Framing policy on low emissions vehicles in terms of economic gains: might the most straightforward gain be delivered by supply chain activity to support refuelling?

Alabi Oluwafisayo (), Martin Smith, John Irvine and Karen Turner
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Alabi Oluwafisayo: International Public Policy Institute, University of Strathclyde
Martin Smith: St Andrews Centre for Advanced Materials, University of St Andrews
John Irvine: Barelett School of Environment, University College London

No 1801, Working Papers from University of Strathclyde Business School, Department of Economics

Abstract: A core theme of the UK Government’s new Industrial Strategy is exploiting opportunities for domestic supply chain development. This extends to a special ‘Automotive Sector Deal’ that focuses on the shift to low emissions vehicles (LEVs). Here attention is on electric vehicle and battery production and innovation. In this paper, we argue that a more straightforward gain in terms of framing policy around potential economic benefits may be made through supply chain activity to support refuelling of battery/hydrogen vehicles. We set this in the context of LEV refuelling supply chains potentially replicating the strength of domestic upstream linkages observed in the UK electricity and/or gas industries. We use input-output multiplier analysis to deconstruct and assess the structure of these supply chains relative to that of more import-intensive petrol and diesel supply. A crucial multiplier result is that for every £1million of spending on electricity (or gas), 8 full-time equivalent jobs are supported throughout the UK. This compares to less than 3 in the case of petrol/diesel supply. Moreover, the importance of service industries becomes apparent, with 67% of indirect and induced supply chain employment to support electricity generation being located in services industries. The comparable figure for GDP is 42%.

Keywords: electric vehicles; input-output model; multipliers; value-added multiplier; employment multiplier; supply chain development (search for similar items in EconPapers)
JEL-codes: C67 Q42 Q43 Q48 R48 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2018-01
New Economics Papers: this item is included in nep-ene, nep-eur, nep-reg, nep-tid and nep-tre
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Citations: View citations in EconPapers (4)

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Journal Article: Framing policy on low emissions vehicles in terms of economic gains: Might the most straightforward gain be delivered by supply chain activity to support refuelling? (2018)
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