Abstract
In 2002, the province of Ontario introduced plans to ban coal in thermoelectric power production. Rural communities with a high proportion of power plant jobs (such as Atikokan, Ontario, Canada) grappled with three potential outcomes of the planned changes. These include the following: (i) the coal ban is overturned and power plants continue to burn non-renewable coal, (ii) the coal ban takes effect and power plants are closed, and (iii) the coal ban takes effect but power plants continue operating with alternative renewable fuel sources such as woody biomass. Considering there is a lack of readily available economic assessment tools for Ontario communities, the objective of this study is to model how direct changes in employment at the power plant (and indirect employment at associated local industries) impact the spending patterns of households associated with the power plant. To address the objective, an induced economic impact assessment model was developed by integrating quantitative publically available data sources with community-level qualitative data sources incorporating them into an input-output approach. Baseline values were established, representing induced community expenditure under the coal scenario. Values were then adjusted to represent induced community expenditure under shutdown and biomass scenarios. The model suggests that the continuation of coal would allow for $82.7M in household spending, the shutdown reduces overall household spending to $72.1M which represents a decrease of 12.8 %, and the conversion to woody biomass as the sole fuel for the power plant increases household spending relative to the coal by $1.2M or 1.4 %. The results also indicate that the induced economic impact would be realized throughout the region, beyond Atikokan. These results suggest that biomass conversion could produce a net positive-induced economic effect as household spending increases, provided local biomass fuel supply is available. Since a conversion to biomass from coal at this scale is a North American first, other jurisdictions may gain insight from this study as they consider reducing their environmental footprint. Furthermore, the induced economic impact model method which is presented here could easily be adapted and used for other Ontario communities which lack access to established input-output models.
Highlights
In 2002, the province of Ontario introduced plans to ban coal in thermoelectric power production
The model indicates that the town of Atikokan would experience induced economic impacts as households were gained or lost in the income quintiles under the three scenarios
This study examined the induced economic impact of three competing outcome scenarios for a small town economy, in response to a provincial-level policy change related to the use of renewable energy
Summary
In 2002, the province of Ontario introduced plans to ban coal in thermoelectric power production. Rural communities with a high proportion of power plant jobs (such as Atikokan, Ontario, Canada) grappled with three potential outcomes of the planned changes. These include the following: (i) the coal ban is overturned and power plants continue to burn non-renewable coal, (ii) the coal ban takes effect and power plants are closed, and (iii) the coal ban takes effect but power plants continue operating with alternative renewable fuel sources such as woody biomass. Close proximity to other larger centers can entice community members to shop outside of their own community (known as out-shopping), reducing community resilience as the positive local economic impacts are lost [8,9,10,11,12]. Out-shopping can be framed in terms of a local trade area, which can be defined as “a geographic area from which a community generates the majority of its customers” [13]
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