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Economic and environmental impacts of UK offshore wind development to 2029: the importance of local content

Author

Listed:
  • Grant Allan

    (Department of Economics, University of Strathclyde)

  • David Comerford

    (Department of Economics, University of Strathclyde)

  • Kevin Connolly

    (qDepartment of Economics, University of Strathclyde)

  • Peter McGregor

    (Department of Economics, University of Strathclyde)

  • Andrew G Ross

    (Department of Economics, University of Strathclyde)

Abstract

The continuing development of the offshore wind sector is an important element of UK energy and industrial policy since it holds the potential of substantial emissions reductions while simultaneously boosting economic activity. A central idea here is that the economic impact of the offshore wind sector can be enhanced by increasing the local content of its inputs. We explore, through simulation of a purpose-built Input-Output model of the UK, the economic and emissions impacts of the likely future development of the UK’s offshore wind sector, with a particular emphasis on the importance of local content. We explore six scenarios all of which embed the capacity expansion anticipated by the Sector Deal, but differ in terms of local content – including a set of illustrative simulations considering the possible impact of Brexit on local content. We find that future offshore wind development does indeed generate a “double dividend†in the form of simultaneous and substantial reductions in emissions and improvements in economic activity. It is also the case that, as anticipated, the scale of the economic stimulus arising from offshore wind development is directly and strongly related to the extent of local content.

Suggested Citation

  • Grant Allan & David Comerford & Kevin Connolly & Peter McGregor & Andrew G Ross, 2019. "Economic and environmental impacts of UK offshore wind development to 2029: the importance of local content," Working Papers 1910, University of Strathclyde Business School, Department of Economics.
  • Handle: RePEc:str:wpaper:1910
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    File URL: https://www.strath.ac.uk/media/1newwebsite/departmentsubject/economics/research/researchdiscussionpapers/19-10.pdf.pagespeed.ce.Z3p80oOB-E.pdf
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    References listed on IDEAS

    as
    1. Emonts-Holley, Tobias & Ross, Andrew & Swales, J Kim, 2015. "Type II Errors in IO Multipliers," SIRE Discussion Papers 2015-56, Scottish Institute for Research in Economics (SIRE).
    2. Allan, G.J. & Lecca, P. & McGregor, P.G. & Swales, J.K., 2014. "The economic impacts of marine energy developments: A case study from Scotland," Marine Policy, Elsevier, vol. 43(C), pages 122-131.
    3. Grant Allan & Kevin Connolly & Andrew G Ross & Peter McGregor, 2018. "Incorporating CO2 emissions into macroeconomic models through primary energy use," Working Papers 1818, University of Strathclyde Business School, Department of Economics.
    4. Emonts-Holley, Tobias & Ross, Andrew & Swales, J Kim, 2015. "Type II Errors in IO Multipliers," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-56, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    low carbon economy; industrial strategy; supply chain; offshore wind; economic impact; Brexit;
    All these keywords.

    JEL classification:

    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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