Energy policies directly impact the economy, and many studies have shown that energy efficiency improves economic growth and well-being by saving consumers money while creating jobs. The U.S. economy has tripled in size since 1970 and three-quarters of the energy needed to fuel that growth came from efficiency and productivity advances rather than new energy resources. Future economic sustainability is likely to be even more dependent on new energy efficiency advances.
To better understand and improve the economic benefits and employment impacts of energy efficiency, ACEEE uses economic analysis to assess the economic impacts of energy efficiency technologies, practices, and policies and encourages the use of sound economic modeling practices. These analyses typically estimate impacts on jobs, wages, and gross domestic or state product (GDP or GSP).
One economic analysis tool is an input-output impact model of the economy that evaluates the macroeconomic impacts of a variety of energy efficiency and climate policies at both the state and national level. The model measures the flow of investments in various sectors of the economy, and assesses how shifting investments toward energy efficiency programs and policies can increase employment opportunities. When policies encourage a more efficient use of energy resources, the consumer energy bill savings frees up household spending and can drive a significant increase in the number of net new jobs to the economy. The shift in spending patterns toward energy efficiency also provides a cost-effective redirection of spending away from less labor-intensive sectors such as the utility sector into more labor-intensive sectors such as construction and manufacturing that provide a greater number of jobs.