8. Economic Ripple Effects of a Biogas Electricity Power Plant as Part of Earthquake Disaster Restoration in the Coastal Area of Iwate Prefecture

The coastal area of Iwate Prefecture was seriously damaged by the Great East Japan Earthquake in 2011, and the revitalization of this region is an important issue in Japan. This chapter aims to estimate the input–output tables of this region before and after the earthquake and to use these tables to show the impacts of the earthquake and the impacts of a particular revitalization measure: the construction of a biogas electricity power plant. The results showed several distinct features. First, value-added production in 2011 was higher than the previous year because of recovery investment, but both intermediate inputs and the total production decreased. This occurred because the ratio of value-added production in the construction sector was higher than in other industries that were seriously damaged by the earthquake. Second, investment demand increased in 2011 and 2012, but the intermediate inputs and private and public consumption decreased because of the earthquake. The power-of-dispersion coefficients and production-inducement coefficients were slightly changed by the earthquake, but the increasing rate of induced production was low after the earthquake. Third, the multiplier value of induced production for the construction of a biogas electricity power plant would have been 0.64, if it had been constructed before the earthquake. However, that value after the earthquake was 0.17 because industrial linkage was damaged. Compared to the conventional electricity sector, the biogas electricity generation sector induced more production because the import rate of this sector was zero and most induced demand occurred within the region. Therefore, a biogas electricity power plant can contribute to the revitalization of a regional economy although the electricity generation capacity is small.