Econometric Modeling of Eco-Efficiency in Costa Rican Electricity Companies Using Smart Grid

Abstract

Eco-efficiency expresses the efficiency with which ecological resources are used to meet human needs. It is considered as the average of an output divided by an input; the first is the value of products and services produced by a company, sector, or economy as a whole, and the second, the sum of the environmental pressures generated by the company, sector, or economy. Eco-efficiency is measured depending on the typification of indicators of inputs and outputs. For this, an econometric modeling was established, based on Harrod-Domar’s macroeconomic theory, which expresses the indispensable conditions in a capitalist or market economy, to generate the volume of necessary global demand and, thus, to allow the sustained and balanced development, without abandoning the Keynesian system. This model considers the productive capacity as a variable over time and establishes that an investment differential is equal to the savings differential. In this article, we study the behavior of the Harrod-Domar model to determine a basic econometric equation that provides an improvement in the eco-efficiency curve applied to Costa Rican electricity companies. The improvement curve in environmental technology aims to demonstrate theoretically that there is economic growth, by obtaining a reduction in the percentage of expenses or outputs against the environment, with the implementation of smart grid technologies.