Appliances Contribute to Human Progress—but Regulations Threaten Their Affordability

Summary: Home appliances have drastically improved human life, from preventing heat-related deaths with air conditioning to making household tasks more efficient with washing machines and refrigerators. Initially luxury items, many appliances have become affordable and accessible to most households thanks to free-market innovation. However, regulations driven by environmentalist ideology now increasingly threaten the affordability and accessibility of these essential devices, particularly for the lower-income families who need them most.

Human Progress has devoted a considerable amount of attention to home appliances—and for good reason, given the tremendous difference they have made in our lives. Whether it is the heat-related deaths averted by air conditioning, the foodborne illness prevented by refrigeration, the improvements in indoor air quality enabled by gas or electric stoves, or the liberation of women worldwide facilitated by washing machines and other labor-saving devices, these appliances have improved the human condition considerably over the past century or so.

Of course, the benefits of home appliances accrue only to those who can afford them, and on that count, the trends have been very positive. Although many appliances started as luxury items within reach of no more than a wealthy few, they didn’t stay that way for long. For example, the first practical refrigerator was introduced in 1927 at a price that was prohibitive for most Americans, but by 1933, the price was already cut in half, and by 1944, market penetration had reached 85 percent of American households.

Other appliances have similarly spread to the majority of households, first in developed nations over the course of the 20th century and now in many developing ones. And the process continues with more recently introduced devices, such as personal computers and cellphones. Cato Institute adjunct scholar Gale Pooley has extensively documented the dramatic cost reductions for appliances over the past several decades. The reductions are especially striking when measured by the declining number of working hours at average wages needed to earn their purchase price. For example, the “time price” of a refrigerator dropped from 217.57 hours in 1956 to 16.44 hours in 2022, a 92.44 percent decline.

Home appliances are a free-market success story. Virtually every one of them was developed and introduced by the private sector. These same manufacturers also succeeded in bringing prices down over time, all while maintaining and often improving on quality.

If left to the same free-market processes that led to the development and democratization of these appliances, we would expect continued good news. Unfortunately, in the United States and other countries, many appliances are the target of a growing regulatory burden that threatens affordability as well as quality. Much of this is driven by an expansive climate change agenda that often supersedes the best interests of consumers, including regulations in the United States and other nations that could undercut and possibly negate the positive trends on appliances in the years ahead.

Air Conditioners

Many appliances are time-savers, but air conditioning is a lifesaver. According to one study, widespread air conditioning in the United States has averted an estimated 18,000 heat-related deaths annually. Beyond the health benefits, learning and economic productivity also improve substantially when classrooms and workplaces have air-conditioned relief from high temperatures. Yet air conditioning is often denigrated as an unnecessary extravagance that harms the planet through energy use and greenhouse gas emissions. As a result, air conditioning faces a growing list of regulations, the cumulative effect of which threatens to reverse its declining time price.

In particular, the chemicals used as refrigerants in these systems have been subjected to an ever-increasing regulatory gauntlet that has raised their cost. This includes hydrofluorocarbons (HFCs), the class of refrigerants most common in residential central air conditioners. HFCs have been branded as contributors to climate change and are now subject to stringent quotas agreed to at a 2016 United Nations meeting in Kigali, Rwanda. The United States and European Union also have domestic HFC restrictions that mirror the UN ones. These measures have raised the cost of repairing an existing air conditioner as well as the price of a new system.

The regulatory burden continues to grow, including a US Environmental Protection Agency requirement that all new residential air conditioners manufactured after January 1, 2025, use certain agency-approved climate-friendly refrigerants. Equipment makers predict price increases of another 10 percent or more. Installation costs are also likely to rise since the new refrigerants are classified as mildly flammable, which necessitates several precautions when handling them.

Concurrently, new energy efficiency requirements for air conditioners also add to up-front costs. For example, a US Department of Energy rule for central air conditioners that took effect in 2023 has raised prices by between $1,000 and $1,500. This unexpectedly steep increase will almost certainly exceed the value of any marginal energy savings over the life of most of these systems.

The cumulative effect of these measures is particularly burdensome for low-income homeowners and in some cases will make a central air conditioning system prohibitively expensive.

Refrigerators

Refrigerators are technologically similar to air conditioners and thus face many of the same regulatory pressures, including restrictions on the most commonly used refrigerants as well as energy use limits. Fortunately, refrigerators have come down in price so precipitously that the red tape is less likely to impact their near universality in developed-nation households. However, for a developing world where market penetration of residential refrigerators is still expanding, the regulatory burden could prove to be a real impediment.

In addition to environmental measures adding to the cost of new refrigerators, the international community is also targeting used ones. Secondhand refrigerators from wealthy nations are an affordable option for many of the world’s poorest people. For millions of households, a used refrigerator is the only real alternative to not having one at all. However, activists view this trade as an environmental scourge and are taking steps to end it.

Natural Gas-Using Appliances

Several appliances can be powered by natural gas or electricity, particularly heating systems, water heaters, and stoves. The gas versions of these appliances are frequently the most economical to purchase, and they are nearly always less expensive to operate given that natural gas is several times cheaper than electricity on a per unit energy basis. However, natural gas is a so-called fossil fuel and thus a target of climate policymakers who are using regulations to tilt the balance away from gas appliances and toward electric versions. A complete shift to electrification has been estimated to cost a typical American home over $15,000 up-front while raising utility bills by more than $1,000 per year.

The restrictions on gas heating systems are the most worrisome example, especially since extreme cold is even deadlier than extreme heat. Residential gas furnaces have been subjected to a US Department of Energy efficiency regulation that will effectively outlaw the most affordable versions of them. And many European nations have imposed various restrictions on gas heat in favor of electric heat pumps that are far costlier to purchase and install.

Read more at Human Progress