Energy Efficiency and Intermediate Labour Markets: a Justification for Investment Programmes?

Panel: Panel 4: Human dimensions of energy use and efficiency

Authors:
Victoria Wiltshire, Association for the Conservation of Energy
Joanne Wade, Association for the Conservation of Energy

Abstract

This paper presents the results of recent work on the employment impacts of investment in energy efficiency in buildings. It addresses the question: are energy efficiency programmes environmental initiatives with positive employment side effects, or can they be part of a sustainable labour market development policy?

The work provides an update on previous studies in this area, many of which are based on information from the mid 1980s: changes in the structure of the labour market and the costs associated with employment are therefore reflected in this work, as are new estimates of multiplier effects. Examples of the level of investment required to generate a person-year of work are calculated from current industry information.

Critics of work on employment suggest that the impact of programmes on the supply side of the labour market result in a net effect of zero employment creation. This paper considers their arguments and presents suggestions for situations where energy efficiency programmes do generate employment.

Proponents of energy efficiency schemes increasingly present employment creation as a positive side-effect, whilst some intermediate labour market programmes have used energy efficiency investment as a tool to achieve their aims. Using current examples of both types of programme, this paper considers the question of whether employment generation is a central benefit of energy efficiency investment programmes, and should therefore be put forward as an argument to support funding for such activities.