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Employment Impacts of EU Biofuels Policy: Combining Bottom-up Technology Information and Sectoral Market Simulations in an Input-output Framework

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  • Mongelli, Ignazio
  • Löschel, Andreas
  • Neuwahl, Frederik
  • Delgado, Luis

Abstract

This paper analyses the employment consequences of policies aimed to support biofuels in the European Union. The promotion of biofuel use has been advocated as a means to promote the sustainable use of natural resources and to reduce greenhouse gas emissions originating from transport activities on the one hand, and to reduce dependence on imported oil and thereby increase security of the European energy supply on the other hand. The employment impacts of increasing biofuels shares are calculated by taking into account a set of elements comprising the demand for capital goods required to produce biofuels, the additional demand for agricultural feedstock, higher fuel prices or reduced household budget in the case of price subsidisation, price effects ensuing from a hypothetical world oil price reduction linked to substitution in the EU market, and price impacts on agro-food commodities. The calculations refer to scenarios for the year 2020 targets as set out by the recent Renewable Energy Roadmap. Employment effects are assessed in an input-output framework taking into account bottom-up technology information to specify biofuels activities and linked to partial equilibrium models for the agricultural and energy sectors. The simulations suggest that biofuels targets on the order of 10-15% could be achieved without adverse net employment effects.

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  • Mongelli, Ignazio & Löschel, Andreas & Neuwahl, Frederik & Delgado, Luis, 2008. "Employment Impacts of EU Biofuels Policy: Combining Bottom-up Technology Information and Sectoral Market Simulations in an Input-output Framework," ZEW Discussion Papers 08-049, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  • Handle: RePEc:zbw:zewdip:7359
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    1. Markandya, Anil & Arto, Iñaki & González-Eguino, Mikel & Román, Maria V., 2016. "Towards a green energy economy? Tracking the employment effects of low-carbon technologies in the European Union," Applied Energy, Elsevier, vol. 179(C), pages 1342-1350.
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    3. Herreras Martínez, Sara & van Eijck, Janske & Pereira da Cunha, Marcelo & Guilhoto, Joaquim J.M. & Walter, Arnaldo & Faaij, Andre, 2013. "Analysis of socio-economic impacts of sustainable sugarcane–ethanol production by means of inter-regional Input–Output analysis: Demonstrated for Northeast Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 28(C), pages 290-316.
    4. Többen, Johannes, 2017. "Regional Net Impacts and Social Distribution Effects of Promoting Renewable Energies in Germany," Ecological Economics, Elsevier, vol. 135(C), pages 195-208.
    5. Tsita, Katerina G. & Pilavachi, Petros A., 2013. "Evaluation of next generation biomass derived fuels for the transport sector," Energy Policy, Elsevier, vol. 62(C), pages 443-455.
    6. Simas, Moana & Pacca, Sergio, 2014. "Assessing employment in renewable energy technologies: A case study for wind power in Brazil," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 83-90.
    7. Chang, Young-Tae & Shin, Sung-Ho & Lee, Paul Tae-Woo, 2014. "Economic impact of port sectors on South African economy: An input–output analysis," Transport Policy, Elsevier, vol. 35(C), pages 333-340.
    8. Lindberg, Gunnar, 2011. "Linkages: economic analysis of agriculture in the wider economy," Department of Economics publications 2432, Swedish University of Agricultural Sciences, Department of Economics.
    9. repec:spr:envpol:v:19:y:2017:i:3:d:10.1007_s10018-016-0158-1 is not listed on IDEAS
    10. G. Lindberg & P. Midmore & Y. Surry, 2012. "Agriculture’s Inter-industry Linkages, Aggregation Bias and Rural Policy Reforms," Journal of Agricultural Economics, Wiley Blackwell, vol. 63(3), pages 552-575, September.
    11. repec:eee:ecolec:v:147:y:2018:i:c:p:230-242 is not listed on IDEAS
    12. Tsita, Katerina G. & Pilavachi, Petros A., 2012. "Evaluation of alternative fuels for the Greek road transport sector using the analytic hierarchy process," Energy Policy, Elsevier, vol. 48(C), pages 677-686.
    13. Sievers, Luisa & Schaffer, Axel, 2016. "The impacts of the German biofuel quota on sectoral domestic production and imports of the German economy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 63(C), pages 497-505.
    14. Rao, Narasimha D., 2013. "Distributional impacts of climate change mitigation in Indian electricity: The influence of governance," Energy Policy, Elsevier, vol. 61(C), pages 1344-1356.
    15. Santamaría, Marta & Azqueta, Diego, 2015. "Promoting biofuels use in Spain: A cost-benefit analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1415-1424.
    16. repec:eee:appene:v:210:y:2018:i:c:p:256-267 is not listed on IDEAS
    17. Choumert Nkolo, Johanna & Combes Motel, Pascale & Guegang Djimeli, Charlain, 2018. "Income-generating Effects of Biofuel Policies: A Meta-analysis of the CGE Literature," Ecological Economics, Elsevier, vol. 147(C), pages 230-242.
    18. repec:eee:rensus:v:82:y:2018:i:p3:p:2834-2842 is not listed on IDEAS
    19. Monica Padella & Adele Finco & Wallace E. Tyner, 2012. "Impacts of Biofuels Policies in the EU," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 3).
    20. García, Carlos A. & Manzini, Fabio & Islas, Jorge M., 2017. "Sustainability assessment of ethanol production from two crops in Mexico," Renewable and Sustainable Energy Reviews, Elsevier, vol. 72(C), pages 1199-1207.
    21. Wang, Can & Zhang, Weishi & Cai, Wenjia & Xie, Xi, 2013. "Employment impacts of CDM projects in China's power sector," Energy Policy, Elsevier, vol. 59(C), pages 481-491.
    22. Paredes-Sánchez, José P. & García-Elcoro, Víctor E. & Rosillo-Calle, Frank & Xiberta-Bernat, Jorge, 2016. "Assessment of forest bioenergy potential in a coal-producing area in Asturias (Spain) and recommendations for setting up a Biomass Logistic Centre (BLC)," Applied Energy, Elsevier, vol. 171(C), pages 133-141.
    23. 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.

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    Keywords

    Biofuels; Input-output; Employment;

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