### CHAPTER 15. EMPLOYMENT IMPACT ANALYSIS TABLE OF CONTENTS 15.1 INTRODUCTION ......................................................................................................... 15-1 15.2 METHOD ...................................................................................................................... 15-1 15.3 RESULTS ...................................................................................................................... 15-2 15.3.1 Increased Capital Investment Cost Impacts ................................................................... 15-2 15.3.2 Decreased Energy Cost Impacts .................................................................................... 15-3 15.3.3 Changes in Operations and Ma intenance Costs Impacts ............................................... 15-5 15.3.4 Net National Employment Impacts ................................................................................ 15-5 LIST OF TABLES Table 15.3.1 Conventional Cooking Products Net National Change in Jobs ......................... 15-7 Table 15.3.2 Microwave Oven EF Net National Change in Jobs ........................................... 15-7 LIST OF FIGURE Figure 15.3.1 Conventional Cooking Products Employment Impact of Increased Equipment Cost .................................................................................................. 15-2 Figure 15.3.2 Microwave Oven EF Employment Impact of Increased Equipment Cost ......... 15-3 Figure 15.3.3 Conventional Cooking Product Employ ment Impact of Energy Savings ......... 15-4 Figure 15.3.4 Microwave Oven EF Employme nt Impact of Energy Savings .......................... 15-4 Figure 15.3.5 Conventional Cooking Products Im pacts of Operations and Maintenance Cost Increase ...................................................................................................... 15-5 Figure 15.3.6 Conventional Cooking Products Net National Employment Impacts ............... 15-6 Figure 15.3.7 Microwave Oven EF Net National Employment Impacts ................................. 15-6

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### CHAPTER 15. EMPLOYMENT IMPACT ANALYSIS 15.1 INTRODUCTION The Department defines net national empl oyment impacts from conventional cooking product and microwave oven efficiency standards as net jobs created or elim inated in the general economy as a consequence of: (1 ) increased spending on the purchase and in stallation of new appliances; (2) reduced spending on electricity, natural gas, and water; (3) reduced spending on new investment or capacity by energy compan ies; (4) changes in operation and maintenance costs; and (5) the associated indirect effects of the above. 15.2 METHOD The Department based its analysis on an input/output model of the U.S. economy that estimates the effects of standards on major sector s of the economy related to buildings and the net impact of standards on jobs. The Pacifi c Northwest National Laboratory developed the model, ImSET 1 

### (which stands for Im pact of S ector E nergy T echnologies) as a successor to ImBuild 2 

### , a special-purpose version of the IMPLAN 3 

### 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 ener gy-efficiency investments in buildings. In an input/output model, the level of employment in an economy is determined by the relationship of different sectors of the econom y 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 efficiency standard) in one sector of the economy will affect flows in other sectors, which affects the overall level of employment. ImSET uses a 188-sector model of the nationa l economy to predict the economic effects of residential and commercial buildings technologies. ImSET collects estimates of initial investments, energy savings, and economic activ ity associated with spending the savings resulting from standards (e.g., changes in fi nal demand in personal consumption, business investment and spending, and government spending) . It provides overall estimates of the change in national output for each input-output sector. The model applies estimates of employment and wage income per dollar of economic output for each sector and calcula tes impacts on national employment and wage income. Energy-efficiency technology primarily a ffects the U.S. economy along three spending pathways. First, general investment funds are dive rted to sectors that manufacture, install, and maintain energy-efficient appliances. The incr eased cost of appliances leads to higher 15-1

### employment in the appliance manufacturing sect ors 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 lead s to reductions in utili ty sector investment and employment. 15.3 RESULTS The results in this section refer to impacts of conventiona l cooking product and microwave oven standards relative to the base ca se for each appliance. DOE disaggregated the impact of conventional cooking product and mi crowave oven standards on employment into three component effects: increase d capital investment costs, d ecreased energy and water costs, and changes in operations and maintenance costs. 15.3.1 Increased Capital Investment Cost Impacts Figures 15.3.1 and 15.3.2 show the employment impacts of the increased investment and spending on more-efficient equipment. Because a ppliance manufacturing is relatively capitalintensive compared to other sectors of the econo my, the net result is a sm all loss of employment.Incremental Jobs (1000) 0
-0.1
-0.2
-0.3
-0.4
-0.5 2012 2016 2020 2024 2028 2032 2036 2040

Year TSL1 TSL2 TSL3 TSL4



### Figure 15.3.1 Conventional Cooking Products Employment Impact of Increased Equipment Cost 15-2-0.4 -0.35

-0.3 -0.25

-0.2 -0.15

-0.1 -0.05 0 2012 2016 2020 2024 2028 2032 2036 2040

YearIncremental Jobs (1000)

TSL1 TSL2 TSL3 TSL4 

### Figure 15.3.2 Microwave Oven EF Employment Impact of Increased Equipment Cost 15.3.2 Decreased Energy Cost Impacts Figures 15.3.3 and 15.3.4 show the employment impact of redirected spending made possible by appliance energy savings. In this cas e, the employment impact is strongly positive, increasing employment in the sectors that supp ly these firms with production, investment, or financial inputs.

15-30 0.2 0.4 0.6 0.8

1 1.2 1.4 1.6

2012 2016 2020 2024 2028 2032 2036 2040 YearIncremental Jobs (1000) TSL1 TSL2 TSL3 TSL4



### Figure 15.3.3 Conventional Cooking Product Employment Impact of Energy Savings

0 0.5

1 1.5

2 2.5

3

2012 2016 2020 2024 2028 2032 2036 2040 YearIncremental Jobs (1000) TSL1 TSL2 TSL3 TSL4



### Figure 15.3.4 Microwave Oven EF Employment Impact of Energy Savings
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### 15.3.3 Changes in Operations and Maintenance Costs Impacts Figure and 15.3.5 shows the employment impacts of non-energy operations and maintenance cost increases for conventional c ooking products. Operations and maintenance costs were estimated to be the same for all c onventional cooking product TSLs. No operations and maintenance cost increase was estimated for microwave ovens. Repair and maintenance is comparatively labor-intensive, so the net result is a small increase in employment.

0 0.05

0.1 0.15

0.2

2012 2016 2020 2024 2028 2032 2036 2040 YearIncremental Jobs (1000) All TSLs



### Figure 15.3.5 Conventional Cooking Products Impacts of Operations and Maintenance Cost Increase 15.3.4 Net National Employment Impacts Figures 15.3.6 and 15.3.7 show the estimated net national employment impacts of the conventional cooking products and microwave oven trial standard levels. For any given year, these figures show the net change in the number of jobs in the economy relative to if there were no change in standards (and thus no resulti ng change in spending and cash flow patterns throughout the economy). Tables 15.3.1 and 15.3.2 show the net national employment impact in specific years.

15-5-0.4 -0.2

0 0.2 0.4 0.6 0.8

1 1.2 1.4

2012 2016 2020 2024 2028 2032 2036 2040Incremental Jobs (1000) TSL1 TSL2 TSL3 TSL4

Year 

### Figure 15.3.6 Conventional Cooking Products Ne t National Employment Impacts

0 0.5

1 1.5

2 2.5

2012 2016 2020 2024 2028 2032 2036 2040 YearIncremental Jobs (1000) TSL1 TSL2 TSL3 TSL4



### Figure 15.3.7 Microwave Oven EF Net Nati onal Employment Impacts

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### Table 15.3.1 Conventional Cooking Products Net National Change in Jobs Trial Standard Level 2012 (thousands) 2020 (thousands) 2030 (thousands) 2042 (thousands) 1 2 3 4 0 . 0 1 0 . 0 3 0 . 0 3

- 0.29 0 . 2 0 0 . 4 4 0 . 4 7 0.31 0 . 3 1 0 . 8 3 0 . 8 9 0.9 4 0 . 2 6 0 . 9 4 1 . 0 3 1.21 

### Table 15.3.2 Microwave Oven EF Net National Change in Jobs Trial Standard Level 2012 (thousands) 2020 (thousands) 2030 (thousands) 2042 (thousands) 1 2 3 4 0 . 1 9 0 . 1 5 0 . 1 2 0 . 0 4 1 . 7 5 1 . 7 8 2 . 1 3 2 . 2 2 1 . 7 8 1 . 7 8 2 . 1 0 2 . 1 4 2 . 0 6 2 . 0 7 2 . 4 4 2 . 4 7

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### 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 Nationa l Laboratory. Richland, WA. Report No. PNNL-11884. Prepared for the U.S. Departme nt of Energy under Contract DE-AC06-76RLO 1830. 3 

### Minnesota IMPLAN Group, Inc., IMPLAN Professional: User’s Guide, Analysis Guide, Data Guide , 1997. Stillwater, MN.

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