CEI Comments on Energy Conservation Standards for Commercial Refrigerators, Freezers, and Refrigerator-Freezers
Department of Energy, Energy Conservation Program: Energy Conservation Standards for Commercial Refrigerators, Freezers, and Refrigerator-Freezers; Notification of Data Availability and Request for Comment
Docket Number EERE-2017-BT-STD-0007 89 FR 68,788August 28, 2024
Introduction
The Competitive Enterprise Institute is a policy and analysis organization committed to advancing the principles of free markets and limited government. For over 20 years, we have participated in rulemakings conducted by the Department of Energy (DOE) regarding energy and water conservation standards for home appliances. Most recently, we have submitted comments for proposed DOE rules targeting residential furnaces, stoves, dishwashers, washing machines, and water heaters. Each is incorporated by reference herein.
Our focus has been on ensuring that the consumer protections built into the underlying statute, the Energy and Policy Conservation Act of 1975 (EPCA), are given full weight by DOE in the rulemaking process. In our view, these consumer protections have frequently been downplayed or ignored by the agency when setting excessively stringent appliance efficiency standards that raise overall costs and/or compromise product choice, features, performance, and reliability.
In addition to questionable claims of net consumer benefits, DOE also includes the calculated climate change benefits as part of its justification for these appliance rules. In response, we have provided in each of our comments a critical assessment of these claimed benefits, which we believe have been greatly exaggerated by the agency. We have also noted that any such monetized climate benefits, regardless of amount, ought to play a limited role given EPCA’s overriding emphasis on the direct consumer impacts of appliance standards.
But now, with the notification of data availability and request for comment for commercial refrigeration equipment at issue here, the agency is considering a major change in its methodology that would further inflate the climate benefits by at least three-fold. Our comment will focus on the problems with the current methodology and how the proposed change would make things worse.
DOE’s Current Methodology for Calculating Climate Change Benefits Is Flawed
Using DOE’s furnace rule as an example of its current methodology, the agency estimated $16.2 billion dollars’ worth of climate benefits, which the agency added to its claimed consumer benefits in justifying the rule. DOE arrived at this figure by calculating the reduced energy use attributable to the new efficiency standards and then estimating the amount of greenhouse gas emissions avoided as a result—mostly carbon dioxide emitted to produce electricity at coal or natural gas-fired power plants, as well as natural gas used directly in residences. It then multiplied the tons of emissions avoided by the estimated per unit dollar cost to society of such emissions.
Prior to the notice of data availability and request for comment at issue here, DOE relied upon the Interagency Working Group’s February 2021 technical support document providing interim estimates of the social cost of greenhouse gases (IWG 2021). IWG 2021 provided the agency with per ton estimates of the social cost of carbon (SC-CO2), methane (SC-CH4), and nitrous oxide (SC-N2O)—collectively, the social cost of greenhouse gases (SC-GHG).
There are numerous flaws with IWG 2021, nearly all of which serve to overstate the calculated benefits of avoided emissions. Among them are the use of improperly low discount rates, reliance on climate models that have consistently overstated actual warming, reliance on baseline emission scenarios that implausibly assume an increasingly coal-centric global energy system through 2100 and beyond, and the downplaying of the capacity for adaptation to mitigate climate impacts. Other questionable assumptions, such as the inclusion of claimed climate benefits out to the year 2300 and the use of global rather than national benefits, further inflate the end results.