Consumers are better off with choices, and worse off when federal regulators step in and take them away. That’s the best way to view today’s Department of Energy (DOE) Final Rule that will likely spell the end of the road for incandescent light bulbs.
DOE asserts that it is required by law to create a 45-lumens-per-watt (LPW) minimum efficiency level for all light bulbs, which incandescent bulbs cannot meet without prohibitively expensive modifications. But as CEI and 14 other free market organizations argued in our comments to the agency last January, the applicable statutory provisions do not compel the agency to do so. We also argued that the 45 LPW standard would violate the consumer protections in the law that forbid the agency from setting efficiency standards that have the effect of reducing available choices.
The only good news is that light-emitting diode (LED) bulbs that can meet the new 45 LPW standard are very good and continue to improve. They are also coming down in price but still cost more than incandescent bulbs and are inferior for certain functions such as dimming. Overall, consumers are better off if they can choose between incandescent bulbs and LEDs rather than regulating LEDs into the only game in town. Ironically, DOE asserts that growing market share of LEDs supports its rule, but in truth it shows that the market is working on its own and that government interference is unnecessary.
Also problematic is DOE’s projections of the rule’s climate benefits. In effect, the agency calculates the tons of reduced greenhouse gas emissions attributable to more efficient light bulbs (the result of marginally less electricity generated) and then multiplies it by the estimated damage done by each ton of such emissions to come up with a midrange estimate of $591 million in annual climate benefits. Our comment pointed out that such calculations of the social cost of greenhouse gas emissions are highly speculative and subject to bias, especially in the hands of an agency like DOE with a regulatory agenda. We also noted that it and other environmental considerations have a limited role in setting appliance efficiency standards, the statutory focus of which is the direct benefits to consumers. Nonetheless, the Final Rule is a sign that DOE sees these efficiency regulations as climate policy tools and that inflated climate considerations are likely to become a prominent feature in subsequent rulemakings.
The rule will take effect 75 days after the Final Rule is published in the Federal Register, so anyone who likes incandescent bulbs may want to buy them while they still can.