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ACEEE: True, Energy Efficiency Investment Creates Jobs. But How Many?


Sept. 23, 2015 — This blog post for the American Council for an Energy-Efficient Economy (ACEEE) comes from Jim Barrett, chief economist.

Even when the economy is doing well, economic growth and job creation always seem to be at the center of focus for policymakers at every level of government. So it's only natural that when energy efficiency policies and programs are being discussed, one of the questions that often comes up is how the proposed initiatives will affect jobs.

The good news is that job creation is one of the many benefits that results from smart investments in energy efficiency. We at ACEEE have conducted several studies that demonstrate this point. In our new report "Verifying Energy Efficiency Job Creation: Current Practices and Recommendations," we took a look at efforts to quantify job creation from energy efficiency projects to see how they are being done and to try to establish some best practices to help people in the field tackle the problem.

When efficiency projects and programs are sold at least in part on their ability to create jobs, it's only natural that people would want to know after the fact whether they lived up to their promise, but accurately quantifying the job creation impacts can be hard. The problem is that of all the different ways efficiency creates jobs, only a relatively small fraction are actually observable.

Efficiency investments create jobs in at least two different ways. One is during the implementation of the project itself, like installing a new water heater in a home. The other is when the homeowners re-spend the money the new water heater saves them. Every job created through these two channels falls into one of three categories. "Direct" jobs are created from the initial change in spending patterns. "Indirect" jobs are created one step removed, along the supply chain. "Induced" jobs are created yet one more step further away when the people hired to fill the first two types of jobs take their new income and spend it on rent, groceries, going to the movies, or whatever.

In our water-heater replacement example, the implementation phase direct jobs are the water heater installers, the indirect jobs include things like workers at the water heater factory, and induced jobs are created when the installers and factory workers use new income to go out to dinner. The savings phase creates jobs in the same three categories. When the homeowner uses the money he or she saves on energy bills to buy a book, direct jobs are created at the book store, indirect jobs are created at the publisher, and induced jobs are created when employees at the bookstore and publishing company go out to dinner...

To read the report, visit http://aceee.org/research-report/f1501

To continue reading this blog post, visit http://aceee.org/blog/2015/09/true-energy-efficiency-investment.

The ACEEE acts as a catalyst to advance energy efficiency policies, programs, technologies, investments, and behaviors. For information about its programs, publications, and conferences, visit aceee.org.


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