The Bipartisan War on Affordable Air Conditioning
Congressional Democrats and Republicans are currently collaborating on a bill that will make air conditioning more expensive. Hooray for bipartisanship!
Both the House and Senate have verbally agreed to add the pending Senate energy bill to must-pass year-end omnibus spending legislation. Included in that bill are measures that would restrict future production of hydrofluorocarbons (HFCs) on the grounds that they contribute to climate change.
The problem is that HFCs are the refrigerants used in literally hundreds of millions of pieces of equipment owned by Americans—most home and automotive air conditioners as well as refrigerators. Recharging any of these systems after a leak would become more expensive once HFC supplies dwindle and prices rise.
Buying new equipment would also get costlier as systems will have to be redesigned to use one of the environmentally acceptable HFC substitutes. Many of these eco-friendlier alternatives already carry a hefty price premium, and that’s before they get the playing field tilted in their direction by Congress. The leading one, called HFO-1234yf, is nearly eight times more expensive than HFC-134a, which it would replace in new vehicle air conditioners as well as other applications. One online wholesaler is selling the former at $55 per pound and the latter at $7.50 per pound. In addition, some of the new refrigerants are classified by standards-setting bodies as flammable, which may pose safety issues.
Businesses of all sizes also rely on HFCs, from restaurants that use them in refrigerators and freezers to pharmaceutical makers that need to create cold conditions in the manufacturing process. For the latter, scarce HFCs could confer an advantage on industrial competitors in China that don’t face the same constraints.
The flip side to the costs imposed on HFC users is the potential windfall to the companies that make the substitutes. They are led by Honeywell and Chemours, both of which have patented HFO-1234yf and other pricey alternatives, from which they are predicting billions of dollars in additional revenues. Coincidence or not, the bipartisan Senate dream team who spearheaded these measures is comprised of Republican John Kennedy of Louisiana, where Honeywell makes refrigerants, and Democrat Tom Carper of Delaware, where Chemours is headquartered.
They and other supporters downplay or deny the risk of price hikes, but it is important to note that the only reason for these measures is to raise prices. Manufacturers are free to make and sell the new refrigerants and equipment designed to run on them, and they can do so with or without congressional action. The only thing these provisions do is restrict competition from cheaper HFCs.
When Congress acts in a bipartisan manner, it either means the legislation at issue is truly noncontroversial, or that one party is bamboozling the other. In this case it’s the latter. The Democrats not only need Republican votes to get the measure passed, they also want bipartisan cover for something that will prove unpopular with consumers. So far, it looks like Republicans are willing to help them out.
Today it is more expensive cooling. Next may be Green New Deal-style climate measures that do the same for gasoline, utility bills, and who knows what else.
