Challenges and opportunities in the energy transition of agribusiness: A deep dive into the rebound effect in Latin America

Abstract

Growing climate change concerns have intensified the focus on agribusiness sustainability, driving an urgent energy transition to improve production efficiency and mitigate environmental harm. The complex interplay between energy efficiency and energy consumption highlights the essential role of strategic energy policies in ensuring sustainable development. This study used the Double-Log regression model with bootstrap resampling to examine the rebound effect in the energy transition of agribusiness focusing on five Latin American countries including Brazil, Argentina, Uruguay, Colombia, and Mexico based on the agricultural sector data during 2010–2022. The findings revealed that the rebound effect significantly influences energy transition, with varying degrees of impact across agricultural sectors. This study identified partial rebound effect across all five countries, with elasticity coefficient varying from 9.63% (Colombia’s coffee sector) to 89.12% (Brazil’s livestock sector). In Brazil’s sugarcane sector, non-renewable energy, agricultural employment, and irrigation efficiency were identified as key factors influencing energy consumption, while in livestock sector, energy consumption was affected by CH₄ emissions, income and well-being of farmers, water consumption, and water conservation practices. In Mexico’s livestock sector, CH₄ emissions, non-renewable energy, and water conservation practices were the key factors affecting energy consumption. In Argentina’s sugarcane sector, pesticides, NO₂ emissions, renewable energy, and agricultural employment were the key factors affecting energy consumption, while renewable energy, income and well-being of farmers, and water consumption were the key factors affecting energy consumption in livestock sector. In Uruguay’s livestock sector, non-renewable energy, income and well-being of farmers, and irrigation efficiency were the key factors affecting energy consumption. In Colombia’ coffee sector, NO₂ emissions and irrigation efficiency were identified as key factors influencing energy consumption. Finally, this study reinforces the importance of aligning energy transition with Sustainable Development Goals (SDGs), ensuring that energy efficiency gains do not inadvertently increase energy consumption or environmental degradation.