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Not in my backyard? The local impact of wind and solar parks in Brazil

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  • Scheifele, Fabian
  • Popp, David

Abstract

Support from local citizens is important for the scale-up of renewable energy. We investigate the impact of utility-scale wind and solar parks on employment, GDP and public finances in Brazilian municipalities using a difference-in-differences design with matching. We find a positive employment impact of 1-1.3 jobs/MW in the 15 months preceding the commissioning of a solar park, when the park is under construction, but no impacts thereafter. For wind, we do not find any significant local employment effects. In the year after commissioning, GDP increases 23% for an average sized solar park and 12% for an average sized wind project. The impacts only decrease slightly in the following years. We also find significant persistent fiscal revenue impacts in wind compared to only a one-time tax revenue increase in solar at the time of construction. Our results provide different implications for policymakers that want to advocate for renewable energy in their towns. While for solar, the main benefit constitutes a short-term increase in low-skilled employment and public revenues, wind energy provides more long-term financial benefits but less local employment opportunities.

Suggested Citation

  • Scheifele, Fabian & Popp, David, 2025. "Not in my backyard? The local impact of wind and solar parks in Brazil," Energy Economics, Elsevier, vol. 147(C).
    • Handle: RePEc:eee:eneeco:v:147:y:2025:i:c:s0140988325003056
    DOI: 10.1016/j.eneco.2025.108481
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    Keywords

    Employment; Renewables; Local impact; Difference-in-differences;
    All these keywords.

    JEL classification:

    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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