Measuring local resilience with a spatial computable general equilibrium model

Abstract

This paper examines the effects of hydrogen-based mobility on local and national economic resilience using a general equilibrium model. The aim is to understand how hydrogen-based technology affects economic performance and resilience, especially in the event of a significant oil price shock. The analysis uses the GMR Hungary spatial general equilibrium model, complemented by micro data on the technological and financial characteristics of hydrogen-based mobility. The latter are derived from a solar green-hydrogen project in Pécs. Complementing the underlying spatial general equilibrium model, the emergence of hydrogen-based mobility technology in the region is introduced as a new sector. In this analytical framework, indicators for calculating economic resilience are introduced and, as an illustration, the economic impacts of a 50% increase in world oil prices between 2030 and 2033 are simulated with and without the presence of the technology. Simulated trajectories for the endogenous variables of the model form the basis for the calculation of the resilience. Results show that hydrogen-based mobility reduces demand for fossil fuels, mitigating the economic risks of oil price fluctuations. It also increases the local economy’s demand for various sectors, such as manufacturing and water supply, as well as for primary resources (labour, capital). The introduction of hydrogen technology reduced the decline in gross value added in Baranya County by HUF 232.5 million in the period under review, mainly by reducing the direct impact of the shock. Although the regional impact of the technology is small, it is positive at the national level, especially in energy-intensive sectors. Future research could investigate the impact of the technology in other regions and at other scales, as well as the need for public support to ensure competitiveness.