Economic Impact Analysis
- Common Modeling Tools
- Airports and Infrastructure
- Carbon Markets and Pricing
- Electricity and Natural Gas Modeling
- Environmental Regulations
- Federal and State Fiscal Policy
- Greenhouse Gas (GHG) Footprints
- Healthcare Reform
- Labor Economics (Minimum Wage)
- Manufacturing Sector Impacts
- Pipelines and Construction
Common Modeling Tools
One of FTI Consulting’s guiding principles of economic impact analysis is to be transparent and to avoid using “black box” models. We therefore apply third-party, peer-reviewed models and update them with the most recent data from public sources. Our customized models are built from the same models and sources. By applying a suite of “objective” models in our analyses, we shift the conversation away from model choice towards inputs and assumptions.
The list below describes several of the modeling tools that FTI typically deploys. Additionally, we often use them in concert and integrate them together – addressing the economic and environmental aspects of projects and policies in a consistent framework:
- IMPLAN – an input-output (IO) model that determines the direct, indirect, and induced effects of construction or spending on a regional economy
- REMI PI+ – a computable general equilibrium (CGE) model that determines the long-term economic and demographic effects of policy at the regional and national levels
- PLEXOS – a simulation model of the North American natural gas and electricity markets, including their interactions, prices, capacity, and generation
- CARAT – the Carbon And Regional Analysis Tool, developed by FTI, assesses the GHG footprint of an industry, nationally or regionally, including its supply chain and labor inputs
- CTAM – derived from the Annual Energy Outlook (AEO), CTAM forecasts GHG emissions at a regional level and assesses the fiscal and cost effects of carbon pricing
Airports and Infrastructure
FTI Consulting can assess the impact of the current operations of airports or other major transportation hubs, the impact of capital investments to expand and improve them, and the benefits gained to the general economy through operations that are more efficient and improve access.
Carbon Markets and Pricing
FTI Consulting experts have extensive experience in modeling carbon pricing (such as the AB32 cap-and-trade in California and carbon taxes across several other jurisdictions) and their impacts on the economy, specific industries, government budgets, and regional and national environmental quality.
Electricity and Natural Gas Modeling
With PLEXOS, FTI Consulting is able to forecast impacts to electric generation and transmission and natural gas upstream and midstream activities. Our analysis provides information to investors, regulators, policymakers, and the public about the impacts associated with projects, regulations, and policy changes.
FTI Consulting is able to show the impact of changing regulations for the energy industry, the manufacturing sector, and the general economy. Our experts have assessed the impact of criteria air pollutants as well as biofuel policy.
Federal and State Fiscal Policy
FTI Consulting is equipped to determine the economic impacts and the impacts to specific industries from budget shocks. Our consultants have applied both REMI PI+ and IMPLAN to model the impacts of major fiscal matters such as the “fiscal cliff” and federal “sequestration.”
Greenhouse Gas (GHG) Footprints
With our CARAT tool, FTI Consulting has the most up-to-date and detailed (in terms of industry and regional granularity) model for GHG footprints and contributions available. FTI has previously applied CARAT towards the GHG contributions of the motion picture industry in California and nationally.
Healthcare is 17.5% of GDP and accounts for over 20 million jobs in the United States. Government programs also make up over 50% of healthcare expenditures. This makes healthcare a vital fiscal and macroeconomic concern, and FTI Consulting has the tools to assess impacts on the sector.
Labor Economics (Minimum Wage)
FTI Consulting’s experts have conducted a first-of-its-kind impact study on $12 and $15 minimum wages at the state and city levels. With higher minimum wages proposed nationally, FTI can assist clients with understanding the economic consequences of their region in terms of employment, GDP, personal income, and tax revenues.
Manufacturing Sector Impacts
FTI Consulting understands the importance of the manufacturing sector to the economy. Our experts have written white papers about the manufacturing renaissance and members of the economic impacts team have worked for major chemical manufacturing firms. Our analyses pay special attention to this crucial sector, and we utilize the industry detail of the REMI and IMPLAN models (up to 160 industries in REMI, 536 in IMPLAN, most being in manufacturing trades) to examine the nuances of the economic impacts on manufacturing.
Pipelines and Construction
FTI Consulting often assesses the implications of natural gas pipeline developments to power generators and energy consumers. We have examined how pipelines affect the economy of states and counties for private groups, stakeholders, and governments.
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