Free-Market Groups Support Trump Light Bulb Reform
The Bush and Obama administrations imposed a number of restrictions on light bulbs, but the Trump administration is pushing back on behalf of consumers. Today, the Competitive Enterprise Institute and 13 other free-market organizations filed a comment with the Department of Energy (DOE) in support of these efforts.
The standards, purported to raise the efficiency of lighting, became law in 2007 and were implemented beginning in 2012. At first they were controversial, as consumers perceived the provisions as a de facto ban on traditional incandescent light bulbs, and many did not like the high price and poor light quality of compact fluorescent bulbs offered as an alternative. However, manufacturers found cost-effective ways to modify incandescent bulbs to meet the standards, so they remained on the market. Furthermore, light emitting diode (LED) bulbs emerged as a popular alternative to incandescents and have rapidly gained market share.
The law now requires the DOE to consider tightening the original efficiency standards for incandescent light bulbs. The Trump DOE has made a preliminary determination to keep the standards where they are. According to the agency’s analysis, a tougher standard would raise the price of an incandescent bulb to a whopping $7.00 each. At that price, nearly 98 percent of consumers would never earn back this higher up-front cost in the form of energy savings. In fact, the economics of ultra-efficient incandescent bulbs are so bad that DOE estimates it will take three times longer (6 years) to recoup the higher purchase price than the average lifetime of such bulbs (2 years).
In reality, so costly a standard would serve to regulate incandescent bulbs off the market. And while LED bulbs continue to gain in popularity, they do cost more than currently available incandescent bulbs and are inferior for certain functions such as dimming.
DOE’s proposal would preserve consumer choice between incandescent bulbs and LEDs rather than making LEDs the only viable option.
The Trump DOE has also dropped the Obama-era policy of adding in the supposed climate change benefits when setting efficiency standards. These controversial social cost of carbon calculations had become a thumb on the scale justifying more stringent standards, and the decision not to include them in this rulemaking helps restore the focus on consumers.
DOE is on solid legal ground in saying “no” to a more stringent standard. The statute giving rise to the light bulb regulations contains several consumer protections designed to prevent new standards that would do more harm than good. These provisions may have been ignored in the past, but the Trump DOE has sent a clear signal that consumers now come first.
You can read our comments to Department of Energy here.