City of Atlanta Policy Induced Jobs from Clean Energy Programs Study

City of Atlanta Policy Induced Jobs from Clean Energy Programs Study

By Benjamin Deitchman, Ph.D.

In Conjunction with the Atlanta Better Buildings Challenge 

The purpose of this study, conducted in collaboration with the City of Atlanta Office of Sustainability, Southface, CentralAtlanta Progress, and InvestAtlanta, is to develop an input-output (I-O) model with IMPacts for PLANing (IMPLAN) analysis to estimate the employment and labor income potential of energy efficiency and solar power programs in the City of Atlanta.  This document explains the methodology of the model and its potential uses to understand the economic implications of programs underway or under consideration in the City of Atlanta.  It also provides a brief analysis of how investments in clean energy programs and related shifts in expenditures might benefit the local economy and opportunities for employment.

Model Development Methodology

The key data for the calculations are impact coefficients for 2013 in Fulton County developed through IMPLAN.  IMPLAN is an econometric modeling system developed by applied economists at the University of Minnesota and the U.S. Forest Service. Currently in use by more than 500 organizations, IMPLAN models the trade flow relationships between businesses and between businesses and final consumers (IMPLAN Group LLC 2014). 

The IMPLAN data sets used in this study divides the economy into 536 sectors. Prior research (Deitchman 2011; 2012; 2014; 2015; Deitchman, Brown, & Baer 2011) informed the aggregations and weighting for the bill of goods to determine the key impact coefficients relevant to energy efficiency, solar energy, power generation and transmission, and other economic sectors for the county. The appendix includes the IMPLAN sectoral scheme developed for this analysis.  Figure 1 above shows the coefficients for Gross County Product per dollar of investment, employment per million dollars of investment, and labor income per dollar of investment.  The coefficients incorporate the direct, indirect, and induced demand for the region under consideration and employment coefficients underwent an adjustment to reflect full time equivalency.

Uses for the Model

Table 1 shows the model for further analysis.  The spreadsheet will multiply the energy efficiency investment and solar energy investment by the relevant coefficients derived from IMPLAN to determine the impacts on employment, labor income and gross regional product.  For electricity bill savings there is a deduction from the power generation sector but, on the assumption that savings are an opportunity for increased investment in other areas of the economy, an addition from an aggregation of the rest of the economy.  The table is designed for easy use for any energy efficiency or solar energy deployment effort within the City of Atlanta. 

Table 1: Model for Analysis in Excel

	A	B	C	D
1	Entry	Enter Values Below
2	Energy Efficiency Investment in Million Dollars		Leave Blank if Not Included
3	Electricity Bill Savings in Million Dollars		Leave Blank if Not Included
4	Solar Energy Investment in Million Dollars		Leave Blank if Not Included
5	Results	Results
6	Change in Full Time Equivalent Job Years in Fulton County	B2*C11+B4*C12-B3*C13+B3*C14
7	Change in Total Labor Income in Fulton County in Million Dollars	B2*C11+B4*C12-B3*C13+B3*C14
8	Change in Gross Regional Product of Fulton County in Million Dollars	B2*C11+B4*C12-B3*C13+B3*C14
9
10	IMPLAN Generated Coefficients	Gross County Product	Employment (Full Time Equivalent)	Labor Income
11	Energy Efficiency	$                               0.95	8.95	$         0.71
12	Solar Energy	$                               0.76	7.35	$         0.59
13	Power Generation	$                               0.76	3.28	$         0.37
14	Other Sectors (Aggregated)	$                               0.98	7.91	$         0.63

Limitations of the Model

This model is of Fulton County because IMPLAN data is available by county and not by city.  As most of the City of Atlanta lies within Fulton County and much of the economic activity in Fulton County is within the Atlanta city limits, it is representative of the city’s economy.  As with any model, this effort is an estimate of impacts and not a perfect calculation.  Results will depend on the specific activities of the deployment efforts, achieved successes of the policies, and internal and exogenous changes to the local economy.  The model only accounts for impacts within the region and does not include spillover benefits or costs.  The model, however, incorporates tested and rigorous economic methods in reaching its results. 

Economic Implications of Clean Energy Policy in Atlanta

Consistent with studies in other regions, the results of this analysis indicate that Atlanta could see employment benefits from a shift away from traditional sources of power generation towards energy efficiency and solar energy programs.  Investment in energy efficiency produces more jobs, total labor income, and economic growth per unit of investment than solar energy, power generation, or the rest of other sectors of goods and services within the economy.  Energy efficiency is more labor intensive than other opportunities for investment, particularly in comparison to the established power sector.  It is worth noting that labor income per job is higher in the solar sectors due to the technical expertise required in relevant positions.  Overall these results should help to justify energy efficiency and renewable energy policies and programs based on their economic potential, particularly cost effective investments that yield significant utility bill savings over the long term.     

Resources

Deitchman, B.  (2011). Energy Efficiency and Conservation Block Grants in Georgia: Opportunities for Growth through Local Government Energy Savings. Atlanta, GA: Enterprise Innovation Institute.

Deitchman, B.  (2012). Changing the State of State-Level Energy Programs: Policy Diffusion, Economic Stimulus and New Federalism Paradigms.  World Energy Engineering Congress, November 2012.

Deitchman, B. (2014).  Beyond Recovery- Policy Options for Energy Efficiency Financing.  World Energy Engineering Congress October 2014.

Deitchman, B.  (2015). Jobs, Jobs, Jobs: Energy Efficiency and Growth through State and Local Implementation.  Deil Wright Symposium (American Society for Public Administration), March 2015.

Deitchman, B., Brown, M., & Baer, P.  (2011).  Green Jobs from Industrial Energy Efficiency.  Energy Productivity in Industry: Partners and Opportunities, 2011 American Council for an Energy Efficient Economy (ACEEE) Summer Study on Energy Efficiency in Industry.  Washington, DC:  ACEEE. 

IMPLAN Group LLC.  (2014). IMPLAN System: 2013 IMPLAN County Data for Fulton County – GA.  Huntersville, NC: IMPLAN Group LLC.

Produced by Benjamin Deitchman, Ph.D. as an independent consultant. 

Appendix- IMPLAN Analysis Bill of Goods

IMPLAN Sector Code	Aggregation for Energy Efficiency
52	Construction of new health care structures
53	Construction of new manufacturing structures
54	Construction of new power and communication structures
55	Construction of new educational and vocational structures
56	Construction of new highways and streets
57	Construction of new commercial structures, including farm structures
58	Construction of other new nonresidential structures
59	Construction of new single-family residential structures
60	Construction of new multifamily residential structures
61	Construction of other new residential structures
62	Maintenance and repair construction of nonresidential structures
63	Maintenance and repair construction of residential structures
64	Maintenance and repair construction of highways, streets, bridges, and tunnels
275	Air purification and ventilation equipment manufacturing
276	Heating equipment (except warm air furnaces) manufacturing
277	Air conditioning, refrigeration, and warm air heating equipment manufacturing
297	Industrial process furnace and oven manufacturing
298	Fluid power cylinder and actuator manufacturing
299	Fluid power pump and motor manufacturing
325	Electric lamp bulb and part manufacturing
326	Lighting fixture manufacturing
327	Small electrical appliance manufacturing
328	Household cooking appliance manufacturing
329	Household refrigerator and home freezer manufacturing
330	Household laundry equipment manufacturing
331	Other major household appliance manufacturing
387	Office supplies (except paper) manufacturing
388	Sign manufacturing
389	Gasket, packing, and sealing device manufacturing
398	Retail - Electronics and appliance stores
399	Retail - Building material and garden equipment and supplies stores
463	Facilities support services
IMPLAN Sector Code	Aggregation for Power Generation and Distribution
41	Electric power generation – Hydroelectric
42	Electric power generation - Fossil  fuel
43	Electric power generation – Nuclear
44	Electric power generation – Solar
45	Electric power generation – Wind
46	Electric power generation – Geothermal
47	Electric power generation – Biomass
48	Electric power generation - All other
49	Electric power transmission and distribution
50	Natural gas distribution
IMPLAN Code(s)	Weighted Sectors for Solar Energy	Weight
57/58	Construction	30%
247/248	Hardware Manufacturing	17.5%
301/319/332/333	Electrical Equipment	17.5%
283	Electronic Components	17.5%
455/456	Scientific and Technical Services	17.5%

Note: Any Sectors Not Part of Energy Efficiency or Power Generation are part of the Other Sectors Aggregation