1. Some reflections on How to measure Employment impacts of energy projects at Partner country level: tools & methods, gaps & challenges
Dr. Steffen Erdle, Head of Project RE-ACTIVATE:
«Promoting Employment through RE/EE in MENA»
5th Team Retreat & Planning Workshop
Cairo,

2. Integrated GIZ Approach to Employment Promotion
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

3. Not just promoting more but also better work…
ILO’s decent work concept:
Guaranteeing rights at work
Extending social protection
Promoting social dialogue
ILO’s core labour standards:
Freedom of association and right to collective bargaining
Elimination of forced or compulsory labor, incl. child labor
Elimination of discrimination at the workplace
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

4. Quantifying Employment Effects
Direct jobs: for people working in a specific sector
Indirect jobs: for people working up- & downstream for suppliers and distributors
Induced jobs: resulting from increased income and consumption of direct and indirect workers
Net job creation: also accounting for job losses in competitors
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

5. Several Types of Possible Indirect Effects
Displacement effects: jobs created by a program come at the expense of jobs outside the program (‘crowding out’)
Substitution effects : jobs created for a certain category of workers replace jobs for other categories due to changes of relative wage costs
Deadweight effects : the program subsidizes hiring that would also have occurred in the absence of the program
Mind the opportunity costs! jobs created by the program could also be created somewhere else with less input
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

6. Possible Employment Effects at Different Levels
Direct employment effects: fostering employment e.g. at the level of the service providers and in newly founded start-ups
Direct and indirect employment effects: fostering e.g. an increase in competitiveness through the promotion of innovation/value chains
Indirect employment effects: fostering employment e.g. through interventions at the level of framework: conditions
=> greatest potential for broad impact, but the causality is difficult to prove!
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

7. Measuring Employment Effects
RE sector impact studies
Beyond the RE industry, but not economy-wide impact studies
Economy-wide impact studies
Covered effects
Employment factor approach
Direct
Supply chain analysis
Input-output modeling
Direct, indirect
Employment factor approach with scenario comparison (RE and CE industry)
IO modelling including an adjustment of the consumption vector (electricity prices)
Direct, indirect, induced
Full economic model with scenario comparison
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

8. Employment Factor Approach
EF provide a direct link between physical or financial units (capacity installed, actual production, money invested…) and employment
Simple multiplication only leads to approximate estimates
Transfer of EFs from one region to another require knowledge and data about the respective production and service structures
The literature knows a wide range of EF, because:
Indirect effects are included or excluded
Different system boundaries and different scales are mixed, e.g.
EF for roof-top systems differ from large ground-mounted ones
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

9. RE-ACTIVATE Planning Workshop Cairo
Input-Output Models
Economic tool for the analysis of direct and indirect effects
Illustrates the effects of additional demands in one industry on all industries in the economy
IO tables are available for more than 100 countries in the world
Consistent analytical framework helping to connect an analysis of RE deployment to an analysis done for other sectors or the whole economy
Problem: IO tables only valid when carefully constructed and consistently updated
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

10. RE-ACTIVATE Planning Workshop Cairo
Full Economic Models
Models differ by economic theory and philosophy
Computable General Equilibrium (few data)
Macro-econometric (full system of national accounts and balances, time-series)
Other simulation models (agent based, system dynamics) (full SNAB)
All include feedback reactions, distribution effects and adjustments of the economy
Problem: high requirements with regard to quality data
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

11. Special Challenges for the Energy Sector (RE/EE)
Employment effects vary strongly and are difficult to measure:
Capital-intensive markets, long lead times, heavy political impact
Rapidly evolving worldwide markets, high degree of context specificity
Extreme technological & industrial dynamics
Strong variations between countries and technologies
Effects distributed over time and along the supply chain
Effects differing in terms of the duration and the location
High requirements in terms of the availability and quality of data
14/11/2019
RE-ACTIVATE Planning Workshop Cairo

12. Comparison of Employment Factors: M&I vs. O&M
14/11/2019
RE-ACTIVATE Planning Workshop Cairo