Menus Subscribe Search

Follow us


lightbulb-efficiency

(PHOTO: JEZPER/SHUTTERSTOCK)

Energy Efficiency: Now Free to Consumers

• July 31, 2013 • 5:56 PM

(PHOTO: JEZPER/SHUTTERSTOCK)

The government is really bad at guessing how much extra we’ll pay to make appliances energy efficient. That’s awesome!

Mandated product improvements for the public good, say seat belts or better mileage for cars, often get shot down, or at least shot at, because of their presumed cost. Apart from the Libertarian impulse, these are usually delaying actions thrown up by industries reluctant to spring for things that won’t give them a competitive advantage but will eat into their profit (or foist higher prices onto consumers).

So it’s a little bit of good news to know that improved energy efficiency in appliances, mandated nationally in the United States at least since 1987, is coming in cheaper than predicted—as it always has. That’s the verdict of a new report from two interested observers, the American Council for an Energy-Efficient Economy and the Appliance Standards Awareness Project. Since the White House is pushing for even greater efficiency as part of President Obama’s Climate Action Plan, the findings should make at least part of that plan easier to swallow for those who hate to be ordered to eat their vegetables.

Last summer Brookings Institution economist Ted Gayer and Vanderbilt law professor W. Kip Viscusi blasted the federal government (PDF) for “overriding consumer preferences” with efficiency mandates that assume people are irrational:

The impetus for the new wave of energy-efficiency regulations has little to do with externalities. Instead, the regulations are based on an assumption that government choices better reflect the preferences of consumers and firms than the choices consumers and firms would make themselves. In the absence of these claimed private benefits of the regulation, the costs to society dwarf the estimated benefits.

The White House puts a different shine on this particular plate of broccoli, even as it heaps on some peas:

In President Obama’s first term, the Department of Energy established new minimum efficiency standards for dishwashers, refrigerators, and many other products. Through 2030, these standards will cut consumers’ electricity bills by hundreds of billions of dollars and save enough electricity to power more than 85 million homes for two years. To build on this success, the Administration is setting a new goal: Efficiency standards for appliances and federal buildings set in the first and second terms combined will reduce carbon pollution by at least 3 billion metric tons cumulatively by 2030 – equivalent to nearly one-half of the carbon pollution from the entire U.S. energy sector for one year – while continuing to cut families’ energy bills.

Oddly enough, efficiency standards for white goods—quite unlike vehicle mileage standards—had traditionally been accepted as pretty benign. Perhaps that’s because they always come in cheaper than expected….

The source of the original estimates on the high side was the U.S. Department of Energy, which is tasked by law with figuring out how much extra the new rules will cost during the rule-making process. Between 2000 and 2010, the period covered by this report, in every case the manufacturers’ selling prices came in under the estimate, “generally substantially so.” (The manufacturers’ selling price is not the same as the retail price.) Moreover, this is the same pattern observed in prior years in studies by the Lawrence Berkley National Lab and the efficiency council.

Looking at products ranging from refrigerators and electric water heaters to commercial air conditioners and lighting ballasts, on average a manufacturer’s price dropped $12 on the new item instead of rising the DOE-predicted $148. (Using the median, as opposed to the average, took away any savings but still produced a price rise of only nine percent of the predicted amount.)

Before mandating zero energy use in hopes that the resulting products will be free, there are some non-standards-related reasons likely at play. For example, appliance prices have been falling steadily for almost half a century. The report authors note that their remit didn’t include looking at different kinds of efficiencies—say in manufacturing or outsourced labor costs—but they speculate that innovation likely arises as products and production lines are redesigned, and manufacturers find ways to shave costs in what are generally pretty staid items.

The report recommends that the Department of Energy analyze what went awry in its past analyses and learn from experience for future or delayed standards, or perhaps provide a range of possible costs. But what would be their incentive? It wasn’t by design, but the current plan—of surprising customers with good price news, even as they do right by the environment—seems to be working just fine.

Michael Todd
Most of Michael Todd's career has been spent in newspaper journalism, ranging from papers in the Marshall Islands to tiny California farming communities. Before joining the publishing arm of the Miller-McCune Center, he was managing editor of the national magazine Hispanic Business.

More From Michael Todd

A weekly roundup of the best of Pacific Standard and PSmag.com, delivered straight to your inbox.

Recent Posts

October 24 • 4:00 PM

We Need to Normalize Drug Use in Our Society

After the disastrous misconceptions of the 20th century, we’re returning to the idea that drugs are an ordinary part of life experience and no more cause addiction than do other behaviors. This is rational and welcome.


October 24 • 2:00 PM

A Letter to the Next Attorney General: Fix Presidential Pardons

More than two years ago, a series showed that white applicants were far more likely to receive clemency than comparable applicants who were black. Since then, the government has spent hundreds of thousands of dollars on a study, but the pardons system remains unchanged.


October 24 • 12:00 PM

What Makes You So Smart, Middle School Math Teacher?

Noah Davis talks to Vern Williams about what makes middle school—yes, middle school—so great.


October 24 • 10:00 AM

Why DNA Is One of Humanity’s Greatest Inventions

How we’ve co-opted our genetic material to change our world.


October 24 • 8:00 AM

What Do Clowns Think of Clowns?

Three major players weigh in on the current state of the clown.


October 24 • 7:13 AM

There Is No Surge in Illegal Immigration

The overall rate of illegal immigration has actually decreased significantly in the last 10 years. The time is ripe for immigration reform.


October 24 • 6:15 AM

Politicians Really Aren’t Better Decision Makers

Politicians took part in a classic choice experiment but failed to do better than the rest of us.


October 24 • 5:00 AM

Why We Gossip: It’s Really All About Ourselves

New research from the Netherlands finds stories we hear about others help us determine how we’re doing.


October 24 • 2:00 AM

Congratulations, Your City Is Dying!

Don’t take population numbers at face value.


October 23 • 4:00 PM

Of Course Marijuana Addiction Exists

The polarized legalization debate leads to exaggerated claims and denials about pot’s potential harms. The truth lies somewhere in between.


October 23 • 2:00 PM

American Companies Are Getting Way Too Cozy With the National Security Agency

Newly released documents describe “contractual relationships” between the NSA and U.S. companies, as well as undercover operatives.


October 23 • 12:00 PM

The Man Who’s Quantifying New York City

Noah Davis talks to the proprietor of I Quant NY. His methodology: a little something called “addition.”


October 23 • 11:02 AM

Earliest High-Altitude Settlements Found in Peru

Discovery suggests humans adapted to high altitude faster than previously thought.


October 23 • 10:00 AM

The Psychology of Bribery and Corruption

An FBI agent offered up confidential information about a political operative’s enemy in exchange for cash—and they both got caught. What were they thinking?


October 23 • 8:00 AM

Ebola News Gives Me a Guilty Thrill. Am I Crazy?

What it means to feel a little excited about the prospect of a horrific event.


October 23 • 7:04 AM

Why Don’t Men Read Romance Novels?

A lot of men just don’t read fiction, and if they do, structural misogyny drives them away from the genre.


October 23 • 6:00 AM

Why Do Americans Pray?

It depends on how you ask.


October 23 • 4:00 AM

Musicians Are Better Multitaskers

New research from Canada finds trained musicians more efficiently switch from one mental task to another.


October 22 • 4:00 PM

The Last Thing the Women’s Movement Needs Is a Heroic Male Takeover

Is the United Nations’ #HeForShe campaign helping feminism?


October 22 • 2:00 PM

Turning Public Education Into Private Profits

Baker Mitchell is a politically connected North Carolina businessman who celebrates the power of the free market. Every year, millions of public education dollars flow through Mitchell’s chain of four non-profit charter schools to for-profit companies he controls.


October 22 • 12:00 PM

Will the End of a Tax Loophole Kill Off Irish Business and Force Google and Apple to Pay Up?

U.S. technology giants have constructed international offices in Dublin in order to take advantage of favorable tax policies that are now changing. But Ireland might have enough other draws to keep them there even when costs climb.


October 22 • 10:00 AM

Veterans in the Ivory Tower

Why there aren’t enough veterans at America’s top schools—and what some people are trying to do to change that.


October 22 • 8:00 AM

Our Language Prejudices Don’t Make No Sense

We should embrace the fact that there’s no single recipe for English. Making fun of people for replacing “ask” with “aks,” or for frequently using double negatives just makes you look like the unsophisticated one.


October 22 • 7:04 AM

My Politicians Are Better Looking Than Yours

A new study finds we judge the cover by the book—or at least the party.


October 22 • 6:00 AM

How We Form Our Routines

Whether it’s a morning cup of coffee or a glass of warm milk before bed, we all have our habitual processions. The way they become engrained, though, varies from person to person.


Follow us


Politicians Really Aren’t Better Decision Makers

Politicians took part in a classic choice experiment but failed to do better than the rest of us.

Earliest High-Altitude Settlements Found in Peru

Discovery suggests humans adapted to high altitude faster than previously thought.

My Politicians Are Better Looking Than Yours

A new study finds we judge the cover by the book—or at least the party.

That Cigarette Would Make a Great Water Filter

Clean out the ashtray, add some aluminum oxide, and you've (almost) got yourself a low-cost way to remove arsenic from drinking water.

Love and Hate in Israel and Palestine

Psychologists find that parties to a conflict think they're motivated by love while their enemies are motivated by hate.

The Big One

One company, Amazon, controls 67 percent of the e-book market in the United States—down from 90 percent five years ago. September/October 2014 new-big-one-5

Copyright © 2014 by Pacific Standard and The Miller-McCune Center for Research, Media, and Public Policy. All Rights Reserved.