Rural Development Potential in the Bioeconomy in Developed Countries: The Case of Biogas Production in Denmark

Abstract

Policy makers have expressed much optimism about the potentials of the bioeconomy in terms of economic growth and job creation in rural areas in developed countries. However, only few studies have attempted to quantify the rural employment effects of bioeconomic projects. This paper uses the biogas production in Denmark as a case within the bioeconomy. It performs a regional input-output analysis to estimate the number of jobs created in rural areas by an increase in the biogas production. The input-output analysis estimates the direct job creation at the biogas plants, the indirect job creation at firms that supply inputs to the plants, and the induced job creation that is generated locally through increased income spending. The results show that an increase in the biogas production by 10% of the available farm manure will give a permanent increase of 342 jobs and an extra annual income of approximately 21 million euros. Consequently, if all available biomass from farm manure were to be used in biogas production, it would result in 3420 jobs. The calculated employment effect is quite sizable but still somewhat modest compared to the significant employment declines in rural Denmark in recent years. Meanwhile, biogas is only one element in the bioeconomy.