The House of Representatives is expected to vote on the BULB Act this week, which was introduced by Representatives Joe Barton (R–TX), Michael Burgess (R–TX) and Marsha Blackburn (R–TN). The legislation would repeal Subtitle B of Title III of the Energy Independence and Security Act of 2007—the phase-out of the incandescent bulb as we know it. The light bulb ban has become a symbolic representation of the federal government’s intrusion into the American individual’s freedom.
The insinuation behind energy efficiency standards—not just for light bulbs, but for vehicles, appliances, and buildings—is that consumers don’t know what’s best for them. This is clear in what critics are saying about the repeal of the light bulb ban.
Former Senator John Warner (R–VA) said, “We’ll be dropping backwards in America’s need to become more energy-efficient.” Yet when you take a look at America’s energy efficiency track record, it’s not too shabby—and it’s a result of innovation and cost reduction, not government mandates and regulations. Overall, energy consumption per real dollar of gross domestic product has dropped dramatically in the past 60 years, because we’ve innovated and become drastically more efficient in the process.
Interestingly, Secretary of Energy Steven Chu said of the legislation, “We are taking away a choice that continues to let people waste their own money.”
Then why stop with light bulbs? Store-brand cola is much cheaper than Coke or Pepsi. The same is true for cereal, vegetables, and most other products found at a grocery store. Why not mandate that consumers buy the cheaper of the two to save money? Would the same politicians argue that consumers are wasting their money when they buy Coke instead of generic cola?
The difference between these examples and the energy efficiency standard is that Congress is mandating higher sticker prices on lighting with the assumption that it will save consumers money (through cheaper electricity bills) in the long run. But consumers are not stupid. If the more expensive bulbs were truly better in the long run, people would buy them.
People consider several variables—not just the sticker price— when buying a product. When it comes to energy efficiency standards, my colleague David Kreutzer writes, “The implication here is that consumers and producers are unwilling to save money. A more likely explanation is that those contending that markets do not take full advantage of efficiency have themselves ignored other factors that should be included.”
Consumers prefer incandescent bulbs for a number of reasons. Many prefer the soft yellow lighting of incandescents to the unnatural, office-like white light of fluorescents. Residents in houses with wells and septic systems use the heat from incandescent bulbs to keep the water above freezing. Others prefer not to deal with the lengthy cleanup process that comes with broken CFLs, because they contain mercury. There are plenty of reasons consumers buy incandescents, and there’s no good reason for the government to restrict that choice.
Furthermore, we should be wary of the government telling us how much consumers will save as a result of energy efficiency standards. For instance, utilities in California spent nearly $550 million to subsidize compact fluorescent light bulbs (CFLs) for its consumers, and these utilities were eager to see what kind of savings they would generate to subsidize bulb purchases. It turned out that the savings weren’t nearly as high as the electric utility PG&E thought they would be. In March, The Wall Street Journal reported:
When it set up its bulb program in 2006, PG&E Corp. thought its customers would buy 53 million compact fluorescent bulbs by 2008. It allotted $92 million for rebates, the most of any utility in the state. Researchers hired by the California Public Utilities Commission concluded earlier this year that fewer bulbs were sold, fewer were screwed in, and they saved less energy than PG&E anticipated.
As a result of these and other adjustments, energy savings attributed to PG&E were pegged at 451.6 million kilowatt hours by regulators, or 73% less than the 1.7 billion kilowatt hours projected by PG&E for the 2006-2008 program.
This does not mean that CFLs can’t save consumers energy, but the savings haven’t been as much as the government purported.
The bottom line is the market is far better equipped to meet all the demands of consumers—including energy savings. The government should not stand in the way with its “we know best” mentality.