SUMMARY Energy-Based Economic Development

Carley et al. (2011) took a step forward and defined the field of Energy-Based Economic

Development (EBED) as:

Energy-based economic development is a process by which economic developers;

energy policymakers and planners; government officials; industry, utility, and

business leaders; and other stakeholders in a given region strive to increase energy

efficiency or diversify energy resources in ways that contribute to job creation, job

retention, and regional wealth creation.

This field tries to homogenize and put together the separate pieces of research about energy

and economic development. It represents the convergence of the fields of economic

development and energy planning since, according to them, “The link between energy and

economic development in the literature is still theoretical, mostly focused on the need for the

potential benefits of EBED, and rarely applied.”

Energy as seen from this perspective only corresponds to that that is advanced1, efficient2 and

clean3 (Carley et al.). They avoided the term “green” since this does not include advanced

technology of non-renewable sources and it has been used indiscriminately that could be a

source of confusion and divergence rather than convergence.

Note: important to note that EBED is not considering the energy standards that are needed for

living conditions, primary needs and personal economic well-being in this sense the energy

access can be part of the objective but also is the main mean. See e.g (Nissing and von

Blottnitz, 2010, The World Bank, 1996, UNDP, 2007)

The authors stated that the evolution of the fields of economic development and energy

planning have brought closer together the fields with the aimed of global trends of

sustainability, environmental support, wealth creation vs. economic growth. The analysis

emphasizes the effect of government involvement on these practices and explores two

important points for convergence:

1. Another explanation, however, is that framing energy reform on economic development

grounds makes energy policy inherently less partisan and more politically feasible—rarely

do policymakers contend that economic development is an ill-advised objective, but

energy for the sake of climate change mitigation or reduced dependence on foreign

fossil fuels is not as universally accepted.

2. Similar to the economic development discipline, states and localities have emerged as the

laboratories for policy development and implementation in energy policy and planning.

Nevertheless, the convergence offered by this paper seem to be more focused on the process

of energy development for economic development that in the product (energy provision) on 1 Advanced refers to technological innovation in either conventional or alternative sources of energy.

2 Efficiency is the amount of energy input divided by energy output. Greater efficiency means that less

primary energy is required for the same amount of output energy. 3 Clean refers to energy that is low carbon—or, in some cases, no carbon—and also improves the

environmental footprint vis-a`-vis conventional energy sources.

economic development. e.g. it discusses the importance of job creation by the energy project

rather than job creation by the increase of productive activities that the extra supply of energy

will provide4

(Carley et al.) showed how funding to energy development project have increase in recent

years though the economic crises the world supported. This world funding scenario gives a

positive feedback for efforts towards EBED. Additionally, the authors also present some

results from Roberts (1981)5 about the overlap between activities directed to economic

development and to energy planning.

There are four goals of EBED, increase of energy self-sufficiency in national and subnational-

regional levels, energy diversification, economic growth and economic development. And

gives six potential approaches to apply EBED projects: Industry development,

Entrepreneurship development, Research and innovation support, Workforce development

(support of human capital formation), Energy self-sufficiency, and Diversification of energy

resources and access.

Additionally, (Carley et al.) gives a little review of the literature about EBED.

1. Needs for energy-based economic development: Focused on the significance for

sustainable development which implies decarbonization of energy consumption and

energy self-sufficiency plus improving industry retention and job creation.

2. Impacts and benefits of energy-based economic development: Most impacts in literature

corresponds to job creation of energy projects, that can be direct (jobs for the project),

4 One of my critiques

5 The document cannot be obtained through internet, therefore the summary is based on CARLEY, S.,

LAWRENCE, S., BROWN, A., NOURAFSHAN, A. & BENAMI, E. 2011. Energy-based economic development. Renewable & Sustainable Energy Reviews, 15, 282-295.

indirect (around the project) and induced by means of the energy supply increase in a

determined region6.

3. Evaluation methods: Input output method have been used however there is a need of

other type of evaluation since the “definitions for EBED, and EBED-related industries and

activities, are inconsistent, which makes it difficult to aggregate relevant industry and

workforce data for assessment”

4. The need for a comprehensive approach to energy-based economic development: In

order to make more successful experiences on EBED a more holistic approach is needed

(an integrated approach), with input from sustainability topics as from general

development practices. (Carley et al.) explains that based on literature (Udo and Jansson,

GNESD, 2007, GNESD, 2006, Flavin and Hull Aeck, 2005) EBED could have an effect on

sustainability indicators but also depends on them. They also mentioned that EBED

practices are not that far from any other sustainable development practices: “Particularly

with respect to nurturing home-grown industries and attracting investment and relocation

from established firms, the principles often remain the same, as energy businesses

generally share many of the same needs and perspectives as other businesses. Others

describe EBED as simply the injection of greater consideration to energy issues into the

preexisting economic development infrastructure and framework [67]”7

5. Obstacles to success in energy-based economic development: Funding, Coordination of

actors, Allocation of resources.

Finally, (Carley et al.) gives a brief summary of actions to take for the projects and emphasizes

the need of collaboration into this field and specially the pre- and post-evaluation of projects

for assessment of this kind of projects. Most importantly makes a wider contribution of

situation awareness: “In our research we have shown that funding in EBED has outpaced

proven practice and evaluation techniques”. Nevertheless, since this work was recently

published (January 2011), it has not had a wide impact yet.

CARLEY, S., LAWRENCE, S., BROWN, A., NOURAFSHAN, A. & BENAMI, E. 2011. Energy-based economic development. Renewable & Sustainable Energy Reviews, 15, 282-295.

FLAVIN, C. & HULL AECK, M.2005. Energy for development: The potential role of renewable energy in meeting the Millennium Development Goals. Prepared for the RENEWABLE ENERGY POLICY NETWORK REN21. Washington, DC: The Worldwatch Institute.

GNESD.2006. Poverty reduction: Can renewable energy make a real contribution? Summary for policymakers. Roskilde: Global Network on Energy for Sustainable Development.

GNESD.2007. Renewable Energy Techologies and Poverty Alleviation: Overcoming barriers and unlocking potentials. Roskilde: Global Network on Energy for Sustainable Development.

NISSING, C. & VON BLOTTNITZ, H. 2010. Renewable energy for sustainable urban development: Redefining the concept of energisation. Energy Policy, 38, 2179-2187.

ROBERTS, J. S.1981. The energy connection: Incorporating energy concerns in the economic development process [Technical Report]. Prepared for the UNITED STATES ECONOMIC DEVELOPMENT ADMINISTRATION. Alexandria, VA: Resource Planning Collaborative.

6 However, in a country the job effect of an energy project has a limit in the long run as seen in the

history of nations where energy jobs themselves are accountable for non-significant employment increase rates of a country (support these, I saw it somewhere as well my critique) 7 Not important

THE WORLD BANK 1996. Rural energy and development: Improving energy supplies for two billion people, Washington, DC, The World Bank.

UDO, V. E. & JANSSON, P. M. 2009. Bridging the gaps for global sustainable development: A quantitative analysis. Journal of Environmental Management, 90, 3700-3707.

UNDP 2007. Energizing the least develop countries to achieve the Millenium Development Goals: The challenges and opportunities of globalization. Making Globalization Work for the Least Developed Countries. Istanbul: United Nations Development Programme.