A new study by Trinomics, in collaboration with DTU Wind, shows that strategically earmarking EU funding for wind innovation and industrial scale-up delivers major economic and security benefits for Europe. By 2040, each €1 of public funding for wind generates €7 in annual economic returns, while significantly boosting the EU’s jobs, exports, and energy security. […]
This is totally crappy and unsound economics.
Is it? Seems pretty reasonable. If you includes the reduction in costs for health and safety because of fossil fuels it should give you a lot of net plus.
The reductions in health can’t be predicted as a ratio on wind only, they depend on the overall switch to renewables, and what source is being offset to wind.
Plus the numbers given are all completely off, they are just adding everything they can together without regards to tradeoffs (e.g. 1W of wind electricity is offset by 1W of non wind electricity so the added value is only the cost of imported gas or uranium or whatever, the jobs are not added but reassigned, the export value provided is wishful thinking…).
Wind and solar with storage are a very good idea, I’m all for it. But these numbers are just corpo bullshit.
Rule of thumb: direct investments from government have a multiplier ratio roughly between 1 & 5 depending on the economic situation. 5 is extreme, applicable only in big recession with money being spent directly towards the poorest.
Except, if I’m not mistaken, wind also doesn’t need much labor, meaning there’s actually a proportional amount of labor is available to be used elsewhere in the economy, so in effect you’re getting (more or less) free energy and free labor. And don’t forget the economic value of not being tied to political upheavals in the Middle East or Russian war crimes in Ukraine and the lower bar for economic undertakings due to cheaper energy a la Jevon’s paradox. Now I don’t know enough about economics to coneifm or deny the €7 number, but you’re underselling the impact here.
Freeing the manpower offsets production to other areas. A net gain for the countries, but the workers will still generate a similar amount of value from an economic standpoint. The gain is already taken into account into production prices, which themselves already include the countries productivity. On the scale of the union and all that is produced, the productivity increase from wind will be very very small.
The rest is a great political gain, but won’t impact macroeconomics much, as energy markets are worldwide. Even the positive impact on the trade balance won’t change the numbers much (even as they change greatly the financial stability of EU).
So it is a very real gain, and if you get all these arguments together it is pretty obvious, just the purely economic result when looking at the economy as a whole is way more subtle that “hey, free money”. It’s really just reallocation. (Macro and micro economics are really two different beasts).
Unsure,what is crappy or unsound corpo bullshit because the economic models used by EU to allocate resources and to drive fiscal decisions are even less complex than those proposed by the scientific community, because they ignore climate change.
EU Commisions economic models currently assume that every Euro of investment generates just 0.6 Euro of economic activity. Renewable energy projects are the only investments with coefficients above 1. Source
So .6 generated make a multiplier of 1.6 for the economy. (1 initial + .6 generated). Which is pretty much the norm in a standard economy.
And your source which is reliable (links to proper studies) gives a multiplier of 2.6 which is totally off from the multiplier of 7 mentioned in OP link.
Edit: thank for your link, I’d have ballparked 2 rather than 2.6.
.6 is a multiplier. It’s a loss of 40 cent per Euro.
There are numerous studies assessing the return on investment, but I wouldn’t say that some are more correct. They are working with different assumptions regarding the environmental costs, which can lead to huge differences in the cofficient estimates. Currently, the goal is to convince EU commission to include the environmental costs in their economic models. The precise math isn’t that important, it’s the step towards better models that matters. The study by Trinomics is part of this effort and shouldnt be discarded, even though it comes from industry and though it claims large multipliers.
1.2-1.7, for Europe based on observation (IMF), which consistent with theory.
0.6ow values are when you give money to people who hoard it (e.g. tax cuts).
Just means that the EU uses a shit factor for deciding policies based on money going mostly to tax cuts or something else with policymaking.
I disagree, giving the public wrong estimates of what is going on is too much of a sports for the media .
To be fair, the headline is super weird, I read the report and can’t find where they pulled that number from. The report says “wind fund good, with wind fund 2040, without wind fund 2040” stuff but never mentions how big it is.
But also it sounds plausible that a 1m subsidy could make or break 7m project.