Impacts on the economy as a whole (macro economic analysis)
Individual investment decisions on energy efficiency technologies do not only influence our long-term energy demand, but also the growth and structure of our economy, and this is the level of analysis for the macro level in BRISKEE. At the macro level analysis, BRISKEE ties together the understanding of consumer investment behaviour and risk preference from the micro level investigation and the demand scenarios in the meso-level analysis with an overall analysis of effects on the economy as a whole.
The BRISKEE results are less optimistic on possible outcomes than other simulations regarding, for instance, employment. However, the results should be interpreted as a robust outcome, which shows that increased investments in residential energy efficiency still will have at least modest positive economic impacts for the EU, and it is important to look at the long-term dynamic impacts (in particular beyond 2030) that would arise after investments are paid off.
The structural effects of positive and negative demand impulses induce further macro-economic effects, and contribute to a change in the structural composition of the economy. Additionally, the reduction of energy demand lowers the dependence on imported fossil fuels, which has a positive impact on national trade balances.
- The main recommendations from this analysis is that macro-economic impacts need to be carefully investigated in their dynamic dimension between short term and longer term impacts and structural shifts. It is a policy decision and societal debate how these dynamic impacts can be made acceptable in view of long-term benefits. This could imply "exnovation" strategies for actors who will be strongly disadvantaged by the structural changes.
- At the macro-level structural shifts are at first observable which first lead to relatively modest increases in the impacts when moving on to the New Actor-related Measure Scenario.
- While the energy demand would be significantly lower, the macro-economic effects are slightly positive up to 2030. More positive macro-economic effects would be realised after 2030. It is thus important to look at the long-term dynamic impacts that would arise after investments are paid off. The positive effects of energy costs reductions cannot fully be accounted for within the time framework chosen (i.e. up to 2030), because they are lagging behind the investments.
- The BRISKEE modelling shows that energy efficiency investments have positive impacts on GDP and employment even in conservative (or “classic”) scenarios.
- The results are influenced by a rather cautious neoclassical assumption. If a more Keynesian situation were assumed, in which underutilized capacity and idle capital can accommodate additional investments, the assumption of a strong crowding out of consumption by investment would not hold anymore. Under such assumptions, the additional investments lead to increase in a final demand impulse, which leads via multiplier effects to a higher increase in employment and GDP than is depicted in our model run.