Exploring the Economic Development Implications of Capacity Building within State and Local Energy Efficiency Programs

Denise Mulholland, John A. “Skip” Laitner, and Nikolaas Dietsch, U.S. Environmental Protection Agency

Keywords

Abstract

The deployment of cost-effective energy efficiency technologies can help state and local governments meet economic development and pollution reduction goals. Enhancing the ability of governments, businesses, organizations, and individuals to accelerate market penetration through information-based capacity building programs can therefore lead to added economic and environmental benefits.

We explore this concept in two ways. The first task is to turn to the literature to determine whether state and local capacity-building strategies improve technology deployment. Based on a literature review, we develop a series of program designs that drive three technology diffusion scenarios for the State of Connecticut. These scenarios include: (i) a Reference Case; (ii) a Market Response Case, illustrating the effects of a moderately funded technology diffusion program (e.g., ENERGY STAR) aimed at boosting the supply and adoption of energy efficient building technologies; and (iii) a Capacity Building Case, in which the demand for efficiency is increased through an information-based capacity building program.

The second task is to evaluate the economic impacts of each scenario using the IMPLAN model. IMPLAN is an established regional macroeconomic model that uses a combination of input-output and econometric linkages to explore a wide variety of economic policies. Our goal is to determine whether an expanded capacity building initiative can significantly improve the economic benefits of standard technology deployment programs.