What is important when modeling the economic impact of energy efficiency standards?

Energy efficiency standards are often cited as a potential economic driver for states that implement them. We identify the major factors that need to be included when determining the economic impact of energy efficiency standards and discuss how these determinants may be incorrectly estimated or ignored within the economic impact literature. Finally, we find that there is a tendency to over-estimate the economic impact of energy efficiency standards and that any jobs created may come at the cost of reduced employment in relatively well-paid sectors.

► We identify the key factors that determine the economic impact of EES.
► There is a tendency to over-estimate the economic impact of EES.
► Energy efficiency standards may lead to just a redistribution of jobs.