Research has shown that energy developments generally receive more support from the local community when they are expected to deliver local economic benefits. Energy developments also present the potential to support local economic development objectives. However, the local economic benefits resulting from an energy development can vary, depending on the ownership model and community benefits offered.

This report summarises the findings of a research project that examined the comparative local economic impacts of a local energy development under two alternative ownership models.

Using a proposed wind farm development for the Shetland Islands as an example, the research analysed the potential local economic and employment effects of an energy development under two scenarios: one where there is no local ownership but a community benefit scheme provides direct payments to the local community; and one with 50% local ownership.

This research found that local ownership confers the greatest economic benefits for the local community, far above the level that community benefit payments might be expected to provide.

A link to the full report, on which this brief is based, is available in the ‘useful links’ heading on this page.

Useful links

Most economists regard a carbon tax as the most efficient way to reduce carbon emissions. In this perspective it is interesting to consider the effect of a Scottish-specific carbon tax. It is particularly relevant given the demanding environmental targets set by the Scottish Government and the present discussions around increased fiscal autonomy. 

This brief uses an energy – economy – environment model of Scotland to simulate the impact of the Scottish Government imposing such a tax on carbon emissions and the level of aggregate, and sectoral, economic activity.