Sofía Teives Henriques (Lund University, Suecia)
The second half of the nineteenth century became known for the breakthrough of industrialization in many European Nations that included, among other things, the widespread adoption of steam technology used in Britain several decades before. Coal was a key element in most of the technological adoptions which occurred in the period that lasted until the outbreak of World War I. It was the age of heavy engineering dominated by railways, steam and steel. In addition to a revolution in processes of making steel (Bessemer process and Siemen-Martins open hearth) in the early 1850s and widespread use of steam in most of the economic sectors, the period was accompanied by a transport revolution (railways and steam-ships) that connected the world in terms of international trade, where the few leading industrialized countries supplied the rest of the world with coal, steel and manufactured products in exchange for food and raw materials .
Coal was the key element in industrialization, and with the available technology impossible or difficult to substitute for in many uses such as steamships, railways and town gas. The main problem for many countries was that world reserves were unevenly distributed. England, Germany and Belgium were all well endowed with good quality coal, but some countries, like Sweden, Italy and Portugal were not so lucky in the lottery of natural resources. Coal could of course be traded, but being a bulky commodity, transportations costs could significantly increase its price. Transportation costs could difficult the implementation of key heavy industries where energy costs were important, difficult competition with foreign products and enlarge or promote competitive disadvantages between regions. A relevant question in this context is to what degree the lack of coal influenced, shaped or delayed the industrialization process in coal-poor countries. Different points of views exist on the matter. While Bardini argues that the lack of coal was a predominant factor of the Italian economic lag until the First World War, Kunnas & Myllyntaus noticed that the industrial use of traditional energy carriers such as water or wood was competitive in many branches and that coal did not particularly harm industrial development.
The Second Industrial Revolution that started in the 1870s and that had as a major breakthrough the emergence of electricity with potentially enormously productivity gains has been pointed by many as a solution for the problem of lack of coal resources in poor endowed countries. An automatically advantage of electricity is that it could be produced by almost any primary energy carrier. The line of argument, follows, that with the help of relative high prices of coal during World War I, electricity, mostly hydraulic, had gained momentum and developed at increasing rates of adoption. Poorly endowed coal countries had probably more incentive to develop this technology than richer ones, and also more opportunities to gain technological leadership or catching up at this point . Not only the relative prices were arguably more advantageous to those countries, but also coal intensive countries had comparatively more vintage capital to depreciate and could not so fully take advantage of this new promising energy form. A group of coal-poor countries (Sweden, Norway, Italy) took the leadership in many technological processes associated with electricity. The fossil fuel argument fades off.
Portugal was far from these breakthroughs for a long time. For almost one century (1850-1938) per capita GDP and per capita energy consumption continually diverged in relation to the most industrialized countries in Europe. We can even say that Portugal practically missed the two industrial revolutions. The country neither succeeded in the age of coal nor in the age of electricity. The Portuguese poor economic performance was only reversed after World War II – an achievement basically obtained during the age of oil.
The goal of this paper is to provide a reflection on the failures and successes of the Portuguese industrialization process in the context of natural resource endowments, especially energy, as a limiting factor to growth. In order to do so we compare energy costs in relation to other European countries and to wages and its reflex in the country industrial structure. Did Portugal´s sluggish growth and generally low coal intensity path have something to do with relatively expensive coal in relation to other European Countries in the catching up phase of the First Industrial Revolution? In which way did the use of traditional renewable natural resources in a first phase, and hydroelectricity in a second phase, compensate for the lack of fossil fuels? Were they good enough to make industrialization viable? Lastly, what kind of parallelisms, differences and reflections can we find between the use of indigenous and renewable energy sources in the past and the recent European Union renewable energy policies?
