CHAPTER 15. NET NATIONAL EMPLOYMENT IMPACT ANALYSIS

TABLE O F CONTENTS

**15.1 I**  **NTRODUCTION**

**.................................. ..........................................................................**  **15­1**

**15.2 M**  **ETHOD**

**........................................ .................................................................................**  **15­1**

**15.3 R**  **ESULTS**

**......................................................................................................................... 15­2** 

**REFERENCES**

**.......................................................................................................................... 15­6** 

LIST O F TABLES

**Table 1**  **5.3.1 Net**  **National Change**  **in Jobs**  **for IRL**  **by TSL**  **and Scenario** 

**............................... 15­4** 

**Table 15.3.2**  **Net National**  **Change in**  **Jobs for**  **GSFL by**  **TSL and**  **Scenario**

**............................ 15­4** 

LIST O F FIGURES

**Figure 1**  **5.3.1 Net**  **National Change**  **in Jobs**  **for IRL**  **Trial Standard**  **Levels for** 

**2012­2042 f**  **or the**  **Existing Technologies,**  **Shift, Product** 

**Substitution ........................................................................................................ 15­3**

**F igure**  **15.3.2 Net**  **National Change**  **in Jobs**  **for GSFL**  **Trial Standard**  **Levels for** 

**2012­2042 f**  **or the**  **Existing Technologies,**  **Shift, High**  **Lighting**

**Expertise S**  **cenario**

**............................................................................................. 15­3** 

**15­i**CHAPTER 15. NET NATIONAL EMPLOYMENT IMPACT ANALYSIS

15.1 I NTRODUCTION

**Th e**  **D epartment**  **defines net**  **national employment**  **impacts from**  **improved efficacy** 

**standards for**  **incandescent reflector**  **lamps (IRL)**  **and general**  **service fluorescent**  **lamps (GSFL)** 

**as net**  **jobs created**  **or eliminated**  **in the**  **general economy**  **as a**  **consequence of:**  **(1) increased** 

**spending on**  **the purchase**  **and installation**  **of new**  **appliances; (2)**  **reduced spending**  **on electricity;** 

**(3) r**  **educed s**  **pending on**  **new investment**  **or capacity**  **by energy**  **companies; (4)**  **changes in** 

**operation and**  **maintenance costs;**  **and (5)**  **the associated**  **indirect effects**  **of the**  **above.**

**Employment i**  **mpacts include**  **direct and**  **indirect impacts.**  **Direct employment**  **impacts are** 

**any changes**  **in the**  **number of**  **employees of**  **IRL and**  **GSFL manufacturers,**  **their suppliers,**  **and**

**related service**  **firms (See**  **Chapter 13**  **of the**  **TSD). Indirect**  **impacts are**  **those changes**  **of**

**employment in**  **the larger**  **economy that**  **occur due**  **to the**  **shift in**  **expenditures and**  **capital**

**investment that**  **is caused**  **by the**  **purchase and**  **operation of**  **more efficient**  **IRL and**  **GSFL**

**products. This**  **chapter addresses**  **the indirect**  **employment impacts.** 

15.2 M ETHOD

**Th e**  **D epartment**  **based its**  **analysis on**  **an input/output**  **model of**  **the U.S.**  **economy that** 

**estimates the**  **effects of**  **standards on**  **major sectors**  **of the**  **economy related**  **to buildings**  **and the** 

**net impact**  **of standards**  **on jobs.**  **The Pacific**  **Northwest National**  **Laboratory developed**  **the**

**1 model,**  **ImSET (which stands**  **for Im**  **pact o**  **f S**  **ector E**  **nergy T**  **echnologies) a**  **s a**  **successor to** 

**2 3**  **ImBuild , a**  **special­purpose version**  **of the**  **IMPLAN national input/output**  **model. ImSET** 

**estimates the**  **employment and**  **income effects**  **of building**  **energy technologies.**  **In comparison** 

**with simple**  **economic multiplier**  **approaches, ImSET**  **allows for**  **more complete**  **and automated** 

**analysis of**  **the economic**  **impacts of**  **energy­efficiency investments**  **in buildings.** 

**In a**  **n input/output**  **model, the**  **level of**  **employment in**  **an economy**  **is determined**  **by the** 

**relationship of**  **different sectors**  **of the**  **economy and**  **the spending**  **flows among**  **them. Different** 

**sectors have**  **different levels**  **of labor**  **intensity and**  **so changes**  **in the**  **level of**  **spending (e.g.,**  **due**

**to the**  **effects of**  **an efficacy**  **standard) in**  **one sector**  **of the**  **economy will**  **affect flows**  **in other** 

**sectors, which**  **affects the**  **overall level**  **of employment.** 

**ImSET u**  **ses a**  **188­sector model**  **of the**  **national economy**  **to predict**  **the economic**  **effects**

**of residential**  **and commercial**  **buildings technologies.**  **ImSET collects**  **estimates of**  **initial**

**investments, energy**  **savings, and**  **economic activity**  **associated with**  **spending the**  **savings**

**resulting from**  **standards (e.g.,**  **changes in**  **final demand**  **in personal**  **consumption, business** 

**investment and**  **spending, and**  **government spending).**  **It provides**  **overall estimates**  **of the**  **change**

**in national**  **output for**  **each input­output**  **sector. The**  **model applies**  **estimates of**  **employment and** 

**wage income**  **per dollar**  **of economic**  **output for**  **each sector**  **and calculates**  **impacts on**  **national**

**employment and**  **wage income.** 

**Energy­efficiency t**  **echnology primarily**  **affects the**  **U.S. economy**  **along three**  **spending**

**pathways. First,**  **general investment**  **funds are**  **diverted to**  **sectors that**  **manufacture, install,**  **and**

**15­1 maintain**  **energy­efficient appliances.**  **The increased**  **cost of**  **appliances leads**  **to higher** 

**employment in**  **the appliance**  **manufacturing sectors**  **and lower**  **employment in**  **other economic** 

**sectors. Second,**  **commercial firm**  **and residential**  **spending are**  **redirected from**  **utilities toward** 

**firms that**  **supply production**  **inputs. Third,**  **electric utility**  **sector investment**  **funds are**  **released**

**for use**  **in other**  **sectors of**  **the economy.**  **When consumers**  **use less**  **energy, electric**  **utilities**

**experience relative**  **reductions in**  **demand which**  **leads to**  **reductions in**  **utility sector**  **investment**

**and employment.** 

15.3 R ESULTS

**Th e**  **r esults**  **in this**  **section refer**  **to impacts**  **on employment**  **for the**  **selected years**  **of the** 

**standards relative**  **to the**  **base case**  **for each**  **product. A**  **total of**  **five trial**  **standard levels**  **(TSLs)**

**are modeled**  **for each**  **of the**  **two lamp**  **technologies, IRL**  **and GSFL.**  **In addition,**  **for each** 

**technology, the**  **two scenarios**  **that bound**  **the NIA**  **results are**  **evaluated:**

• **For I**  **RL, DOE**  **evaluated Existing**  **Technologies, Shift,**  **Product Substitution**  **scenario and**  **the**

**Emerging Technologies,**  **Roll­up, No**  **Product Substitution**  **scenario as**  **the high**  **and low**  **range**

**energy savings**  **estimates, respectively.** 

• **For G**  **SFL, DOE**  **evaluated the**  **Existing Technologies,**  **Shift, High**  **Lighting Expertise** 

**scenario and**  **the Emerging**  **Technologies, Roll­up,**  **Market Segment**  **Based, Lighting** 

**Expertise scenario**  **as the**  **high and**  **low range**  **energy savings**  **estimates, respectively..** 

**For a**  **dditional discussion**  **of the**  **formulation of**  **these scenarios,**  **see TSD**  **Chapter 10.** 

**Figure 1**  **5.3.1 illustrates**  **the estimated**  **net national**  **employment impacts**  **of the**  **five**

**different trial**  **standard levels**  **(TSLs) for**  **IRL under**  **the Existing**  **Technologies, Shift,**  **Product**

**Substitution scenario.**  **A detailed**  **discussion of**  **the TSLs**  **can be**  **found in**  **Chapter 9**  **of the**  **TSD.**

**The figure**  **shows, for**  **a given**  **year over**  **the analysis**  **period (2012­2042),**  **the change**  **in the** 

**number of**  **jobs in**  **the economy**  **relative to**  **the number**  **of jobs**  **if there**  **were no**  **change in**  **efficacy**

**standards. Figure**  **15.3.2 illustrates**  **the estimated**  **net national**  **employment impacts**  **of the**  **five**

**different trial**  **standard levels**  **(TSLs) for**  **the GSFL**  **equipment under**  **the Existing**  **Technologies,**

**Shift, High**  **Lighting Expertise**  **scenario. The**  **indirect employment**  **impacts due**  **to amended**  **IRL**

**efficacy standards**  **are considerably**  **smaller due**  **to the**  **correspondingly smaller**  **estimates of** 

**energy savings**  **associated with**  **their adoption.** 

**15­2**Figure 15.3.1 Net National Change in Jobs for IRL Trial Standard Levels for 2012­2042

for t he Existing Technologies, Shift, Product Substitution

Figure 15.3.2 Net National Change in Jobs for GSFL Trial Standard Levels for 2012­2042

for the Existing Technologies, Shift, High Lighting Expertise Scenario

**15­3**1

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5 **Similarly, Table**  **15.3.1 and**  **Table 15.3.2**  **show the**  **net national**  **employment impacts**  **of the** 

**amended IRL**  **and GSFL**  **efficacy standards**  **by trial**  **standard level**  **and for**  **the two**  **scenarios that** 

**bound the**  **NIA results.** 

Table 1 5.3.1 Net National Change in Jobs for IRL by TSL and Scenario

Jobs (thousands)

2012 2 022 2032 2042

Exist ing, S hift, Product Substitution Scenario

TSL 0.1 0.8 1.1 1.4

TSL 0.7 2.2 2.8 3.5

TSL 1.1 3.6 4.6 5.8

TSL 1.1 4.6 5.8 7.5

TSL 1.2 5.2 6.8 8.2

Emerging, R oll­up, No Product Substitution Scenario

TSL 0.0 0.6 0.6 0.9

TSL 0.6 1.9 2.2 2.9

TSL 1.0 3.4 3.9 5.2

TSL 0.9 4.4 5.1 6.9

TSL 1.0 5.2 6.3 7.8

Table 15.3.2 Net National Change in Jobs for GSFL by TSL and Scenario

Jobs (thousands)

2012 2 022 2032 2042

Exist ing, S hift, High Lighting Expertise Scenario

TSL 1.1 10.7 14.2 15.4

TSL 0.9 10.7 14.1 15.2

TSL 2.3 18.8 22.7 21.6

TSL 7.3 32.0 31.2 27.6

TSL 7.4 34.9 35.5 32.4

Emerging, R oll­up, Market Segment Based Scenario

TSL ­0.2 2.9 4.3 5.2

TSL 0.1 4.0 5.2 5.7

TSL 0.9 8.8 10.3 10.1

TSL 2.4 12.8 13.7 13.3

TSL 2.7 15.8 16.2 15.2

**As shown**  **in the**  **above tables,**  **the proposed**  **IRL and**  **GSFL efficacy**  **standards have**  **a**

**small positive**  **impact on**  **jobs, representing**  **well less**  **than 0.1**  **percent of**  **total U.S.**  **employment.**

**The long­term**  **positive and**  **increasing impact**  **occurs because**  **the energy**  **savings in**  **future years** 

**are obtained**  **from both**  **current and**  **previous efficiency**  **investments reflected**  **in the**  **installed**

**stock of**  **efficient equipment,**  **while investment**  **costs for**  **the equipment**  **occur only**  **once.**

**15­4 In**  **conclusion, DOE**  **estimates that**  **net indirect**  **employment impacts**  **from a**  **proposed IRL** 

**and GSFL**  **efficacy standard**  **are relatively**  **small but**  **positive, as**  **shown in**  **Table 15.3.1**  **and Table** 

**15.3.2, respectively.** 

**15­5**REFERENCES

**1 Roop,**  **J.M., M.**  **J. Scott,**  **and R.**  **W. Schultz.**  ImSET: Impact of Sector Energy Technologies

**. Pacific**  **Northwest National**  **Laboratory. July**  **2005.**

**2 Scott,**  **M. J.,**  **D. J.**  **Hostick, and**  **D. B.**  **Belzer,** ImBuild: Impact of Building Energy Efficiency

Programs

**, April,**  **1998. Pacific**  **Northwest National**  **Laboratory. Richland,**  **WA. Report**  **No.**

**PNNL­11884. Prepared**  **for the**  **U.S. Department**  **of Energy**  **under Contract**  **DE­AC06­76RLO**

**1830.**

**3 Minnesota**  **IMPLAN Group,**  **Inc.,** IMPLAN Professional: User’s Guide, Analysis Guide,

Data Guide

**, 1997.**  **Stillwater, MN.** 

**15­6**