Linking Renewable Energy to Rural Development

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In many OECD countries, governments have invested large amounts of public money to support renewable energy (RE) development and are requiring significant quantities of it to be sold by energy providers. But what are the economic impacts of these policies on the rural regions where deployment takes place? How can RE bring the greatest benefit to host regions? These are some of the questions explored by this study. Drawing on case studies in 16 regions within 10 countries, the research finds that while RE indeed represents an opportunity for stimulating economic growth in rural communities, its development benefits are not automatic. Realising them requires a complex and flexible policy framework and a long-term strategy, as well as a realistic appreciation of the potential gains from RE deployment.  Making a positive connection between RE development and local economic growth will require more coherent strategies, the right set of local conditions, and a place-based approach to deployment. 


North Karelia, Finland

North Karelia (NK) is Finland’s easternmost region and shares around a 296 km frontier with Russia. It is a predominantly rural region dominated by one main urban centre, Joensuu. NK has a population of 165 941 (2009) and an area of 21 585 km2; its average population density is 7.7 inhabitants per square kilometre (Table 9.1). NK has about 2 200 lakes, of which Pielinen is Finland’s sixth largest. The region includes 14 municipalities, five of which are towns. Joensuu is the administrative and economic capital of the region, providing specialised services to local industries, and also acting as a regional gateway. The regional population has been declining slowly; the death rate exceeds the birth rate, and there has been negative net migration for most of the past decade. However, in 2009 in-migration slightly exceeded outmigration, which is encouraging. As with other rural regions in Europe, the decline in birth rates means an increasing elderly dependency ratio. This is slightly higher for NK than for Finland as a whole.


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