**5. Conclusions**

Many studies support a positive correlation between income growth and energy consumption [39]. This implies that policies aimed at improving energy e fficiency and decreasing energy consumption can have a negative impact on economic growth. With respect to this topic, the study that is reported in this article provides additional insights and granularity on the energy-growth relationship, at EU level, and it suggests two main outcomes.

First, the analysis shows that stricter energy e fficiency requirements of three household appliances—washing machines, dishwashers, and washer-dryers—have a negative macroeconomic impact on value added, a decrease of around two-billion euros. The order of magnitude of the changes that the regulations introduce is small as compared to the whole EU economy since these appliances constitute around 20% of total household appliance energy use. In terms of value added, with 0.01% of the total EU value added, the impact is very small. The reasons behind this result are manifold. Firstly, the stricter requirements are expected to cause an increase in the cost of manufacturing and, consequently, the sales price of appliances, which increases by ca. 10%. Secondly, the result is also due to a change in the composition of household spending: households' savings resulting from a reduction in energy demand can be used to consume other goods and services. Although the energy market is a key industry for economic development, the negative impact that the proposed changes in the EU

regulations are expected to have on this industry is partially compensated by the increase in other industries' production.

The second main outcome is that while the impact on value added is negative, the impact on employment is small but positive. Again, the shift in the composition of the household consumption basket seems to mainly favor industries that use relatively more labor than the industries that are negatively a ffected by the analyzed policies.

In terms of industry distribution, the sector that has the greatest negative impact on value added is the electricity industry, and this e ffect is quite homogenous among European countries. This result is straightforward: policies that aim at controlling emissions by improving energy e fficiency have a negative impact on the electricity production, which is one of the main sectors responsible for GHG emissions. According to the European Environment Agency, in 2017 electricity production generated the largest share of GHG emissions (23.3% of total GHG emissions) [40].

Finally, our results sugges<sup>t</sup> that the proposed changes in the EU regulations would cause a reduction in emissions of around 1.5 million tonnes of CO2-equivalent emissions. As expected, this reduction is driven by the industry producing electricity, but the 30 % of total GHG emissions reduction comes from other industries, such as mining and quarrying, sewerage and waste collection and treatment, or manufacture of coke and refined petroleum products.

**Author Contributions:** Conceptualization, P.R., J.M.R.-C., A.B. and A.V.; methodology, P.R., J.M.R.-C. and A.B.; software, P.R.; formal analysis, P.R. and A.B.; data curation, P.R. and A.B.; writing—original draft preparation, P.R., J.M.R.-C., and A.B.; writing—review and editing, P.R., J.M.R.-C., A.B. and A.V.

**Funding:** This research received no external funding.

**Acknowledgments:** We would like to thank Frédéric Reynes and Jinxue Hu for their fruitful comments and support.

**Conflicts of Interest:** The authors declare no conflict of interest.
