Let the State Choose Your TV?

There are many things to consider when choosing a television to buy. Some consumers care about color contrast. Others want high resolution. And still others prefer a thin panel.

California regulators, however, want to eliminate these choices. As early as next week, the state's Energy Commission will vote on standards that would force consumers to give priority to one attribute over all others: energy efficiency.

Under California law, the state government can impose efficiency standards only if the regulations do "not result in any added costs to the consumer." This is a great consumer protection, and the commission tortures logic to get around it.

For example, the commission's staff report brazenly claims that enhanced television efficiency standards would come at zero cost. That doesn't make any sense. If television manufacturers could produce a more efficient TV at zero cost with consumer appeal, they'd do it.

The staff report further claims that the efficiency standards would stimulate the economy because Californians will spend all the money they would save on electricity on other consumer goods. That's a dubious assumption, but even if it were correct, and Californians spend all the money "saved" by their superefficient TVs, what are they going to buy? Among other things, more TVs!

Whatever consumers do buy with this alleged new discretionary spending, it is sure to use up energy, which defeats the purpose of energy-efficiency regulations. Conveniently, the staff report ignores this "rebound" effect.

Unfortunately, this kind of flawed economic reasoning is common among California policy-makers laboring under the illusion that environmental regulations can serve as an economic stimulus. Last year, for example, the California Air Resources Board was hammered by a nonpartisan peer review for publishing an absurdly optimistic economic analysis of the cost of achieving the state's greenhouse-gas emission reduction goals.

In practice, the commission's television standards will effectively ban a subset of the large-screen market. If you are looking to buy a big TV, there are two choices: plasma panels and liquid crystal display. Generally speaking, plasma TVs have superior color contrast and viewing angles; LCDs have higher resolution and are lighter. But LCDs are significantly more energy efficient. So the commission's efficiency standards would give LCD technology a big advantage over plasma.

How big? According to an economic analysis of increased efficiency standards by the Consumer Electronics Association, "plasma displays would effectively be eliminated from the California market."

The commission's TV standards are part of California's 30-year war on energy consumption, which has influenced the appliance, automobile and housing markets, among others. To hear California politicians tell it, the Golden State's energy efficiency policies have been an enormous success. As "proof," they often note that the average Californian consumes 40 percent less electricity than the average American.

However, this is a misleading claim, because there are many factors besides energy efficiency standards that have resulted in California's relatively low per capita electricity consumption, including the state's mild climate, urbanization and high household density.

In fact, energy conservation policies account for 23 percent of the difference in electricity consumption between the average Californian and the average American, according to a report from Stanford University. And this percentage is largely explained by the fact that California has some of the highest electricity prices in the country, which depresses demand.

LCD or plasma – it's a long-running debate among consumers. California regulators want to end that debate for illusionary environmental benefits. Yet, as we've seen, California's energy conservation "success" is not due to the state's energy policy.