Low Carbon Urban Infrastructure Investment in Asian Cities

ECONOMIC IMPACT ASSESSMENT ON LOW-CARBON INVESTMENT... 83

5.3.2 Methodology

To examine the economic impact of low-carbon investment on the renew-
able energy sectors in Yokohama from 2005 to 2011, this paper employs
an accounting multiplier analysis using the following equation:

XIAy=-()-^1

( 5.1 )

where X = output; (1 − A −1 ) = the Leontief inverse matrix; y = fi nal demand
consumption.
Equation ( 5.1 ) allows us to determine the impact of low-carbon invest-
ment changes in renewable energy sectors from 2005 to 2011 (Δ y ) on the
change in output (Δ x ) as presented in Eq. ( 5.2 ):

xIA y=-()-^1

( 5.2 )

where Δ x = change in output; Δ y = change in fi nal demand based on the
implementation of low-carbon investments in renewable energy in
Yokohama.

5.4 RESULTS

This section presents the results of the input–output analysis by examining
the economic structure of investments on renewable energy sectors and
the relationship between renewable energy investments and other sectors
(as of 2005). National data for this analysis to overview the economic
impact structure in Japan (Sect. 5.4.1, 5.4.2 ). We then present a simula-
tion analysis is used of changes in the economic effects resulting from
investments in renewable energy beginning in 2005 in Yokohama city
(Sect.  5.4.3 ).

5.4.1 Backward Linkages

Backward linkage analyses show how strong growth in a sector results in
the growth of sectors that supply it. In the backward linkage analysis,
manufacturing sectors are ranked among the top ten. Growth in these ten
sectors will have the greater impact on corresponding supply sectors.