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A METHODOLOGY TO EVALUATE EMPLOYMENT DIRECT AND INDIRECT IMPACTS OF ELECTRIC CAR PRODUCTION APPLIED TO THE BRAZILIAN CASE.

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Presentation on theme: "A METHODOLOGY TO EVALUATE EMPLOYMENT DIRECT AND INDIRECT IMPACTS OF ELECTRIC CAR PRODUCTION APPLIED TO THE BRAZILIAN CASE."— Presentation transcript:

1 A METHODOLOGY TO EVALUATE EMPLOYMENT DIRECT AND INDIRECT IMPACTS OF ELECTRIC CAR PRODUCTION APPLIED TO THE BRAZILIAN CASE

2 Steps of analysis a) Insertion of the electric car in the Brazilian car market simulated by a logistic curve: b) Brazilian Supply and Use Table of 2008 projected for : [...] [...] 2030 with ecar Impact Analysis c) Logistic curve demand applied to the SUTs obtaining SUTs with electric cars d) Impact analysis based on the difference between SUTs with and without ecars

3 The logistic curve dynamics y = participation of electric cars in total car sales per year, C = maximum future participation of electric cars in total car sales, A = Constant expressing the rate between maximum and minimum participation in total car sales, B = constant proportional to the speed of diffusion and t = time in number of years.

4 Input-output analysis The Leontief inverse X = (I-A) -1 Y Input-output analysis, in the form applied today, was proposed by Wassily Leontief in a series of works published from 1936 on about the inter-industry transactions in the United States. Its basic, and better known equation, is the Leontief inverse: Where X = Total production A = Input coefficients matrix Y = Final demand

5 Leontief Model and SUTs The Leontief model has been the object of an enormous amount of improvements and adaptations to meet the ever coming needs involving the systemic study not only of inter- industrial relations, but also the economic relations expressed by the systems of national accounts. As a matter of fact, the Leontief model influenced economic accountancy to such an extent that, nowadays, most of national accounts in the world are arranged to be compatible to the derivation of input-output matrixes. For that purpose, a specific tabulation format named Supply and Use Table – SUT - was devised and normatized by the United Nations, and its Brazilian version is described below.

6 The Brazilian Supply and Use Table Final demand Total production Intermediate consumption

7 SUTs projected for A SUT of twelve products and twelve sectors was obtained from the 56x110 IBGE SUT table for 2008, including the introduction of an electric car sector: 1.Agriculture, hunting, forestry and fishing 2.Oil and natural gas 3.Refining products 4.Steel 5.Mechanical equipment and maintenance 6.Electrical equipment 7.Car industry 8.Electric car 9.Parts for the automobile industry 10.Utilities 11.Others industry 12.Services

8 Electric car insertion in the automobile industry Electric car participation in total car sales

9 Impact on employment per industry Intermediate scenario By construction, all the curves keep the S shaped form of the logistic technological curve. It is shown that slightly more jobs were directly created by the new electric car industry (39,640) than the ones displaced in the traditional automobile industry (38,407), as the upper and lower curves respectively indicate. The other 10 curves showed a considerable balance between positive and negative impacts, though the overall result was negative.

10 Total impact on employment

11 Final remarks The results displayed are just one example among many others that can be worked out, which eventually can result in positive impacts on overall employment, depending on the assumptions adopted for employment- sensitive variables. The objective of the methodology is to support public contingency policies, aimed at the mitigation of undesirable unemployment effects. It paves the way, for instance, to define education and training programs so as to reallocate, or create, jobs, thus avoiding major negative impacts. As the supply and use tables express standard national account variables of widespread knowledge, simulations can be run directly by discussion groups, or decision makers, dispensing with the need of specific skills on input-output techniques. Other important impacts, such as the ones resulting from the implementation of a recharging facilities network, or still in the structure of imports and exports, should also be taken into account in future studies. Taking into account the order of magnitude of the figures presented, the results are enough to show that, in case the electric car become a feasible transport alternative, structural productive transformations of dramatic magnitude can take place, particularly in a Country which relies so much on the car industry such as Brazil.

12 Thank you !

13 Interrelations with intermediate and final economic demand 1.The final demand for the electric car was distributed proportionally over the final demand activities, according to the evolution of its participation in the total car sales. The final demand for conventional cars decreased in the same proportion, and by the same amounts. 2.The final demand economies of the family consumption on gasoline purchases were all spent with extra electricity, both for the electric car and for other ends. 3.Regarding the intermediate consumption, alterations were made directly in the matrix B of product input coefficients. For this first scenario version, just considerations in relation to general trends were made, the major assumptions in the case being: a.As in the final demand, the conventional car was substituted according to the evolution of the electric car participation in the total sales. It is important to remark that the intermediate consumption of cars in Brazil is just a fraction of the order of 5% as compared with final demand. b.The participation of electric equipment in the electric car industry consumption was assumed to be by the same coefficient as the participation of auto parts in the conventional car industry. c.On the other hand, the participation of auto-parts in the electric car purchases had the same coefficient as the electrical equipment for the car industry. d.As the mechanics of the electric car is simpler, the input coefficient for Mechanical equipment and maintenance was assumed as 2/3 of the car industry coefficient. e.No gasoline was assumed to be consumed by the electric car industry. f.The coefficients for the other production sectors were assumed to be the same as for the car industry. 4.The impact on employment was evaluated by assuming a constant relation of 61,6% between the employed population and all population over 10 years (population in active age), which is the figure for 2007, and the demographic projections of IBGE. 5.Given the level of employment as in 7, the employment by sector was projected for the without electric car scenario assuming the same proportionality as in The changes introduced by the electric car insertion in employment were estimated by assuming the same productivity for the sectors, measured in number of employees per total production by sector. The productivity of the electric car sector was assumed as being the same as the productivity of the car industry.

14 Utilizing the SUT framework to simulate the economic impact of new technologies 1.A series of SUTs was projected for the period under a no electric car hypothesis, consisting of a without electric car hypothesis. 2.The electric car was introduced in the scneario above as a new sector of the SUTs, thus leading to the obtention of a with electric car scenario. 3.Impacts were assessed by the comparison between the two scenarios.


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