Evaluating the economic impact of wind power development on local economies in China

Given that wind power has received so much public financial support, it is important not only to understand its overall impact but also who receives the benefits and who bears the costs. One important aspect is to quantitatively evaluate the potential impact of wind power development on local economies. This study conducts an ex post econometric assessment of the effect of wind power installation on local economy in China, using a national county-level datacet between 2005 and 2011. We find that installed wind power capacity has a small and statistically significant positive effect on GDP but negatively affect local fiscal income. Based on our results, an additional 1 MW wind power installation (per capita) would bring 2246 RMB increase in GDP per capita over the year 2005 and 2011. The annual benefits is about 321 RMB ($45)increase in GDP per person, which is much lower than the estimates for U.S. case. We further explore why China's wind power development did not benefit local economy as much as the case of U.S.