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The dynamic approach of modelling regional recovery investment policies using environmentally-extended SAM Matrix

Author

Listed:
  • Darlington Agbonifi

    (Department of Economics (University of Verona))

Abstract

This paper analyzes the socioeconomic and environmental dynamic impacts of an exogenous public-financed increases in infrastructure investments and modernization projects (CIS) of around EUR 1097 billion for the 2021-2026 period on industrial outputs, household employment and income distribution, in the Italian province of Taranto using an environmentally extended Social Accounting Matrix (ESAM) techniques for the year 2015. This method reconciles the analysis of the impact of an investment policy aiming at climate neutrality on a local economy. As well as an in-depth evaluation of the intersectoral production linkages through trade and multiplier analysis, with the cost-benefit (CB) analysis of a large-scale investment project. The evaluation of the dynamic impacts on the local economy produces a benefit/cost ratio of 5.63 that increases to 7.88 when the CB analysis of the project, and therefore the revenues generated during the operational period, are also included. The inclusion of environmental externalities associated with industrial greenhouse gas (GHGs) emissions reduces by about 16% the benefit/cost ratio in the construction period. In the operational period, when we assume that green production technologies are adopted, the reduction of the ratio is more consistent. The distributional impact of the investments on the annual income of households is also acceptably equitable.

Suggested Citation

  • Darlington Agbonifi, 2023. "The dynamic approach of modelling regional recovery investment policies using environmentally-extended SAM Matrix," Working Papers 04/2023, University of Verona, Department of Economics.
    • Handle: RePEc:ver:wpaper:04/2023
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    References listed on IDEAS

    as
    1. Breisinger, Clemens & Thomas, Marcelle & Thurlow, James, 2009. "Social accounting matrices and multiplier analysis: An introduction with exercises," Food security in practice technical guide series 5, International Food Policy Research Institute (IFPRI).
    2. Pasquini, Alessandra & Rosati, Furio C., 2020. "A Human Capital Index for the Italian Provinces," IZA Discussion Papers 13301, Institute of Labor Economics (IZA).
    3. Morilla, Carmen Rodriguez & Diaz-Salazar, Gaspar Llanes & Cardenete, M. Alejandro, 2007. "Economic and environmental efficiency using a social accounting matrix," Ecological Economics, Elsevier, vol. 60(4), pages 774-786, February.
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    More about this item

    Keywords

    Policy Impact Evaluation; Cost Benefit Analysis; Local Economic Development; SAM;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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