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Employment impacts of energy conservation schemes in the residential sector : calculation of direct and indirect employment effects using a dedicated input/output simulation approach. A contribution to the SAVE Employment project: SAVE contract XVII/4.1031/D/97-032
Jeeninga, H.; Weber, C.; Mäenpää, ; Rivero García, F.; Viltshire, V.; Wade, J.
Published by: Publication date:
ECN Policy Studies 1-10-1999
ECN report number: Document type:
ECN-C--99-082 ECN publication
Number of pages: Full text:
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The relationship between investments in energy efficiency and employmentis investigated. The employment effects of several energy conservation schemes implemented in the residential sector are determined by means of a dedicated input/output simulation approach. The employment effects of energy conservation schemes were determined for France, Germany, the Netherlands, Spain and the United Kingdom. Within the time frame of the project, it was not feasible to perform a comparable analysis for Greece, Ireland and Austria. For Finland, the employment effects of energy auditing schemes were investigated by means of a macro economic simulation model. The main driving force behind the positive employment effect of investment in energy efficiency in the residential sector is the fact that the energy sector has a rather low labour intensity. The resulting shift of expenditures from the energy sector to other sectors with higher labour intensity leads to increased employment. The main mechanisms that determine the net shift in employment resulting from investments in energy conservation are: 1. The employment effect related to the initial investment in energy efficiency; 2. The energy saving effect. Due to lower energy bill, a shift in expenditure pattern will occur from the labour extensive energy sector towards sectors with higher labour intensity, thus inducing a net positive effect on employment; 3. The effects of money transfers between sectors. For example, when the investment is subsidised by the government, money is transferred from the governmental sector to the residential sector; 4. Changes in the total government budget as a result of changes in total tax revenue and expenditures on unemployment benefits. Different financing methods for the investment in energy efficiency are analysed. The initial investment can be financed from the general household consumption budget, by means of a loan, using a subsidy or using private savings. The following input parameters were varied, to investigate the sensitivity of the results: taxes and surcharges, type of energy saving, the rate of improvement of labour productivity, energy prices and household composition on total employment was investigated. The main finding of this study is that investment in energy efficiency in the residential sector has a positive effect on total employment. However, the employment effects of the programmes are generally small compared to the size of the investment. Therefore, environmental benefits should remain the main argument for energy efficiency programmes, with job creation as a desirable side effect. The profitability of the investment, the type of investment and the financing method are the most important factors that determine the success of the energy conservation scheme. 53 refs.

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