Do the Winds that Generate Energy Also Generate Jobs and Income Locally?
$ 38.5
Description
From 2006 to 2019, the National Bank for Economic and Social Development (BNDES) disbursed 38 billion reais for wind energy projects in the Northeast region. The credit subsidy for such investments has been justified on the grounds of creating jobs and generating income for this region, the semi-arid area of which has a socio-economic backdrop that requires regional development policies to be drawn up. Energy independence, reduction of greenhouse gases, and improvement of air quality are contributions that arise from the introduction of this renewable technology into the energy matrix. However, its role as a generator of local employment and income improvement is debatable. Thus, the synthetic control method is applied to municipal data to assess the effect on local employment and income in twenty-one municipalities that were targeted for the receipt of subsidized credit for wind generation. The results did not identify any significant impact on employment or income in the formal market. For example, in the municipality of Parazinho-RN, which received almost 1.5 billion reais in BNDES investments between 2011 and 2016 (equivalent to 60 times its annual GDP), the number of jobs created after the investment was, on average, 7% smaller than in its synthetic group. Overall, the results suggest that despite the contribution of investments to energy and environmental policy, there was no significant contribution to the generation of local employment and income.