Macro-economic effects


In combination with a significant energy efficiency effort, there is almost nothing better for the local economy than increased reliance on biomass fuels. From a macroeconomic perspective, there are three different engines that can be applied to drive local economic development:

(1) economic growth through business expansion (earnings) or employment;
(2) import substitution; and
(3) efficiency improvement.

For energy importing states, biomass use translates into important local economic and employment multipliers. For example, on the European market economic ‘disruptions’ caused by the erratic fluctuations in the price of energy products have been seen several times so far. The tripling of the price of crude oil in 1999 and its effect on the price of natural gas would have a significant impact on the energy bill and the Member States’ economies, were prices to remain at the level. The increase in the price of crude oil led to a net transfer from the European Union of nearly an extra EUR 22.7 billion between January and May 2000.
The spectacular rise in oil prices since 1999, combined with the fall of the euro has already increased the Union’s inflation rate by one percentage point. Economic growth seems to be feeling the effects but growth in GDP remains around 3%. The current situation is leading to a drop in growth rate: 0.3% in 2000 and 0.5% in 2001. Current events show that increases in fuel prices can also cause serious social disruption.

Methane from anaerobic digestion is being added to natural gas and used as transportation fuel in Switzerland		Charcoal sacks stockpiled at the home of rural wood fuel trader, Barangay Guindarohan, Minglanilla, Cebu, The Philippines		Fuelwood – the oldest domestic fuel