Sara Lawrence

Economic Development and Energy: From Fad to a Sustainable Discipline?

Energy-based economic development (EBED) can provide economic, social, and environmental benefits, such as job creation, industry development, and alternative energy deployment. The United States has recently devoted substantial financial support to EBED efforts. Although early assessments of these efforts are promising, the discipline is at risk of becoming compromised or discredited. It lacks a basic framework, common definitions, and clear goals, which is problematic for a field that requires cross-disciplinary coordination and collaboration. Most EBED evaluation efforts take place before a project is underway; without enough postproject analyses, practitioners are left with unreliable impact estimates. Finally, like early-stage energy technologies themselves, EBED relies heavily on potentially unpredictable or inconsistent funding. These factors render many practitioners ill-equipped to effectively plan, implement, and evaluate specific EBED initiatives. This study offers a working definition, typical goals, and categories of approach with the aim to mitigate difficulties in communication and understanding across disciplines.

National Case Studies

National EBED initiatives are much larger in scale in terms of funding and intended reach than the subnational efforts described in the previous chapter. Many of these top-down strategies are driven by economic motivations such as the reduction of energy costs for a country; improved energy access; or enhanced growth in a low-emissions, efficient, and advanced energy sector. Most of these programs are driven by national governments in contrast to some of the entrepreneurial-driven programs at the subnational level. This chapter presents cases from Singapore, China, Ethiopia, Laos, Morocco, and South Africa.

Evaluation and Metrics

With the increased prevalence of EBED-related initiatives, evaluators are increasingly attracted to this topic area, and the number of evaluations in this domain will likely increase. Evaluations offer information that generates a shared understanding of what works well and what does not in areas of practice. In particular, a collection of quality evaluations in this domain will facilitate a stronger community of research and practice in EBED. To help guide evaluations, this chapter provides a review of the state of EBED evaluations in the peer-reviewed literature and suggests how a stronger understanding of the holistic nature of EBED can strengthen evaluations in the future. The discussion in this chapter focuses on outcome measures, type of initiatives studied, methodological approaches, and timing and research design. This chapter also offers suggestions for evaluators to consider employing as the field advances.

Common Themes and Conclusions

This concluding chapter explores important themes that emerged from the case studies and provides insights about the context in which EBED is implemented around the world. Some themes are more obvious, such as that EBED efforts tend to require multidimensional and comprehensive approaches, but others are more nuanced, such as that timing of EBED projects is crucial and often difficult. We also observe that EBED efforts may be met by unintended consequences when the benefits and burdens from energy development are distributed in unexpected ways and that community participation is important, especially for place-based approaches.

A Hybrid Model: The American Recovery and Reinvestment Act

The U.S. American Recovery and Reinvestment Act (ARRA) of 2009 offers an example of a hybrid model of EBED in which the federal government pursued both a “top-down” strategy and a “bottom-up” strategy by allocating funds to local and state entities to implement EBED programs. This chapter conducts a more in-depth review of this case, describing energy-related ARRA investments and the degree to which these investments targeted the EBED nexus. ARRA’s programs, funding distributions, and the manner in which EBED initiatives were supported are explained in detail. Although the Recovery Act is too new to generate studies that evaluate the effectiveness of the various programs supported under the Act, this chapter does review the early outcomes and challenges, as accounted for in the literature to date, and extends them to the discussion of EBED initiatives at large.

Subnational EBED Cases

Local or subnational EBED projects exemplify how programs and projects are organized to meet EBED goals by regional, state, or local governments; nonprofits; entrepreneurs; and communities. Local approaches are important because they can be initiated at a lower overall cost than national approaches, and they can be shaped to meet the specific needs of a community or region within a country. Further, when national governments are confined or restricted within their EBED strategy or agenda, subnational regions and localities can often break through those barriers and be laboratories of innovation for EBED. Subnational cases presented in this chapter are initiatives set in Sao Paulo, Brazil; Oregon, United States; Copenhagen, Denmark; rural villages in Cambodia; southwestern Pennsylvania, United States; and villages in Rwanda.

Case Study Approach

In this chapter, the discussion shifts from EBED’s foundations, definition, process, policies, and evaluations toward a practice-based setting to offer the reader a more detailed account of EBED through examples. Chapter 6 sets the stage for the case studies described in the following three chapters. This chapter reviews the criteria used to select the case studies and presents the range of case locations, approaches, energy types, economic development strategies, and policies.

Defining Energy-Based Economic Development

EBED is a direct extension of the energy planning and economic development disciplines. This chapter provides important foundational information to support the EBED framework and applications described in the remainder of the book. It defines EBED, describes the economic development and energy policy and planning disciplines, summarizes how these disciplines have converged, and discusses the goals inherent within EBED initiatives. This chapter also differentiates EBED from other disciplines. Distinguishing characteristics include EBED’s focus on advanced, efficient, or low-emissions energy; its pursuit of joint energy and economic development goals; ability to build on the varying scale and distributed nature of some types of low-emissions energy; its alignment of development and energy goals into one unified approach; and the active role of governance, leadership, and stakeholder engagement.

Supportive Policies for Energy-Based Economic Development

EBED efforts are often implemented in conjunction with supportive policies and a conducive policy environment. Policies discussed in this chapter either enable and accelerate EBED activities, reduce the negative externalities associated with energy development, or strike some combination thereof. This chapter presents seven categories of policies that have the potential to advance EBED initiatives: technology innovation policies, technology adoption and commercialization policies, entrepreneurship policies, industrial growth policies, workforce development policies, climate and environment policies, and planning policies. Each of these policy categories is associated with a set of specific tools and techniques, as described in this chapter.

Process and Approaches

Chapter 3 presents the EBED process of an EBED initiative and is intended to help guide policymakers and practitioners in designing and implementing EBED initiatives. The first three steps—stakeholder engagement; goal identification; and asset, needs, and gaps identification—are essential for ensuring the framework is used effectively. The remaining steps are selection of an approach, development of metrics, implementation, and monitoring and evaluation. Each step is described in detail and provides information for EBED stakeholders to tailor an approach so that it is most conducive to local needs, assets, and circumstances. This chapter concludes with a description of three fundamental factors that shape the design of an EBED project: the point of intervention, geographic scale, and the degree of transformation that the project requires relative to the status quo.