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

As demand for electricity from renewable energy sources grows, there is increasing interest, and public and financial support, for local communities to become involved in the development of renewable energy projects. In the UK, “Community Benefit” payments are the most common financial link between renewable energy projects and local communities. These are “goodwill” payments from the project developer for the community to spend as it wishes. However, if an ownership stake in the renewable energy project were possible, receipts to the local community would potentially be considerably higher. The local economic impacts of these receipts are difficult to quantify using traditional Input-Output techniques, but can be more appropriately handled within a Social Accounting Matrix (SAM) framework where income flows between agents can be traced in detail. We use a SAM for the Shetland Islands to evaluate the potential local economic and employment impact of a large onshore wind energy project proposed for the Islands. Sensitivity analysis is used to show how the local impact varies with: the level of Community Benefit payments; the portion of intermediate inputs being sourced from within the local economy; and the level of any local community ownership of the project. By a substantial margin, local ownership confers the greatest economic impacts for the local community.

Volatility of Housing

The aim of the project is to develop a theoretical framework where homelessness arises due to various economic and social factors that vary over time. The ultimate goal is i) to understand whether homelessness spells, entrances and exits could be predicted and if so what information is necessary; and ii) to design and evaluate a homelessness prevention programme in a changing and uncertain environment. Examples of the questions we want to answer are: Should it be made easier for people to borrow money so that they can get out of homelessness, or will such borrowing allow people to over-consume today and so fall into homelessness tomorrow? Should precautionary savings be encouraged so that people have cushions to withstand future shocks, or will savings just delay entry into homelessness? What interventions will affect the probability of becoming homeless and how will they affect behaviour? How will interventions affect incentives to save and to consume before homelessness prevention programmes kick in?