Analysing the economy-wide impact of the supply chains activated by a new biomass power plant. The case of cardoon in Sardinia

Abstract

This study investigates the impact on the economy of Sardinia (Italy) generated by a new biomass power plant fed by locally cultivated cardoon. The cardoon also serves the production of biopolymers. The impact is assessed at an economy-wide level using two multiregional closed Input-Output models, which allow us to take into account the entire supply chain activated and the supra-local effects generated by trade across local industries. The effects are computed under alternative scenarios simulating different levels of substitution of existing agricultural activities with the new activity (cardoon). Results show positive and locally significant impacts in terms of value added and employment. However, these impacts are substantially influenced by the degree of substitution. Results also suggest that there are specific territorial areas that are more sensitive to negative effects induced by substitution.