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Title:
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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
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Author(s):
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Jeeninga, H.; Weber, C.; Mäenpää, ; Rivero García, F.; Viltshire, V.; Wade, J.
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Published by:
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Publication date:
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ECN
Policy Studies
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1-10-1999
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ECN report number:
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Document type:
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ECN-C--99-082
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ECN publication
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Number of pages:
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Full text:
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158
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Download PDF
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Abstract:
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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