Reducing energy consumption has economic benefits, as well. First, dollars that are not spent on energy can be directed toward other purposes, which helps stimulate economic activity and job creation. Businesses increase their profits and productivity, which can create jobs. Consumers pay less in energy costs, which makes more of their income available to spend in the local economy. 

Consider Osage, Iowa: Some 20 years ago, the town implemented an energy conservation program which reduces energy costs by $1 million annually. As a result, the local economy is strong: Unemployment is half the national average, new businesses are locating in Osage, and the business climate is healthy. To read more about Osage’s program, see Osage Municipal Utilities Demand-Side Management. 

Secondly, energy efficiency programs create a demand for related products and services, creating jobs and new business markets. 

Energy management programs also are an effective means of relieving budget pressures for local governments. The National Science Foundation estimates that cities can often reduce energy costs by 15 percent without affecting the services they provide to citizens. There are many measures that governments can take to reduce energy consumption; some are simple and inexpensive but effective. However, approaches such as energy tracking--monitoring the costs of energy--and budget incentives--which return savings to individual departments or to the general fund to pay for future energy efficiency projects--can provide the inspiration for departments to save money. And the money saved through these programs has widespread effects: it can reduce local taxes, allow municipalities to purchase equipment and other supplies, and to operate more efficiently. 

Phoenix, Arizona, began a very successful municipal energy program in the late 1970s. The program, despite having started its first year with no funds, has saved the city several million dollars in energy costs. It eventually grew to include a fund that helps finance energy efficiency improvements or purchases. For more information on Phoenix’s program and its use of budget incentives, read City of Phoenix: Energy Savings Reinvestment Plan. 

A 2004 study by the Dr. Ray Perryman, a corporate economist from Texas, concluded that strategic investments in clean energy and efficiency would create more than three million high-wage jobs and at the same time, pay for themselves. Based on this conclusion, an unusual alliance of labor, environmental, civil rights, business, and political leaders today laid out a vision for a "New Apollo Project" to create 3.3 million new jobs and achieve energy independence in ten years. Named after President Kennedy's moon program, which inspired a major national commitment to the aerospace industry, the Apollo Alliance aims to unify the country behind a ten-year program of strategic investment for clean energy technology and new infrastructure. Read more.

Publications

The Economic Power of Energy Efficiency
A fact sheet from the International Council for Local Environmental Initiatives (ICLEI) that explains how energy efficiency can boost local economies.

Energy Efficiency and Job Creation
Examines the impacts on employment and income that could result from improving energy efficiency nationwide. The book illustrates that substantial energy efficiency improvements throughout the U.S. economy could lead to a net increase of 470,000 jobs by 2000 and more than one million jobs by 2010. Available from: American Council for an Energy-Efficient Economy, 2140 Shattuck Avenue, Berkeley, CA 94704. Phone: (415) 549-9914. 

Job Creation Through Energy Efficiency, Conservation and Renewable Energy
Describes findings of several studies which conclude that energy efficiency and renewables can create jobs and other economic benefits.

Last updated January 15, 2004

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