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The employment impacts of economy-wide investments in renewable energy and energy efficiency

Heidi Garrett-Peltier, University of Massachusetts Amherst


This dissertation examines the employment impacts of investments in renewable energy and energy efficiency in the U.S. A broad expansion of the use of renewable energy in place of carbon-based energy, in addition to investments in energy efficiency, comprise a prominent strategy to slow or reverse the effects of anthropogenic climate change. This study first explores the literature on the employment impacts of these investments. This literature to date consists mainly of input-output (I-O) studies or case studies of renewable energy and energy efficiency (REEE). Researchers are constrained, however, by their ability to use the I-O model to study REEE, since currently industrial codes do not recognize this industry as such. I develop and present two methods to use the I-O framework to overcome this constraint: the synthetic and integrated approaches. In the former, I proxy the REEE industry by creating a vector of final demand based on the industrial spending patterns of REEE firms as found in the secondary literature. In the integrated approach, I collect primary data through a nationwide survey of REEE firms and integrate these data into the existing I-O tables to explicitly identify the REEE industry and estimate the employment impacts resulting from both upstream and downstream linkages with other industries. The size of the REEE employment multiplier is sensitive to the choice of method, and is higher using the synthetic approach than using the integrated approach. I find that using both methods, the employment level per $1 million demand is approximately three times greater for the REEE industry than for fossil fuel (FF) industries. This implies that a shift to clean energy will result in positive net employment impacts. The positive effects stem mainly from the higher labor intensity of REEE in relation to FF, as well as from higher domestic content and lower average wages. The findings suggest that as we transition away from a carbon-based energy system to more sustainable and low-carbon energy sources, approximately three jobs will be created in clean energy sectors for each job lost in the fossil fuel sector.

Subject Area

Alternative Energy|Economics|Labor economics|Energy

Recommended Citation

Garrett-Peltier, Heidi, "The employment impacts of economy-wide investments in renewable energy and energy efficiency" (2010). Doctoral Dissertations Available from Proquest. AAI3427530.