The Macroeconomic Effects of Energy Efficiency in the Northwest

Aug. 25, 2015
In a new report, the Northwest Energy Efficiency Council finds: “When we eliminate waste through energy efficiency measures, the economy finds a more productive investment, which grows the economy.”

The macroeconomic effects of energy efficiency generally aren’t considered, but should be.

That’s the word from Stan Price, executive director of the Northwest Energy Efficiency Council.

In a new report, the council looked at the macroeconomic effects of energy efficiency in Oregon and Washington and discovered just what Price expected. “When we eliminate waste through energy efficiency measures, the economy finds a more productive investment, which grows the economy,” he says.

The analysis was qualitative, not quantitative.

“There can be a variety of outcomes from energy efficiency,” he says. “Increased sales, increased wages, increased profit for shareholders. The value is not just for utilities, but for everyone who benefits from a larger, more robust economy.”

The report looks at the differences between economic and macroeconomic effects.

“Making businesses and households more energy efficient causes macroeconomic effects,” says the study. “Unlike economic impacts, which focus on spending passed along the supply chain, macroeconomic effects are more broadly felt.

“Better efficiency means that Oregon’s economy can produce more goods and services with less energy and at lower costs. Over time, the cumulative investments in energy efficiency can raise the overall productivity of the economy. This improves economic welfare and elevates the standard of living of Oregon residents. Higher incomes, more jobs, and better quality of life are among the potential effects.”

The report found that in the average year, over a quarter of a billion dollars is invested in energy efficiency products and services in Oregon. And that affects jobs, income and output.

“About $342.2 million of Oregon’s gross regional product (‘GRP’) is linked to energy efficiency investments. Importantly, so too were 4,931 jobs in the state. Those jobs generated $257.1 million in labor income,” says the report.

“In Oregon, the $272.3 million in direct output rippled through the state economy, causing indirect and induced impacts. The sum of these, or total economic output from energy efficiency work, is $504.7 million.”

Find the Oregon report here and the Washington report here.

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About the Author

Lisa Cohn | Contributing Editor

I focus on the West Coast and Midwest. Email me at [email protected]

I’ve been writing about energy for more than 20 years, and my stories have appeared in EnergyBiz, SNL Financial, Mother Earth News, Natural Home Magazine, Horizon Air Magazine, Oregon Business, Open Spaces, the Portland Tribune, The Oregonian, Renewable Energy World, Windpower Monthly and other publications. I’m also a former stringer for the Platts/McGraw-Hill energy publications. I began my career covering energy and environment for The Cape Cod Times, where Elisa Wood also was a reporter. I’ve received numerous writing awards from national, regional and local organizations, including Pacific Northwest Writers Association, Willamette Writers, Associated Oregon Industries, and the Voice of Youth Advocates. I first became interested in energy as a student at Wesleyan University, Middletown, Connecticut, where I helped design and build a solar house.

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