14-i CHAPTER 14. EMPLOYMENT IMPACTS ANALYSIS

TABLE OF CONTENTS

14.1 INTRODUCTION

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14.2 ASSUMPTIONS

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14.3 METHODOLOGY

.................................................... 14-114-1 CHAPTER 14. EMPLOYMENT IMPACTS ANALYSIS

14.1 INTRODUCTION

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

elimination resulting from possible standards, due to reallocation of the associated commercial expenditures

for purchasing and operating equipment. The Department will estimate national impacts on major sectors

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

will make 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 equipment standards to decrease 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 an input/output model of the U.S. economy, this analysis seeks to estimate the year-to-year

effect of these expenditure impacts on net economic output and employment. A simple model might involve

reduced expenditures for energy and reallocation of that money toward other sectors in the economy. The

Department intends this analysis to quantify the indirect employment impacts of these expenditure changes.

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

14.3 METHODOLOGY

The Department of Energy’s Office of Building Technologies, State and Community Programs (now

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

focusing on 35 sectors most relevant to industrial, commercia l, 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 e m ployment 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 in the overall U.S. economy resulting from changes in 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 may reduce energy sector employment. At the same time,14-2

equipment st andards 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.14-3

1. Pacific Northwest National Laboratory, ImBuild: Impact of Building Energy Effici e ncy

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

DE-AC06-76RLO 1830.

2. Minnesota IMPLAN Group, Inc., IMPLAN Professional: User’s Guide, Analysis Guide, Data

Guide , 1997. Stillwater, MN. REFERENCES