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The Importance of Revenue Sharing for the Local Economic Impacts of a Renewable Energy Project: A Social Accounting Matrix Approach

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  • Grant Allan
  • Peter Mcgregor
  • Kim Swales

Abstract

Allan G., McGregor P. and Swales K. The importance of revenue sharing for the local economic impacts of a renewable energy project: a social accounting matrix approach, Regional Studies . Ambitious renewable energy targets are requiring investments in new renewable capacity in areas where acceptance could be affected by the potential economic benefits to the locality. At the same time, new renewable energy projects, primarily for onshore wind capacity, might offer a route by which peripheral economic development policies can be supported. The economic impacts of these projects are difficult to quantify using input--output techniques, but can be more appropriately handled within a social accounting matrix (SAM) framework. A social accounting matrix for the Shetland Islands, off the north coast of mainland Scotland, is used to evaluate the potential local economic and employment impacts of a large proposed onshore wind energy project. Sensitivity analysis reveals the relative importance of the level of ‘community benefit’ payments, ‘local sourcing’ of intermediate inputs and the level of community ownership of the project to the size of these impacts. In the Shetland case, by a substantial margin, local ownership confers the greatest economic impacts for the local community. Allan G., McGregor P. y Swales K. La importancia de compartir ingresos en un proyecto de energ�a renovable para los efectos económicos locales: el m�todo de matriz de contabilidad social, Regional Studies . Para lograr objetivos ambiciosos en el campo de la energ�a renovable es necesario invertir en nuevas capacidades de energ�a renovable en áreas donde la aceptación podr�a verse afectada por los posibles beneficios económicos en la localidad. As� mismo, los nuevos proyectos de energ�a renovable, sobre todo para la capacidad eólica terrestre, podr�an ofrecer una v�a para apoyar las pol�ticas de desarrollo económico perif�rico. Los efectos económicos de estos proyectos son dif�ciles de cuantificar si se usan t�cnicas de aportes y resultados (input--output). No obstante, una matriz de contabilidad social (MCS) podr�a ser un m�todo más apropiado. Con ayuda de una matriz de contabilidad social para las islas Shetland, en la costa norte de Escocia continental, evaluamos las posibles repercusiones locales en la econom�a y el empleo de un importante proyecto propuesto para la energ�a eólica terrestre. El análisis de sensibilidad muestra la importancia relativa del nivel de pagos que benefician a la comunidad, el suministro local de aportaciones intermedias y el nivel de propiedad comunitaria del proyecto para el tamaño de estos efectos. En el caso de las islas Shetland, la propiedad local aporta con un margen considerable los efectos económicos más importantes para la comunidad local. Energie renouvelable Effets �conomiques ruraux Partage des revenus Propri�t� locale Allan G., McGregor P. et Swales K. L'importance du partage des revenus pour ce qui est des retomb�es �conomiques locales d'un programme d'�nergie renouvelable: une approche matricielle de la comptabilit� nationale, Regional Studies . Des cibles d'�nergie renouvelable ambitieuses exigent de l'investissement dans une nouvelle capacit� renouvelable dans des zones où l'agr�ment pourrait être touch� par les b�n�fices �conomiques potentielles de la r�gion. En même temps, les nouveaux programmes d'�nergie renouvelable, essentiellement en faveur du d�veloppement à terre de l'�nergie �olienne, pourrait constituer un moyen de soutenir des politiques de d�veloppement �conomique annexes. Employant des techniques portant sur les �changes interindustriels, il s'avère difficile d'�valuer avec pr�cision les retomb�es �conomiques de ces programmes, mais on peut mieux le faire à partir d'un cadre matriciel de la comptabilit� nationale. On emploie une matrice de la comptabilit� nationale pour les îles Shetland, situ�es au large de la côte septentrionale de l'Ecosse continentale, afin d'�valuer les effets locaux potentiels pour l'�conomie et l'emploi d'un important programme envisag� d'�nergie renouvelable à terre. Une analyse de sensibilit� laisse voir l'importance relative du niveau du ‘rendement à la communaut�’, de ‘l'approvisionnement local’ des inputs interm�d�aires, et du niveau de la propri�t� communautaire du programme par rapport à l'importance relative de ces effets. Pour ce qui est de l'�tude de cas des îles Shetland, la propri�t� locale entraîne de loin les effets �conomiques les plus importants pour la communaut� locale. Erneuerbare Energie Wirtschaftliche Auswirkung in ländlichen Gebieten Geteilte Einnahmen Beteiligung der Öffentlichkeit Allan G., McGregor P. und Swales K. Die Bedeutung von geteilten Einnahmen für die Auswirkungen eines Projekts für erneuerbare Energien auf die lokale Wirtschaft: ein Social-Accounting-Matrix-Ansatz, Regional Studies . Für ehrgeizige Ziele bei erneuerbaren Energien werden Investitionen in neue Kapazitäten für diese Energien in Gebieten benötigt, wo die Akzeptanz vom potenziellen wirtschaftlichen Nutzen für den Ort beeinflusst werden könnte. Gleichzeitig bieten neue Projekte für erneuerbare Energien -- insbesondere im Bereich der Onshore-Windenergie -- eine Möglichkeit zur Unterstützung von Maßnahmen zur Wirtschaftsentwicklung in Randgebieten. Die wirtschaftlichen Auswirkungen dieser Projekte lassen sich mit Input--Output-Techniken nur schwer quantifizieren; eine angemessenere Methode liegt im Rahmen einer Social Accounting Matrix (SAM). Anhand einer Social Accounting Matrix für die Shetland-Inseln vor der Nordküste Schottlands werden die potenziellen Auswirkungen eines geplanten Onshore-Windenergie-Großprojekts auf die lokale Wirtschaft und Beschäftigung untersucht. Durch eine Empfindlichkeitsanalyse wird die relative Bedeutung der Höhe der Zahlungen für den ‘Gemeinschaftsnutzen’, der ‘lokalen Beschaffung’ von intermediären Inputs und des Ausmaßes der Beteiligung der Gesellschaft am Projekt für den Umfang dieser Auswirkungen ermittelt. Im Fall der Shetland-Inseln führt lokales Eigentum zu den deutlich größten wirtschaftlichen Auswirkungen für die Gesellschaft vor Ort. Energ�a renovable Repercusiones económicas rurales Ingresos compartidos Propiedad comunitaria

Suggested Citation

  • Grant Allan & Peter Mcgregor & Kim Swales, 2011. "The Importance of Revenue Sharing for the Local Economic Impacts of a Renewable Energy Project: A Social Accounting Matrix Approach," Regional Studies, Taylor & Francis Journals, vol. 45(9), pages 1171-1186, March.
  • Handle: RePEc:taf:regstd:v:45:y:2011:i:9:p:1171-1186
    DOI: 10.1080/00343404.2010.497132
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    1. Nguyen Huu Hau & Tran Trung Tinh & Hoa Anh Tuong & Wing-Keung Wong, 2020. "Review of Matrix Theory with Applications in Education and Decision Sciences," Advances in Decision Sciences, Asia University, Taiwan, vol. 24(1), pages 28-69, March.
    2. Reilly, Kieran & O’Hagan, Anne Marie & Dalton, Gordon, 2016. "Developing benefit schemes and financial compensation measures for fishermen impacted by marine renewable energy projects," Energy Policy, Elsevier, vol. 97(C), pages 161-170.
    3. Panagiotis Liargovas & Nikolaos Apostolopoulos, 2016. "Investment scenarios and regional factors in the solar energy sector," Economics and Business Letters, Oviedo University Press, vol. 5(3), pages 95-104.
    4. Grant Allan & Peter Mcgregor & Kim Swales, 2011. "The Importance of Revenue Sharing for the Local Economic Impacts of a Renewable Energy Project: A Social Accounting Matrix Approach," Regional Studies, Taylor & Francis Journals, vol. 45(9), pages 1171-1186, March.
    5. Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Welsh Economy: Homogeneity or Heterogeneity?," Working Papers 1027, University of Strathclyde Business School, Department of Economics.
    6. Hermannsson, Kristinn & Lisenkova, Katerina & McGregor, Peter G & Swales, J Kim, 2010. "The Expenditure Impacts of London-based Individual Higher Education Institutions (HEIs) and their Students on the Economy of England: Homogeneity or Heterogeneity?," SIRE Discussion Papers 2010-106, Scottish Institute for Research in Economics (SIRE).
    7. Angel Barajas & Santiago Lago-Peñas & Patricio Sanchez, 2014. "On the Regional Economic Effects of the Pope's Journeys: Evidence from the Visit to Santiago de Compostela in 2010," Tourism Economics, , vol. 20(2), pages 279-299, April.
    8. Hernandez-Perdomo, Elvis A. & Mun, Johnathan & Rocco S., Claudio M., 2017. "Active management in state-owned energy companies: Integrating a real options approach into multicriteria analysis to make companies sustainable," Applied Energy, Elsevier, vol. 195(C), pages 487-502.
    9. Nils May & Øivind A. Nilsen, 2019. "The Local Economic Impact of Wind Power Deployment," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 75(1), pages 56-92.
    10. Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2011. "The Expendi ture Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Northern Irish Economy: Homogeneity or Heterogeneity?," Working Papers 1103, University of Strathclyde Business School, Department of Economics.
    11. Brown, Jason P. & Pender, John & Wiser, Ryan & Lantz, Eric & Hoen, Ben, 2012. "Ex post analysis of economic impacts from wind power development in U.S. counties," Energy Economics, Elsevier, vol. 34(6), pages 1743-1754.
    12. Thapar, Sapan & Sharma, Seema & Verma, Ashu, 2017. "Local community as shareholders in clean energy projects: Innovative strategy for accelerating renewable energy deployment in India," Renewable Energy, Elsevier, vol. 101(C), pages 873-885.
    13. Slee, Bill, 2015. "Is there a case for community-based equity participation in Scottish on-shore wind energy production? Gaps in evidence and research needs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 540-549.
    14. Philip B. Whyman, 2018. "The local economic impact of shale gas extraction," Regional Studies, Taylor & Francis Journals, vol. 52(2), pages 184-196, February.
    15. Dalton, Gordon & Allan, Grant & Beaumont, Nicola & Georgakaki, Aliki & Hacking, Nick & Hooper, Tara & Kerr, Sandy & O’Hagan, Anne Marie & Reilly, Kieran & Ricci, Pierpaolo & Sheng, Wanan & Stallard, T, 2015. "Economic and socio-economic assessment methods for ocean renewable energy: Public and private perspectives," Renewable and Sustainable Energy Reviews, Elsevier, vol. 45(C), pages 850-878.
    16. Dombi, Mihály & Kuti, István & Balogh, Péter, 2014. "Sustainability assessment of renewable power and heat generation technologies," Energy Policy, Elsevier, vol. 67(C), pages 264-271.
    17. Kristinn Hermannsson & Katerina Lisenkova & Peter McGregor & Kim Swales, 2010. "The Expenditure Impacts of Individual Higher Education Institutions (HEIs) and their Students on the Scottish Economy under Devolution: Homogeneity or Heterogeneity?," Working Papers 1016, University of Strathclyde Business School, Department of Economics.
    18. Euan Phimister & Deborah Roberts, 2012. "The Role of Ownership in Determining the Rural Economic Benefits of On-shore Wind Farms," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(2), pages 331-360, June.
    19. Berka, Anna L. & Creamer, Emily, 2018. "Taking stock of the local impacts of community owned renewable energy: A review and research agenda," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3400-3419.
    20. Allan, Grant & Eromenko, Igor & Gilmartin, Michelle & Kockar, Ivana & McGregor, Peter, 2015. "The economics of distributed energy generation: A literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 42(C), pages 543-556.
    21. Wenche Tobiasson & Tooraj Jamasb, 2014. "Sustainable Electricity Grid Development and the Public: An Economic Approach," Working Papers EPRG 1411, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    22. Reynolds, Joanna & Egan, Matt & Renedo, Alicia & Petticrew, Mark, 2015. "Conceptualising the ‘community’ as a recipient of money – A critical literature review, and implications for health and inequalities," Social Science & Medicine, Elsevier, vol. 143(C), pages 88-97.
    23. Niall Farrell & Cathal O'Donoghue & Karyn Morrissey, 2020. "Regional income and wave energy deployment in Ireland," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 509-531, June.
    24. Allan, Grant & Comerford, David & Connolly, Kevin & McGregor, Peter & Ross, Andrew G., 2020. "The economic and environmental impacts of UK offshore wind development: The importance of local content," Energy, Elsevier, vol. 199(C).

    More about this item

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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