If energy needs to be saved, there are good ways to do it.
                                                               Government product regulation is not one of them

Tuesday, January 7, 2014

The Odd Green Crony Capitalist Coalition Behind Banning Bulbs

January 7 article by Shawn Regan, from Reason.Com
Good on the industrial policy behind the ban

Lights Out For America’s Favorite Light Bulb

Happy New Year, America! Your favorite light bulb is now illegal.

Well, sort of. As of January 1, U.S. businesses can no longer manufacture or import “general service” incandescent bulbs—the most popular light bulbs in America. Consumers can still buy and use them while supplies last, but the remaining inventory won’t be around for long. Home Depot says it will be out of the bulbs within six months. Some consumers have started to stockpile.

It’s all part of the energy efficiency standards mandated by the Energy Independence and Security Act of 2007. The law already killed off the 100-watt incandescent bulb in 2012, followed by the 75-watt bulb in 2013. Now, in the final step of the phaseout, the minimum efficiency standards have effectively banned the ubiquitous 40- and 60- watt light bulbs.

When industry and environmental groups claim that a regulation will solve all problems, consumers beware. It’s probably green cronyism in disguise.

The ban is crony capitalism in its most seductive form — when it’s disguised as green.

Major light bulb manufacturers supported the ban from the outset.
The profit margin on old-style bulbs was pitifully low, and consumers just weren’t buying the higher-margin efficiency bulbs. New standards were needed, a lobbyist for the National Electrical Manufacturing Association told Congress in 2007, “in order to further educate consumers on the benefits of energy-efficient products.”

So Philips Electronics and other manufacturers joined with environmental groups to push for tighter lighting standards.
As the New York Times Magazine explained in 2011, “Philips told its environmental allies it was well positioned to capitalize on the transition to new technologies and wanted to get ahead of an efficiency movement that was gaining momentum abroad and in states like California.” After much negotiation, a classic “bootleggers-and-Baptists” coalition was born. Industry and environmental groups agreed to endorse legislation to increase lighting efficiency by 25 to 30 percent.

Incandescent light bulbs, we’re told, are vastly inferior to the newfangled alternatives available today.
The compact fluorescents lamps (CFLs), LEDs, and halogen bulbs are an apparent no-brainer: They last longer and convert much more of their energy into light rather than heat, all while cutting back on your energy bill. (So, of course, the government must stop you from ever making the mistake of choosing the traditional bulbs.)

Except many consumers aren’t buying it.
The EPA estimates that, of the four billion light-bulb sockets in United States, more than three billion still hold incandescent bulbs. “By 2014, the traditional incandescent light bulbs… will be virtually obsolete,” claimed a 2007 press release from former Sen. Jeff Bingaman, the ban’s original sponsor. But according to the latest industry data, incandescents still make up nearly 65 percent of all U.S. light-bulb shipments.

Many consumers are turned off by the higher upfront costs of the alternatives.
A single 40-watt LED bulb costs $7.50 or more, while a traditional incandescent bulb goes for around 40 cents. Some are finding that the CFLs don’t last nearly as long as their supporters claim—especially if they are switched on and off frequently, or if they are attached to a dimmer switch.

The list of complaints about the “efficient” bulbs goes on:
They are often slow to respond, sensitive to high temperatures, and can cast a harsh and unattractive tone. CFLs also contain a small amount of mercury, which requires extensive and careful cleanup when a bulb breaks.

And they may not be saving us much energy after all.
The typical U.S. home uses no less energy per capita than it did in the 1970s, despite an onslaught of efficiency standards for everything from refrigerators and televisions to the amount of power consumed when appliances are in “standby mode.” The money saved in the long run by using these appliances is often spent on even more power-sucking gadgets. And if light bulbs cost less to use, why not just leave the lights on longer?

The light-bulb ban is an example of how political coalitions are formed to force regulations on the general public that benefit a few large producers.
A recent survey found that six out of every ten Americans are still in the dark about the latest bulb ban. Meanwhile, the dimwitted light-bulb policy just became the law of the land.
The lesson here is straightforward: When industry and environmental groups claim that a regulation will solve all problems, consumers beware. It’s probably green cronyism in disguise.

Shawn Regan is a research fellow at the Property and Environment Research Center (PERC), a nonprofit research institute in Bozeman, Montana, dedicated to improving environmental quality through property rights and markets.

This complements a January 1 article by Tim Carney at the Washington Examiner.
Tim Carney has for several years covered the industrial policy behind the USA ban.

Industry, not environmentalists, killed traditional bulbs

Say goodbye to the regular light bulb this New Year.

For more than a century, the traditional incandescent bulb was the symbol of American innovation. Starting Jan. 1, the famous bulb is illegal to manufacture in the U.S., and it has become a fitting symbol for the collusion of big business and big government.

The 2007 Energy Bill, a stew of regulations and subsidies, set mandatory efficiency standards for most light bulbs. Any bulbs that couldn't produce a given brightness at the specified energy input would be illegal. That meant the 25-cent bulbs most Americans used in nearly every socket of their home would be outlawed.

People often assume green regulations like this represent the triumph of environmental activists trying to save the planet. That’s rarely the case, and it wasn't here. Light bulb manufacturers whole-heartedly supported the efficiency standards. General Electric, Sylvania and Philips — the three companies that dominated the bulb industry — all backed the 2007 rule, while opposing proposals to explicitly outlaw incandescent technology (thus leaving the door open for high-efficiency incandescents).

This wasn't a case of an industry getting on board with an inevitable regulation in order to tweak it. The lighting industry was the main reason the legislation was moving. As the New York Times reported in 2011, “Philips formed a coalition with environmental groups including the Natural Resources Defense Council to push for higher standards.”

Industry support for the regulations struck lawmakers and journalists as a ringing endorsement of the regulations. Republican Congressmen Fred Upton, who has since flip-flopped and attacked the regulations, cosponsored the light bulb provision in 2007. His excuse, according to conservatives I spoke to: It couldn't be that bad if the industry supported it.

Liberals used this very argument to ridicule Republicans' 2011 efforts to repeal the law. Democratic congressman Steny Hoyer defended the rule by saying, “The standards are supported by the lightbulb industry.”

Joe Romm at the Center for American Progress pinned repeal efforts on the “extremist Tea Party wing of the party, which opposes all government standards, even ones that the lightbulb industry itself wants.”
That “even” signifies that the industry’s support indicates consensus. Instead, it signifies how consumers lose.

Competitive markets with low costs of entry have a characteristic that consumers love and businesses lament: very low profit margins. GE, Philips and Sylvania dominated the U.S. market in incandescents, but they couldn’t convert that dominance into price hikes. Because of light bulb’s low material and manufacturing costs, any big climb in prices would have invited new competitors to undercut the giants — and that new competitor would probably have won a distribution deal with Wal-Mart.

So, simply the threat of competition kept profit margins low on the traditional light bulb — that's the magic of capitalism. GE and Sylvania searched for higher profits by improving the bulb — think of the GE Soft White bulb. These companies, with their giant research budgets, made advances with halogen, LED and fluorescent technologies, and even high-efficiency incandescents. They sold these bulbs at a much higher prices — but they couldn’t get many customers to buy them for those high prices. That's the hard part about capitalism — consumers, not manufacturers, get to demand what something is worth.

Capitalism ruining their party, the bulb-makers turned to government. Philips teamed up with NRDC. GE leaned on its huge lobbying army — the largest in the nation — and soon they were able to ban the low-profit-margin bulbs.

The high-tech, high-cost, high-margin bulbs have advantages: They live longer and use much less electricity. In the long run, this can save people money. But depending on your circumstances, these gains might be mitigated or eradicated.

The current replacement for traditional bulbs are compact fluorescents (those curly bulbs). They give off UV rays, contain mercury gas, take a while to get bright and don’t last any longer than regular bulbs if you flip them on and off a lot.

Newer technologies, like LED bulbs, are better than CFLs, and they supposedly last 20 years. But they cost even more. In your office building, they probably make sense. In your house? Well they won't last two decades in a house full of kids who wrestle with the dog and throw footballs around the living room (maybe Congress should ban domestic wrestling and passing).

There is a middle ground between everyone using traditional bulbs and traditional bulbs being illegal. It's called free choice: Let people choose if they want more efficient and expensive bulbs. Maybe they'll chose LEDs for some purposes and cheap bulbs for others.

But consumer choice is no good either for nanny-staters or companies seeking high profit margins.

Technologies often run the course from breakthrough innovation to obsolete. Think of the 8-track, the Model T or Kodachrome film. But the market didn’t kill the traditional light bulb. Government did it, at the request of big business.

Timothy P. Carney, The Washington Examiner's senior political columnist, can be contacted at tcarney@washingtonexaminer.com His column appears Sunday and Wednesday on washingtonexaminer.com.


A lot more on the industrial policy behind the banning of light bulbs in the USA, Europe and elsewhere: http://ceolas.net/#li1ax
Specifically in an American context, also the "I Light Bulb" eBook by M.P. Leahy and Howard Brandston.
Howard Brandston, a well known New York lighting designer, was involved from the start in recurrent Senate hearings, and has covered the strange workings of the NEMA sub-committee (Philips, GE, Osram/Sylvania) in seeking the USA 2007 ban and indeed in their seeking to uphold it through 2011 (and no doubt 2014) reviews and bill attempts at tightening legislation further. His specific webpage and campaign against the regulations: http://www.concerninglight.com/commentary.html

The major manufacturers not unnaturally want to sell more profitable patented expensive alternative bulbs, and feel that any obstruction would be reneging on "promises" by politicians to smooth the way for them through initial consultation and legislation as per 2007 US law, 2008 Canada law, or 2009 Australia and EU laws.
Philips, GE, Osram/Sylvania cooperated to ensure incandescents did not have more than 1000 hour lifespan (the Phoebus cartel) and then cooperated to get rid of them altogether. Slam-Dunk.

Paul Wheaton

Note the irony:
Any outsider would of course consider it unusual that manufacturers would voluntarily seek to legally limit what they are allowed to make, and to welcome such laws once they are made.
The manufacturers are therefore repeatedly lauded by perennially clueless journalists for their "great green conscience", and of course happily strengthen such an image in their press releases.

Somewhat more perceptive observers remark that the manufacturers could have voluntarily stopped making the bulbs, just like they stop making much else in the name of progress - but that would therefore have allowed small and new and local manufacturers to happily and profitably make the patent expired generic cheap bulbs, without global distributive overheads or commitments to expensive alternatives.

In turn misunderstanding the process, "progressive green" people claim that legislation was necessary or the manufacturers would "never" have stopped making the old bulbs.
Apart from ignoring that incandescent lighting might have light quality and other advantages beyond crass economic or energy use reasoning (and the supposed savings not being there anyway as per other argumentation), this ignores what "progress" is: and it is hardly expensively imitative replacement clones of incandescent bulbs.
Increased - not reduced - competition drives progress, and it is conveniently forgotten that CFLs and LED bulbs were invented in the presence - not the absence - of incandescent competition, moreover that new inventions can always be helped to market albeit without continuing subsidies, allowing the best alternatives to flourish, with "expensive to buy but cheap in the long run" advantages highlighted by imaginative advertising, as is done for other products.

Overall it is of course odd to ban popular safe products just to reduce electricity consumption.
There are plenty of ways to reduce say coal use or emission or electricity, whether by legislation or taxation, and plenty of informative possibilities to say encourage lighting to be switched off rather than to ban a particular choice of it.

There is nothing but idiocy behind this banning of light bulbs.

How Regulations are Wrongly Justified
14 points, referenced:
Includes why the overall society savings aren't there, and even if they were, why alternative policies are better, including alternative policies that target light bulbs.


Lichtliebhaber said...

I love the sentence from the article "Lights Out For America’s Favorite Light Bulb".

"The ban is crony capitalism in its most seductive form — when it’s disguised as green."

It describes the present form of capitalism very well.

Anonymous said...

I agree with this article. "They're" telling me that the heat created by using incandescent lightbulbs is bad for the environment, yet tell me of a "new", "green" way to make our own ambient heat source using rocks and candles. Yeah, set them up around the house, "they" tell me! The way I see it, you took away MY ambient heat source when you made 40 and 60 watt incandescent lightbulbs illegal! And who is "they", anyway? I did not get to vote on this. The way you vote out here on the streets: your pocketbook. Free-marketcapitalism is not a dirty word; it's effective, where the cream usually rises to the top, and it's not to be messed with too much by environmentalist whacko views of current dumbocrats in power. "Green" is not my religion, and you won't make my religion by force.