The government’s imposition of energy standards for light bulbs illustrates the fatal conceit. I believe that their thinking went something like this.
Edison’s incandescent light bulb is more than 100 years old. When lighting the bulb, more energy is lost to heat than used in light. Certainly, it would be easy to make lighting more energy efficient. We will require bulbs to be 30 percent more efficient by 2014 and 70 percent more efficient by 2020.In 2007, the Congress passed and President Bush signed legislation with this energy requirement and since that time manufacturers have had problems meeting new standards. Compact Fluorescent Lights (CFL’s) cost more, don’t last as long as promised, and pose a small environmental hazard. Light emitting diode bulbs (LED’s) are very expensive and will remain expensive even after production costs fall and competition increases.
Elected officials do not seem to realize that consumers pay attention to cost, both the purchase price and operating cost. I own a minivan rather than an SUV because it gets better gas mileage. My wife and I recently considered buying a bigger home. We considered the extra energy and water cost of maintaining the home. Manufactures have a profit incentive to provide products with characteristics that consumers desire and if consumers want energy efficient products, they will get them.
If our elected officials believe that energy consumption results in a negative externality, they should tax it and not establish “command and control” regulations like those imposed on light bulbs that are fraught with inefficiencies. Faced with higher costs for electricity, the interaction between buyers and sellers will efficiently determine the lowest cost method to consumers for lowering the consumption of electricity.