The employment impact of private and public actions for energy efficiency: Evidence from European industries

Abstract

This paper aims at investigating the main effects on EU employment dynamics related to private and public actions for energy efficiency. The econometric analysis relies on a sector-based panel dataset for 15 EU countries over the time span 1995–2009. The empirical analysis shows that after accounting for the role played by sectoral output growth, investment and innovation activities, sectoral energy efficiency gains display a negative effect on employment growth, in particular in energy intensive industries. On the contrary, we find that public actions towards energy efficiency may produce positive effects on employment dynamics. In particular, the higher incidence of taxation on energy costs, the effort towards energy efficiency gains realized in the public sector industries and the implementation of a comprehensive policy mix for energy efficiency at the country level, are factors positively influencing employment growth. This evidence highlights the complexity of the nexus between energy efficiency and employment dynamics, suggesting that superior employment performances can be achieved when complementarity effects between productivity enhancing activities and energy efficiency actions are realized.