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Efficiency an engine of economic growth, Acadia study finds

December 23, 2014 - The results of a study from Acadia Center (a non-profit, research and advocacy organization formerly known as ENE) show that reducing demand for energy has a “significant, positive impact on economic growth and job creation beyond those commonly acknowledged or measured”.


December 23, 2014
By Anthony Capkun

Highlights from a range of national scenarios in the modelling study, “Energy Efficiency: Engine of Economic Growth in Canada”, include:

• A total net increase in national GDP of $230-$580 billion over the study period (2012-2040). Every $1 spent on energy efficiency programs results in an increase in GDP of $5 to $8 (every $1 of program plus participant spending increases GDP by $3 to $4).

• A total net increase in national employment of 1.5-4 million job-years. Every $1 million invested in efficiency programs generates 30-52 job-years (every $1 million of program plus participant spending generates 22-27 job-years).

• Across Canada, the peak annual increase in GDP is $19-$48 billion, and the maximum annual increase is 121,000 to 304,000 jobs.

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• This is a net benefit analysis. The results also include the negative ratepayer effects, or costs, to fund programs and losses from avoided electricity generation.

(The Regional Economic Models Inc. [REMI] PI+ model used in the study estimates the net economic impact of a new policy scenario by comparing a base case annual economic forecast of the Canadian economy to an alternate forecast that includes new dollars of investment in energy efficiency, the resulting dollars of savings that are realized and reinvested, and any negative offsets. The above results are the difference, or net gain, between the base case and efficiency scenarios.)

Efficiency investments optimize energy consumption and demand, says Acadia, adding that efficiency resources contribute to economic growth and job creation because:

• Saving energy starts with smart spending. Saving energy requires investment in products like high-efficiency lighting and equipment, as well as community labour (e.g. hiring contractors to install insulation or new windows), generating increased local spending and jobs.

• Saving energy is less expensive relative to other energy options. On average, efficiency programs costs 2-4 cents to save a lifetime kWh of electricity. Investing in energy efficiency when it is lower in cost than traditional energy options lowers the overall cost of the energy system, thereby saving all ratepayers money.

• Energy efficiency lowers energy bills. Improving the energy efficiency of homes and businesses lowers demand for energy and consumer energy bills. Lower energy bills reduce the cost of living and doing business, leading to increased discretionary spending and improved industrial competitiveness, which drives new economic output.