The Economic Effects of Expanding Organic Waste-To-Energy Facilities in Korea: An Input-Output Analysis

Impacts of the utilization of fossil fuels, such as global climate change, world energy conflicts, greenhouse gas and energy source shortages, have increasingly threatened world stability. For this reason, organic waste-to-energy (OWtE) has been attracting recognition because it could replace the existing resources. The OWtE means the transformation of organic waste into useful energy. In this paper, we attempts to look into the economic effects of expanding the OWtE facilities by applying an input-output (I-O) analysis using the 2013 I-O table. The OWtE sector is defined as the sectors that directly utilize the energy produced from organic waste. In Korea, this sector includes renewable energy sector, manufactured gas supply sector, and steam and hot water supply sector. To investigate economic effects of expanding OWtE facilities, the author analyzes three parts. First, production-inducing effect, value-added creation effect, and employment-inducing effect are quantified based on demand-driven model. Furthermore forward linkage effects, and backward linkage effects of the OWtE. Second, supply shortage effect is analyzed employed supply-driven model. Last, price pervasive effects are analyzed employed Leontief price model. The results are presented: First, the production or investment of 1.0 won in the OWtE sector induces 1.0801 won production it occurs 0.1741 won added value. Moreover 1 billon won employment-inducing effect of OWtE is estimated 0.8947 people. Second, production shortage costs from 1.0 won supply shortage of OWtE are measured 1.7146 won and are not small. Third, the impact of the 10% increase in OWtE rate on the general price level is estimated to be 0.2276% and is small. Theses information can be utilized in forecasting the economic effect of expanding OWtE facilities.