**1. Introduction**

This paper (The views expressed are purely those of the authors and may not in any circumstances be regarded as stating an official position of the European Commission) focuses on the relationship between energy efficiency policies and macroeconomic performance. A better understanding of this relationship is of key importance due to the increasing volume of regulated energy related products, as well as the number of countries implementing energy efficiency standards. In particular, the aim of the analysis is to add new empirical evidence regarding the macroeconomic impact of specific energy efficiency regulations on three household appliances: dishwashers, washing machines, and washer dryers in the European Union (EU). These appliances contribute approximately 2.8% to the residential energy consumption of the EU [1].

Nowadays, energy efficiency policies are one of the key measures to reduce the impact of human activities on the environment and the climate. Looking at the EU current growth strategy, climate change and energy sustainability priorities establish, for instance, the need of a 32.5% energy efficiency improvement for 2030. The improvement of energy efficiency has key impacts on the efforts that the EU undertakes to reduce energy consumption and greenhouse gas (GHG) emissions [2].

Theoretically speaking, energy efficiency policies are expected to have impacts not only on the environmental footprint of human activities, but also on the economic system through different channels [3]. In a first instance, these policies create incentives for certain economic sectors to introduce

new production technologies, with possible consequent changes in the costs and product prices. On the other hand, energy e fficiency technologies imply a reduction in energy consumption and, therefore, a consequent reduction in energy expenditure. These two direct e ffects will then have repercussions in the entire economy, through changes in the distribution of productive resources or changes in the composition of end-user spending.

The growing attention and use of energy e fficiency policies has given rise to a growing body of literature that seeks to provide scientific evidence on the economic impact of these policies. These studies propose di fferent methodologies, and can be classified into two main approaches: analyses that use partial models, and analyses that instead use general equilibrium models.

When considering the first approach, in recent years a growing number of analyses [4–7] focus on the e ffects of the implementation of energy e fficiency measures on household appliances by using engineering approaches and bottom-up stock models. For example, there are some scientific studies analyzing and projecting the electricity use, water use, pollutant emissions, and consumer welfare implications for household appliances in Europe [8,9]. McNeil et al. (2013) [10] use a bottom-up stock accounting model that predicts the energy consumption of di fferent equipment in 11 EU countries according to engineering-based estimates of the annual unit energy consumption. The authors model a high-e fficiency policy scenario and conclude that significant energy savings can be achieved by adopting the current best practices of appliance energy e fficiency policies. Braungardt et al. (2016) [11] investigate the impact of eco-innovations on the EU residential electricity demand (excluding heating) while using a detailed bottom-up modelling approach and find out that energy savings are achieved through the development of technologies with e fficiencies beyond the status quo. Studies on the market penetration of high energy e fficiency appliances in the residential sector are carried out by Radpout et al. (2017) [12]. These authors develop a model based on econometrics and time series analysis combined with the cost models. They find that governmen<sup>t</sup> incentives to encourage people to buy higher energy e fficient appliances are more e ffective than electricity price policies. Yilmaz et al. (2019) [6] publish a study that describes the development and application of a stock model that allows for quantifying the changes in the number of household appliances in stock, the related evolution of energy e fficiency, as well as the changes/projections of electricity consumption between 2000 and 2035 in Switzerland. From the methodological point of view, this bottom-up stock model addresses the limitations of other previous models [13,14] that o ffer insight into demand dynamics but provide scarce information regarding the evolution of key parameters, such as new technologies, systems, or practices or the forecasting of the sales and stock. Specifically, for washing machines, washer-dryers, and dishwashers, Boyano et al. (2017) [15,16] analyze the environmental, employment, and economic impacts in the EU of stricter energy e fficiency requirements for these appliances. The authors built-up a bottom-up stock model that projects stock sales, lifespans, and related evolution of energy e fficiency classes. They estimate the electricity consumption, water consumption, and consumer welfare between 2015 and 2030. The authors find a decrease in the employment, but they were unable to quantify indirect, supply-chain, or cross-sectorial impacts.

While using a general equilibrium framework, other studies focus instead on the economic and environmental impact of energy e fficiency policy while considering all interlinkages and dependences of the economic system. Hanson and Laitner (2004) [17] use the All Modular Industry Growth Assessment (AMIGA) system to analyse the policies that increase investment in energy-e fficient technologies in the United States (U.S.) economy. They find that the policies would lead to substantial domestic reduction of carbon emissions and a net positive impact on the economy. Rose and Wei (2012) [18] analyse the impacts of the Florida Energy and Climate Change Action Plan that was introduced in 2001. Using the econometric general equilibrium REMI model, they find that most of the recommended options individually—as well as the combined recommendations—have positive impacts on the state's economy. Barker et al. (2016) [19] analyse four di fferent policies that the International Energy Agency suggests in order to close the 2020 emissions gap. They estimate the GDP and employment e ffect while using the econometric general equilibrium model Global Energy-Environment-Economy Model

(E3MG), finding that the policies are not enough to reach the required emissions reduction, although presenting positive impacts on GDP and employment.

There is finally a third group of studies that combine the two approaches using hybrid models. These analyses integrate detailed bottom-up technical descriptions of specific industries a ffected by the policies with a broader economic perspective provided by the macroeconomic framework. Barker et al. (2007) [20] analyze the UK Climate Change Agreements and related energy e fficiency policies for energy-intensive industrial sectors. They combine bottom-up estimates of the e ffects of these policies and the dynamic econometric model of the UK economy Multisectoral Dynamic Model-Energy-Environment-Economy (MDM-E3). They find final energy reduction and a slight increase in economic growth through improved international competitiveness. Ringel et al. (2016) [21] use a hybrid approach—bottom-up model together with the Assessment of Transport Strategies (ASTRA) model—to analyze the environmental and socio-economic impacts of Germany's latest energy e fficiency and climate strategies for the year 2020. They find that enhanced green energy policies bring about economic benefits in terms of GDP and employment, even in the short term. Additionally, the European Commission uses a hybrid approach in the impact assessment of the proposal for the revision of the energy e fficiency directive [22]. The analysis uses bottom-up models— Price-Induced Market Equilibrium System (PRIMES), Greenhouse gas - Air pollution Interactions and Synergies (GAINS), Global Biosphere Management Model - Global Forest Model (GLOBIOM-G4M), Prometheus, Common Agricultural Policy Regional Impact (CAPRI)—together with two di fferent general equilibrium macroeconomic models: the computational general equilibrium model GEM-E3 and the dynamic econometric global model E3ME. While the E3ME model presents positive impacts GDP and employment in all analyzed scenarios, the results for the GEM-E3 models are mixed. Finally, Hartwig et al. (2017) [3] present a case study for Germany, where a scenario including ambitious energy e fficiency measures for building, household appliances, industry, and the service sector is compared to a reference scenario with respect to the macroeconomic impacts. Connecting the energy demand models Forecast and invert/EE-lab with the macroeconomic model ASTRA-D is undertaken to analyze the e ffects of the policy scenarios. The authors conclude that the macroeconomic e ffects of ambitious energy e fficiency policies in Germany have considerable positive impacts on employment (particularly in those that produce energy e fficiency technologies and construction and manufacturing sector, as well as in real-state and consulting) and GDP.

In this paper, we follow the third approach to use the technical information that is o ffered by bottom-up models, while going beyond the direct impacts on employment and value added of the energy e fficiency regulations to analyze their impacts across industries and countries. In particular, we use a hybrid framework combining the detailed bottom-up energy demand stock based model that Boyano et al. developed [15,16], together with the macro-econometric dynamic general equilibrium model FIDELIO [23]. The resulting hybrid model is used to provide new empirical evidence on a specific energy e fficiency policy, which is the revision of the energy e fficiency regulatory framework for dishwashers, washing machines, and washer dryers. In particular, the overarching regulatory framework for energy e fficiency products is the combination of two policies: The Energy Labelling Regulation (EU) 2017/1369 [24], which defines the process of determination of energy label to be displayed in new appliances, and the Eco-design Directive 2009/125/EC [25], which specifies the process of defining minimum energy performance levels. Acting in combination as a pull-push e ffect, these regulatory measures have improved the average energy e fficiency of the household appliance stock over the years in the EU [26]. Regarding the analyzed appliances, their specific regulations are: (1) for washing machines, Regulation EU No 1061/2010 on energy label and Regulation EU No 1015/2010 on Eco-design requirements, (2) for washer dryers Regulation EU No 96/60/EC on energy label, and (3) for dishwashers, Regulation EU No 1060/2010 on energy label and Regulation EU No 1016/2010 on Eco-design requirements. These regulations have been revised in 2014–2018, and adopted in 2019. The revision introduces stricter energy e fficiency requirements of the products that enter the EU market from March 2021, and a rescaling of the energy e fficiency classes. Additionally, some changes in the

testing programs are introduced to bring the energy e fficiency developments of the products closer to the end-user behavior. This paper quantifies the EU-wide economic (in terms of value added) and employment impacts between 2020 and 2030 of such proposed changes to the EU energy e fficiency regulations on the aforementioned household's appliances. The analysis provides results by countries and for most of the economic sectors in the EU.

The paper is organized as follows. Section 2 provides an overview of the methods and materials that were used in the study. Section 3 presents the impacts from changes in the EU regulations estimated using FIDELIO. Section 4 discusses a range of implications of the empirical results, while Section 5 draws some concluding remarks.
