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Wednesday, July 29, 2009

The New and Improved Incandescent: a case study of the way government mandates can spur innovation

It's an easy position, being anti-government, but on occasion an issue arises where only the federal government has the power to step in and bring about the changes we need. Energy efficiency, energy independence, and climate change are all perfect examples of how, absent government mandates, the free market fails to get it done and has failed to get it done time after time. Now, occasionally the government does back the wrong horse, corn ethanol is a perfect example of such an instance, but the case of the incandescent light bulb is indeed a case study of how the government can enact policy that takes a product that should have been obsolete half a century ago, and replaces it with a new technology or new and improved version. When it was announced back in 2007 that the incandescent light bulb, at least in its current form and efficiency, would be phased out by the year 2012, Conservative radio hosts across the country and in Pittsburgh (local right wingers Quinn and Rose) freaked out about the news. But have no fear right wingers and lovers of incandescent light bulbs. Because of the mandate, manufacturers have been rushing to develop new technologies that have already proven to make the old incandescent bulbs 30% to 50% more energy efficient. The impact of having the majority of our residential lighting, be it incandescents, CFLs, or LEDs, at 30%, 50%, and even 100% greater efficiency, is huge in the grand scheme of things. Now that, my friends, is change and government that we can believe in.


Panta Rei said...

Innovation is great - but that does not mean banning cheaper -if more inefficient alternatives, which, even if they have same type of light spectrum, still have short term or rare usage advantages over expensive alternatives...

Europeans and Americans choose to buy ordinary light bulbs around 9 times out of 10.
Banning what people want gives the supposed savings - no point in banning an impopular product!

If new LED lights -or improved CFLs or new improved incandescents- are good,
people will buy them - no need to ban ordinary light bulbs (little point).
If they are not good, people will not buy them - no need to ban ordinary light bulbs (no point).
The arrival of the transistor didn't mean that more energy using radio tubes had to be banned... they were bought less anyway.

All lights have advantages
The ordinary simple light bulb has for many people a pleasing appearance, it responds quickly with bright broad spectrum light, is easy to use with dimmers and other equipment, can come in small sizes, and has safely been used for over 100 years.

100 W+ equivalent brightness is a particular issue - difficult and expensive with both fluorescents and LEDS - yet such incandescent bulbs are first in line for banning in both America and the EU

Since when does Europe or America need to save on electricity?
There is no energy shortage.
Note that if there was an energy shortage, the price rise would make people buy more efficient products anyway - no need to legislate for it.

Energy security?
There are usually plenty of local energy sources,
Middle East oil is not used for electricity generation, 1/2 world uranium exports are from Canada and Australia.

Consumers - not politicians - pay for the energy used.
Certainly it is good to let people know how they can save energy and money - but why force them to do it?

Most cars have emissions.
But does a light bulb give out any gases?
Power stations might not either:
In Sweden and France, as in Washington state practically all electricity is emission-free, while around half of it is in many European countries and in states like New York and California.
Why should emission-free households be denied the use of lighting they obviously want to use?
Low emission households will increase everywhere, since emissions will be reduced anyway through the planned use of coal/gas processing technology or energy substitution.

Also, the savings amounts can be questioned for many reasons:
For a referenced list of reasons against light bulb bans, see
http://www.ceolas.net/#li1x onwards

Even if a reduction in use was needed, then taxation to reduce consumption would make more sense since government can use the income to reduce emissions (home insulation schemes, renewable projects etc) more than any remaining product use causes such problems.
People can still buy what they want, unlike with bans.
However taxation on electrical appliances is in principle wrong for similar reasons to bans (for example, emission-free households are hit too).

Schultz said...

You clearly missed the point of the post and failed to read about the innovations around incandescent light bulbs. The current incandescent light bulb, which are barely changed since Thomas Edison invented it over a century ago, is being banned due to its inefficiency. A lot of consumers are not crazy about CFLs, the only reasonably priced alternative that is currently on the market, so the incandescent bulb manufacturers are innovating to upgrade the incandescent bulb, why? Because there is a market opportunity.

Nick Pinkston said...

I have to agree with Panta Rei. The "market opportunity" is caused by government fiat - which I would argue is market distortion. Panta's point & mine is that we need to actually target what's doing damage: emissions. Mandates on auto emissions, fuel efficiency, light bulbs, etc. all are artificially contrived.

The real economically efficient answer is emissions taxation. This results in the highest ROI project (i.e. ones that reduce the most CO2 for the least economic impact) being selected by market forces for correction.

Having the government - which is vulnerable to special interests (see cap and trade contracts) - determine the winners and losers is economically inefficient.

Government's place is the curing externality effects (such as emissions). This is the best form of market regulation. It's not deleting the free market - it's empowering it. These innovations in the light bulb would come if it this was the best way to reduce emissions - which it may not be.

The only reason to want these piecemeal regulations is because they're easier to pass than the full emissions taxation laws. This is fine, but admit that you're using obfuscatory (and highly inefficient) methods to achieve your goals.


MH said...

We put in quite a few of the new school bulbs (basically everywhere except for a few funky fixtures with explosed bulbs and a couple of basement lights that get used so rarely the bulb hasn't burned out in two years). I haven't noticed a huge shift in the electric bill, but I don't pay that close of attention. Also, I've noticed that I'm much more likely to leave the lights on unless I remind myself that 'efficient' <> 'free'.

the paris apartment said...

CFLs are inefficient in every way. It takes so much more energy to create and dispose of them that it has to cancel out the couple amount saved on your energy bill. Most have Mercury which is fueling our Global need for (especially once governments all ban the incandescent).
Only consumers can boycott these bulbs.
The disposal is ludicrous. We only recycle 1% of what can be now. What are the chances of entire countries disposing them with plastic bags, duct tape, glass jar and gloves? This in itself creates exponential waste. When they break, they've got to go to the the local Hazardous Waste site!

An incandescent can tossed in the trash. And does not risk poisoning the water with mercury if something it broke on gets washed. Or does it require so much energy to make that Ohio factories have to close while GE moves jobs to China.

Besides, an inandescent is like $1 and these are around $5 at least!

When was the last time you had to change an incandescent bulb anyway?