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

A METHODOLOGY TO EVALUATE EMPLOYMENT DIRECT AND INDIRECT IMPACTS OF ELECTRIC CAR PRODUCTION

APPLIED TO THE BRAZILIAN CASE

Steps of analysis

SUPPLYNational production

n Sectors

m P

oduc

ts Margins + Taxes + National production

+ Imports

Margins and taxes

by product

Production by sector and productColumns = n sectorsLines = m products

Production by product(Vector Q)

Imports by product

TOTAL SUPPLY Total taxes

Production by sector (Vector X') Total production

Total imports

USEIntermediate consumption (IC) Final demand (FD)

m P

oduc

ts

Intermediate consumption by sector and product

Columns = n sectorsLines = m products

Intermediate consumption by product (Vector U)

Final demand by activity and product

Columns = Exports, Public and private consumption, Investments, Inventories

changeLines = m products

Totals by line

(Vector E)

Intermediate consumption + Final

demand

Intermediate consumption by sector (Vector Z)

Total IC Final demand by activity Total FD TOTAL USE = TOTAL SUPPLY

Value added by sector = X'-Z


n Sectors

m P

oduc


+ Imports

Margins and taxes

by product



Imports by product



Total imports


m P

oduc

ts







Totals by line

(Vector E)


demand




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 2009-2030:2008 2009 [...] 2030

National productionn Sectors

Margins + Taxes + National production

+ Imports

Margins and taxes

by product



Imports by product



Total imports

Intermediate consumption (IC) Final demand (FD)Intermediate consumption by sector

and productColumns = n sectorsLines = m products





Totals by line

(Vector E)


demand





n Sectors

m P

oduc


+ Imports

Margins and taxes

by product



Imports by product



Total imports


m P

oduc

ts







Totals by line

(Vector E)


demand





n Sectors

m P

oduc


+ Imports

Margins and taxes

by product



Imports by product



Total imports


m P

oduc

ts







Totals by line

(Vector E)


demand





Margins + Taxes + National production

+ Imports

Margins and taxes

by product



Imports by product



Total imports

Intermediate consumption (IC) Final demand (FD)Intermediate consumption by sector

and productColumns = n sectorsLines = m products





Totals by line

(Vector E)


demand




2009 [...] 2030 2009 [...] 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

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.

Input-output analysisThe Leontief inverse

X = (I-A)-1Y

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 productionA = Input coefficients matrixY = Final demand

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.

The Brazilian Supply and Use TableSUPPLY


m P

oduc


+ Imports

Margins and taxes

by product



Imports by product



Total imports


m P

oduc

ts







Totals by line

(Vector E)


demand



Value added by sector = X'-ZOccupation by sector

Final demand

Totalproduction

Intermediateconsumption

SUTs projected for 2010-2030A 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

Electric car insertion in the automobile industry

Electric car participation in total car sales

Impact on employment per industryIntermediate 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.

-40,000

-30,000

-20,000

-10,000

0,000

10,000

20,000

30,000

40,00020

10

2012

2014

2016

2018

2020

2022

2024

2026

2028

2030

Imp

act

on

jo

bs

Agriculture, hunting, forestry andfishingOil and natural gas

Refining products

Steel and steel products

Mechanical equipment andmaintenanceElectrical equipment

Car industry

Electric car

Auto parts

Utilities

Other industry

Services

Total impact on employment

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.

Thank you [email protected]

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 2008.

6. 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.

Utilizing the SUT framework to simulate the economic impact of new technologies

1. A series of SUTs was projected for the 2010-2030 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.

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

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