Social externalities of fuel production in Paraná state -Brazil

Abstract

The accentuation of the climate change effects generates a positive prospect for the use of bioenergy at the expense of fossil fuels. There is an expansion of sugarcane in the state of Paraná. This growth combined with installation of new plants or expanding production capacity will benefit directly and indirectly the locational economic dynamics of cities. The aim of this paper is to understand the relevance of related economic activities to the production of ethanol compared to petroleum-based fuels amid new prospects. This article discusses the concept of productive agglomerations in the sectors in question from the perspective of social externalities. The indicator location quotient (LQ) is used as a proxy for the presence of agglomeration and thus production of presence of social externalities. Formal Jobs data were used from the Annual List of Social Information (RAIS) for sugarcane, ethanol, oil extraction and oil products sectors. In this case, it was found that the sugarcane and ethanol production sectors are relevant in the state, which leads to the inference of the presence of agglomeration and externalities economies. In the oil extraction industry and derivatives, however, its performance is incipient and timely. The results showed that the high capillarity from the sugarcane and ethanol sector can generate both a positive externality as a vulnerability.

Keywords

• sugarcane
• ethanol
• oil
• gasoline
• cluster
• social externality