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Simulating the impact of new industries on the economy: The case of biorefining in Australia

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  • Malik, Arunima
  • Lenzen, Manfred
  • Ely, Rômulo Neves
  • Dietzenbacher, Erik

Abstract

We investigate the economic and employment consequences of introducing a new sugarcane-based biofuel industry into Australia. We model the new biofuel industry on the production recipe of the existing large-scale gasoalcohol and alcohol sectors in the Brazilian economy. To this end we utilise a hybrid IO-LCA (input–output life cycle assessment) approach, which involves inserting data on new processes and/or sectors into an existing IO table. In particular, we develop and test an analytical and a numerical approach for re-balancing an IO table augmented with rows and columns representing large new biofuel industries. We quantify changes in economic output and employment in the Australian economy. We conclude that a future biofuel industry will be employment-positive for Australia.

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  • Malik, Arunima & Lenzen, Manfred & Ely, Rômulo Neves & Dietzenbacher, Erik, 2014. "Simulating the impact of new industries on the economy: The case of biorefining in Australia," Ecological Economics, Elsevier, vol. 107(C), pages 84-93.
    • Handle: RePEc:eee:ecolec:v:107:y:2014:i:c:p:84-93
    DOI: 10.1016/j.ecolecon.2014.07.022
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    6. Lorenzo Perrotta, 2020. "Impacto Regional del Desarrollo de Bioenergía (Biomasa) en Argentina. Un análisis Insumo-Producto para la provincia de Misiones," Asociación Argentina de Economía Política: Working Papers 4388, Asociación Argentina de Economía Política.
    7. Surís-Regueiro, Juan C. & Santiago, Jose L., 2018. "Assessment of Socioeconomic Impacts Through Physical Multipliers: The Case of Fishing Activity in Galicia (Spain)," Ecological Economics, Elsevier, vol. 147(C), pages 276-297.
    8. Kang, Jidong & Ng, Tsan Sheng & Su, Bin & Milovanoff, Alexandre, 2021. "Electrifying light-duty passenger transport for CO2 emissions reduction: A stochastic-robust input–output linear programming model," Energy Economics, Elsevier, vol. 104(C).
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    10. He, Kehan & Mi, Zhifu & Coffman, D'Maris & Guan, Dabo, 2022. "Using a linear regression approach to sequential interindustry model for time-lagged economic impact analysis," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 399-406.
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    12. Koelbl, Barbara S. & van den Broek, Machteld A. & Wilting, Harry C. & Sanders, Mark W.J.L. & Bulavskaya, Tatyana & Wood, Richard & Faaij, André P.C. & van Vuuren, Detlef P., 2016. "Socio-economic impacts of low-carbon power generation portfolios: Strategies with and without CCS for the Netherlands," Applied Energy, Elsevier, vol. 183(C), pages 257-277.
    13. Ageliki Anagnostou & Pawel Gajewski, 2021. "Multi-Regional Input–Output Tables for Macroeconomic Simulations in Poland’s Regions," Economies, MDPI, vol. 9(4), pages 1-19, October.
    14. Bagheri, Mehdi & Guevara, Zeus & Alikarami, Mohammad & Kennedy, Christopher A. & Doluweera, Ganesh, 2018. "Green growth planning: A multi-factor energy input-output analysis of the Canadian economy," Energy Economics, Elsevier, vol. 74(C), pages 708-720.
    15. Garrett-Peltier, Heidi, 2017. "Green versus brown: Comparing the employment impacts of energy efficiency, renewable energy, and fossil fuels using an input-output model," Economic Modelling, Elsevier, vol. 61(C), pages 439-447.
    16. Thomas Wiedmann, 2017. "On the decomposition of total impact multipliers in a supply and use framework," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 6(1), pages 1-11, December.
    17. Wolfram, Paul & Wiedmann, Thomas, 2017. "Electrifying Australian transport: Hybrid life cycle analysis of a transition to electric light-duty vehicles and renewable electricity," Applied Energy, Elsevier, vol. 206(C), pages 531-540.

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