Socio-economic principles should form the foundation of the assessment of public policy instruments, measures and investments. Overarching assessments of whether various measures are socially beneficial reflect how the economy as a whole is affected. We carry out cost-benefit analyses and impact assessments that assess the social benefit of various projects and their expected effects on employment and national and local GDP if implemented.
Socio-economic analysis also covers industrial strategy, which covers how the government’s industrial strategy should be designed to secure long-term industrial development, employment and economic growth. A live issue for Norway, for example, is how we can solve the simultaneous transformation of the industrial landscape, from its current domination by oil and gas to one that reflects the expected transition to a low-carbon society. These are questions that THEMA has experience analysing through our project work for various clients.
Our services related to socio-economic analysis include the following:
- Analyses of measures and instruments. The transformation of the transport and energy system should be done in a socially efficient way. Key issues include how the policy framework can be designed to promote the cost-effective transformation of the economy so that our overall objectives are achieved without wasting resources. Frameworks to promote the decarbonisation of transport are one area in which THEMA has specialised. The analysis of instruments for the restructuring and adaptation of the energy system is another example.
- Cost-benefit analyses of is used, among other things, when larger public policies measures need to be considered. The question is whether the social benefits of the policy outweigh its social costs. In the power sector, cost-benefit analysis is particularly relevant for major grid investments. Here costs include both an assessment of direct investment and operating costs as well as indirect costs, including the cost imposed on the surrounding natural environment.
- Ripple effect analyses are primarily used to assess the consequences of an investment program or a single investment project for employment and GDP in the economy as a whole. THEMA has developed its own model to assess both the direct and indirect effects on the supply chain and the economy as a whole. We have, over time and through the ripple effect analyses we have conducted, built up a knowledge of relevant costs in both power generation and grid infrastructure.
- Industrial strategy analysis covers issues related to industrial development and how public authorities can, using policy, create conditions for economic growth in a variety of sectors. In THEMA’s industrial strategy analysis we focus in particular on the decarbonisation of the economy and the resultant opportunities for value creation.
THEMA’s socio-economic analysis also covers how economic policy and regulation can be designed to ensure the optimal use of resources. This requires that market actors are given incentives to act in a way that safeguards social objectives in both the short and long term. It is also important that market actors understand how the policy and regulatory framework affect market behaviour.