, emissions from all sectors would decrease significantly, reaching low levels in Ecuador. The projections of CO2 emissions from final energy were 75,182.6; 43,938.3, and 342,191.4 KTCO2 in the BAU, SCENARIO 1, and SCENARIO 2, respectively.

4. Discussion

low levels in Ecuador. The projections of CO2 emissions from ﬁnal energy were 75,182.6; 43,938.3, and 342,191.4 KTCO2 in the BAU, SCENARIO 1, and SCENARIO 2, respectively.

4. Discussion

In order to analyze the energy intensity of Ecuador and project the production of CO2 emissions in Ecuador during the period 2000–2030, an integrated systems dynamics model was developed based on a Vensim software framework [80]. The BAU, SCENARIO1, and SCENARIO2 projections for 2030 maintain a growth in the supply and demand of final energy in relation to the 2015 values. The projections of final energy demand forecast the largest increase in the BAU scenario at 206,681.22 KBOE and the lowest growth for SCENARIO2 at 112,286.78 KBOE. A close relationship could be observed between the final energy supply and the final energy demand, which could be mainly associated with a transition towards energy production from renewable energies [58,85–87]. The application of the measures derived from the BAU, SCENARIO1, and SCENARIO2 project an approximate increase of 42% in GDP by 2030 compared to 2015 GDP, the year in which the simulation of the model began, while SCENARIO2 forecasts a smaller increase compared to the other two scenarios of 34% (Figure 12). A significant reduction in energy intensity could be expected. This improvement would be associated with a change in the national energy matrix; through the replacement of the use of fossil fuels by renewable energy sources [88,89]. SCENARIO1 and SCENARIO2 expect a production of CO2 emissions of 43,938.3 and 42,191.4 KTCO2 by 2030, respectively. If environmental trends are taken into account and policies proposed by developed countries, the production of carbon emissions would reduce the average growth rate from 1.64% in SCENARIO1 to 1.08% in SCENARIO2. Energy efficiency contributes to the reduction of expenses in the entire energy chain, decreases the dependence on energy imports, mitigates damage to the global and local environment, contributes to the improvement of the productive efficiency of the country and has positive impacts in terms of social equity [90–92]. It also directs economic activity towards activities of high added value and low energy consumption. Recent efforts in energy efficiency have not achieved what is necessary in a transversal way and the results thus far have not met expectations. This is largely because the largest amount of energy used in Ecuador comes from fossil sources. Since 2016, fossil fuels have represented 77.65% of total energy consumption, with the transport sector being the main emitter of greenhouse gases. Sectors such as transport or industry maintain a tendency to consume more energy, and due to its fossil origin, these sectors produce a greater amount of emissions and are very inefficient in terms of energy. In the transport sector, it is necessary to review the quality of the fuel and the quality of the hydrocarbons. The infrastructure for transport circulation must be optimized, contributing to reduction of fuel consumption. Projects must be continued to replace inefficient public transport technologies. The results obtained through the system dynamics model, developed to simulate the scenarios of energy intensity and production of CO2 emissions by 2030, will work as a basis for proposals for future energy policies aimed at mitigating emissions and improving national energy efficiency. In comparison with the works carried out and cited in the bibliographic review, it is observed that this research shows a more up-to-date panorama on the economic-environmental scenario of Ecuador. The energy perspective may change depending on the projects implemented by the government. The projection of the studies carried out shows a notable increase of CO2 emissions if the current conditions of energy consumption and the energy mix based on non-renewable energies are maintained. Sustainability 2020, 12, 20 17 of 21

5. Conclusions Considering the hydroelectric potential of Ecuador, an energy combination is observed where hydropower and other renewable sources would have a greater participation, such as those that reduce the production of CO2 emissions. The increasing use of hydropower in recent years has played a fundamental role in reducing CO2 emissions. The development of renewable energies is important for Ecuador, though policies are needed to facilitate a greater supply of clean energy. The use of energy from natural sources must be encouraged. Projects such as The Metro in Quito and the Tram in Cuenca are the beginning of a transition toward a more sustainable public transport model. The use of hydropower should also be promoted, as well as fossil fuel replacement policies, the use of induction cookers instead of LPG, and the use of electric vehicles for light transportation and passengers. The replacement of fuels modifies the intensity of energy due to its different level of efficiency. Considering that fossil fuels are a main source of total energy consumption, it is a must for Ecuador to improve energy efficiency due to a reduction of expenses throughout the energy chain, decrease in emissions and improvement in the country’s productivity. The industrial sector must continue with projects that improve its performance, and it is essential to change energies, meaning the industrial sector must migrate to more efficient sources of energy. It is necessary to replace inefficient equipment, such as engines, pumps, boilers, and water heaters in industry, as well as to apply cogeneration systems and embrace an energy management system. Considering the importance of renewable energy in Ecuador, we recommend promoting the development of a market of Energy Services Companies, which would generate income and encourage improvement measures in the industrial sector. This would lead to savings obtained by the decrease of energy consumption. It is necessary to increase the efficient use of energy in residential, commercial, and public buildings, through regulations on the habitability criteria in the buildings. We must strengthen equipment replacement programs with higher energy consumption and appliance labeling, and replace public lighting luminaires with more efficient ones, as well as strengthening the energy efficiency program for induction cooking and water heating with electricity. The creation and improvement of technical capacities in this area of energy efficiency should be encouraged; the training, certification, and accreditation of experts in energy efficiency and energy management should be promoted, in order to incorporate best practices and standards in the different sectors of Ecuador.

Author Contributions: Investigation F.R.A.M.; conceptualization, F.R.A.M. and L.J.M.; methodology, F.R.A.M. and L.J.M.; software, F.R.A.M. and L.J.M.; writing—original draft preparation F.R.A.M.; writing—review and editing F.R.A.M. and L.J.M.; supervision L.J.M.; validation L.J.M. All authors have read and agreed to the published version of the manuscript. Funding: This research received no external funding. Conﬂicts of Interest: The authors declare no conﬂict of interest.

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