Employment associated with conservation in Ontario

An IndEco project report
Hand installing a CFLThis report contains two major assessment components. The first of these is a literature review of recent reports on employment resulting or expecting to result from energy conservation. This discussion includes an analysis of six recently issued reports. The methodologies of each of these reports are discussed and critically analysed. Information and insight gathered from the literature review are used to conclude on the accuracy and applicability of the estimates provided by the reviewed literature.

A small variety of recent assessments on the employment impacts of energy efficiency in North America are currently available. Although illustrative of the growing place of energy efficiency in the market, many of these assessments do not take a comprehensive look at the issue. In some cases, the reports incorrectly attribute entire industries to energy efficiency rather than the increment in market size or investment particularly due to energy efficient factors. Within the literature review, only two of the analyses provide a comprehensive look at the employment impacts of energy efficiency using macroeconomic analysis.

The second major component of the report provides a macroeconomic assessment of the employment impacts of energy conservation on Ontario. The assessment addresses the issues raised in the literature review by providing a more holistic analysis specific to the province. Using data from the Integrated Power System Plan and a well-defined and documented methodology, the analysis provides a detailed comparison of the economic effects of the conservation and demand management programs of Ontario.

This report is based on a unique assessment of net avoided costs of four pillar Conservation and Demand Management program areas. These include energy efficiency with a net avoided cost of $11.6 billion, demand management programs with about $2 billion, fuel switching with over $2.6 billion and customer based generation with $372 million. In total the system would save over 5120 MW of energy and the total aggregate net avoided costs exceed $16.4 billion. All valuations are in constant 2007 dollars and cover the net avoided costs over the period 2007 and 2027.

The economy of Ontario does not only reap these energy savings and the associated reduction in pollution and greenhouse gases, it is also expected that Ontario will gain significant employment increases and higher wages and salaries. Net employment increases are estimated at more than 50,000 person years. The energy savings release funds that can be used by consumers and businesses on consumption and investment. Governments would also fare well under these programs as the energy conservation is also expected to result in higher government revenues. These added revenues add up to a total of $2 billion.
2538_The_employment_impacts_of_energy_conservation_final.pdf540 kb

Related information

Econometric Research Limited: home page
IndEco paper (with ERL): Modelling environment-economy linkages
Ontario Power Authority's Integrated Power System Plan (IPSP)