1 Copyright © 2015 by ASME Proceedings of the ASME 2015 International Design Engineering Technical Conferences & Computers and Information in Engineering Conference IDETC/CIE 2015 August 2-5, 2015, Boston, Massachusetts, USA DETC2015-46180 ECONOMIC AND ENVIRONMENTAL IMPACTS OF ENERGY EFFICIENCY INVESTMENT ON LOCAL MANUFACTURERS Jun-Ki Choi* Department of Mechanical Engineering Industrial Assessment Center University of Dayton, OH, 45469 U.S.A jchoi1@udayton.edu Kevin Hallinan Department of Mechanical Engineering Renewable and Clean Energy Program University of Dayton, OH, 45469 U.S.A Kelly Kissock Department of Mechanical Engineering Renewable and Clean Energy Program University of Dayton, OH, 45469 U.S.A Robert Brecha Department of Physics Hanley Sustainability Institute University of Dayton, OH, 45469 U.S.A ABSTRACT The main goal of this study is to estimate the community- wide economic and environmental impacts of energy efficiency investment on the local manufacturing using data with different granularity. A systematic framework is developed by using multiple scale/layer of data. Result shows that a $14M investment in HVAC upgrade to reduce energy and cost in the economy of the Montgomery County, Ohio can result in a total local economic impact of $22M, stemming from the $14.5M coming from direct impact, $2.8M coming from indirect impact, and $4.7M coming from induced impacts. Job creation over the investment period yields a total of 106 jobs. Analysis provides insight into the most important types of economic effects to the local industries. From an environmental perspective, short term economy-wide carbon dioxide emissions increase because of the increased community-wide economic activities spurred by the production from local manufacturers and installation of energy efficiency measures, however the resulting energy savings provide continuous carbon dioxide reduction for various target savings. INTRODUCTION The American Council of Energy Efficient Economy (ACEEE) reports that the cost to reduce energy is on average 2.5 cents per kilowatt hour, 73% less than the second least expensive resource, natural gas [1]. In the U.S. currently 29 states have some form of renewable or energy efficiency standards [3]. Household decisions that directly affect energy consumption (e.g. choices about appliance purchase and use or home heating and cooling) account for more than 30 percent of U.S. CO 2 emissions, and a comparable amount of overall energy use [7]. However, U.S. residential and commercial energy use increased by respectively 18.4% and 22.9% from 2001 – 2011 [8]. The population increase was only 9.5%. According to the Intergovernmental Panel on Climate Change Fifth Assessment Report, “Warming of the climate system is unequivocal,” and “Human influence on the climate system is clear. [12]” Then what is the solution if any? It is critical to make carbon reduction / sustainability important to people. A special advisor to Mayor Bloomberg in his role as C40 (a global network of cities committed to climate change initiatives) chair, stresses that, "At the end of the day, waste, water, energy consumption and buildings and transportation policy -- those are the jobs of mayors in cities [2]. Many cities committed to sustainability and have adopted goals relative to a variety of sustainability indicators. The city of Cincinnati, Ohio adopted a green energy opt out for all residents in August 2013 [6]. This initiative has provided a jump start toward achieving greenhouse gas emission reduction goals of 8% within four years, 40% within 20 years, and 84% by 2050. New York City set an ambitious goal to reduce citywide greenhouse gas