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CHAPTER 14. EMPLOYMENT IMPACTS ANALYSIS

TABLE OF CONTENTS

14.1 INTRODUCTION .................................................... 14-1

14.2 ASSUMPTIONS ..................................................... 14-1

14.3 METHODOLOGY .................................................... 14-1
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CHAPTER 14. EMPLOYMENT IMPACTS ANALYSIS

14.1 INTRODUCTION

The Department intends the employment impacts analysis to estimate national job creation or

eliminationresulting frompossible standards,due toreallocationofthe associated commercialexpenditures

for purchasing and operating equipment. The Department will estimate national impacts onmajorsectors

of the U.S. economy, using publicly available data and incorporating different energy price scenarios. It

willmake all methods and documentation available for review. The Department will conduct this analysis

during the notice of proposed rulemaking (NOPR) stage of this rulemaking.

14.2 ASSUMPTIONS

The Department expects new equipmentstandardstodecrease energy consumption, and therefore

to reduce expenditures for energy. The savings in energy expenditures may be spent on other items. The

standards may increase the purchase price of equipment, and increase installation costs. 

Using aninput/output model of the U.S. economy, this analysis seeksto estimate the year-to-year

effect ofthese expenditure impacts onnet economic output and employment. A simple model might involve

reduced expendituresfor energy and reallocationofthat moneytoward othersectorsinthe economy. The

Department intendsthis analysis to quantify the indirect employment impacts ofthese expenditure changes.

It will evaluate direct employment impacts in the manufacturer impact analysis.

14.3 METHODOLOGY

TheDepartment ofEnergy’sOfficeofBuildingTechnologies, State andCommunityPrograms(now

the Building Technologies Program) developed a spreadsheet model of the U.S. economy (IMBUILD)

focusing on 35 sectors most relevant to industrial, commercial, and residential building energy use.1

IMBUILD is a special-purpose version of the Impact Analysis for Planning (IMPLAN) national inputoutput model, which specifically estimates the employment and income effects of building energy

technologies.2 The IMPLAN was developed originally by the U.S. Forest Service, in cooperation with

the Federal Emergency Management Agency (FEMA) and the Bureau of Land Management (BLM), to

assist the Forest Service in land and resource management planning. The IMBUILD software includes a

PC-based input-output model with structural coefficients to characterize economic flows among the 35

sectors. The Department may use the IMBUILD model to estimate changes in employment, industry

output, and wage income inthe overall U.S. economy resulting fromchangesin expenditures in the various

sectors of the economy. 

For example, standards may reduce energy expenditures and increase equipment prices in the

residential sector. These expenditure changes mayreduce energy sector employment. At the same time,
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equipment standards may increase manufacturing sector investment, and increase employment in other

sectors of the economy. The Department designed the employment impacts analysis to estimate the yearto-year net employment effect of these different expenditure flows.
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1. Pacific Northwest National Laboratory, ImBuild: Impact of Building Energy Efficiency

Programs, 1998. Richland, WA. Prepared for the U.S. Department of Energy under Contract

DE-AC06-76RLO 1830.

2. Minnesota IMPLAN Group, Inc., IMPLANProfessional:User’sGuide, Analysis Guide, Data

Guide, 1997. Stillwater, MN. 

REFERENCES