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The long-term effect of renewable electricity on employment in the United Kingdom

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  • Arvanitopoulos, T.
  • Agnolucci, P.

Abstract

Assessment of the employment impact of renewable electricity technologies is generally implemented through either complex and data-intensive methods (such as Computable General Equilibrium models) or simplistic approaches, normally focused on specific energy generation technologies, such as employment factors. In contrast, this article proposes a transparent and easily reproducible econometric methodology based on the Vector Error Correction model that uses aggregated and widely available data. The model is applied to the power generation sector in the United Kingdom using annual data from 1990 onwards and provides evidence that the long-term employment impact of renewable technologies is much higher than the impact arising from deploying nuclear or natural gas technologies. The impulse response function analysis indicates that a permanent 1 Gigawatt-hours increase in annual electricity supply generated by renewable technologies creates 3.5 jobs in the long-term period. Finally, this study derives the implications of the findings in the context of decarbonisation scenarios for the power sector in the United Kingdom and assesses the extent to which decarbonisation pathways based on renewable electricity contribute to stimulating employment in the generation sector.

Suggested Citation

  • Arvanitopoulos, T. & Agnolucci, P., 2020. "The long-term effect of renewable electricity on employment in the United Kingdom," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
  • Handle: RePEc:eee:rensus:v:134:y:2020:i:c:s1364032120306109
    DOI: 10.1016/j.rser.2020.110322
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    More about this item

    Keywords

    Employment effect; Electricity supply; Renewable electricity; Cointegration; Impulse responses; Decarbonisation scenarios;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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