Contents: - Measuring employment impacts / Methodology - Employment impacts Indicators / Illustrative results

1. Side event 09/05/2018
EMPLOYMENT IMPACT
MODEL
Markus Hagemann, Harry Fearnehough
May 2018

2. MEASURING
EMPLOYMENT IMPACTS
Methodology

3. • To provide policy makers with a transparent analyis on
job impacts of different future pathways for the entire
sector
• To lay out the factors which most influence
employment in the electricity sector
• To analyse the longevity /sustainability of jobs across
sectors over time
Objectives of analysing labour market impacts in the
electricity sector
3

4. 4
We focus our analysis on direct employment based on
investment data
Investments across all supply-side
technologies
Component level investment
disaggregation
Planning
Professional services
Preparation of site
Construction
Operation & maintenance

5. 5
Simple illustration of methodology
$20
$60
$100
Component level investment
Domestic share of investment Foreign investment
Labour Materials, land, etc.
Annual average salary to make
component is $2
A $20 investment in the labour market
creates 10 jobs for 1 year
60%
33%
X
X
$2/

6. 6
We also quantify the indirect and induced employment
impacts drawing on macroeconomic statistics
A full economic analysis considers different categories of employment that extend
beyond the electricity generation sector to all areas of the economy
jobs created in the electricity generation sector (e.g. manufacturing equipment,
construction of plants, professional services and project management, etc.)
Direct
jobs created in secondary sectors upstream in the supply chain (e.g. the
metallurgical or mining industries)
Indirect
jobs created across all sectors of the economy as a result of an investment
stimulus. The salaries of those that directly and indirectly benefit from the
investment are spent on other, unrelated activities, such as rent,
restaurants, healthcare, groceries…etc.)
Induced

7. 7
Key data inputs required in the model
New capacity
New capacity added to the system by technology and year; where only total capacity projections
are available then assumptions related to capacity retirements are required
Generation
Electricity generation by technology and year; where output data is unavailable default load factor
assumptions can be used to derive estimates of output from the total capacity data
Investment
Investment costs by technology broken down into component parts; where detailed disaggregated
data is unavailable capex, fixed opex and variable opex can be allocated using default assumptions
Estimate of the share of the total investment in a component
part spent in the domestic market
Sector of the economy corresponding to the component part
activity based on sector granularity of the Input Output table
Input Output
Input Output tables that reflect the interrelations between economic sectors of the country and
include estimates of the share of investments in a sector directed to the labour market
Salaries
Average annual salaries, including employee and employer taxes (if available), by economic sector
as a proxy for the labour cost
Local share
Sector

8. EMPLOYMENT IMPACTS
INDICATORS
Illustrative results

9. 9
Illustrative employment impact results by technology
and economic sector

10. 10
Illustrative results of employment creation split
between capex and opex related investments

11. 11
We calculate impacts denominated in different units to
facilitate comparison across technologies and scenarios

12. 12
We use Input Output tables to calculate direct, indirect
and induced employment impacts
• Indirect and induced
employment impacts together
typically account for more than
half the total employment
impact
• Analysis is carried out based on
cumulative investment over a
defined modelling horizon
• Estimating annual impacts
would be computationally
demanding in Excel

13. • Working with
• The Ministry of Energy (MINEM)
• With a national scenario development platform:„Plataforma escenarios energéticos“
• Approach
• Develop tools that are transparent and link to data used by the target group
• Discuss and adjust them with the target group in the country
• Provide default input data (where possible country specific) and enable countries to insert their
own data
• Train / work with target group to be able to use and adjust tools
• Ultimate aim: Develop tools that are usefull in the country context and that can be used in the
national discourse even after the support stops.
13
Anchouring ourselves in countries
Example Argentina

14. THANK YOU FOR YOUR ATTENTION
Markus Hagemann
m.hagemann@newclimate.org
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