Wednesday, January 12, 2011

Coble against sensible, bipartisan energy standards

The local News & Record reports that Congressman Howard Coble wants to repeal part of the bipartisan energy package that was signed by that old lefty, President Bush, in 2007.
U.S. Rep. Howard Coble is among those urging colleagues in Congress to turn off the lights on a controversial provision of the 2007 energy bill.

The Greensboro Republican is a co-sponsor of a bill to repeal what some refer to — erroneously — as the incandescent bulb ban. Texas Reps. Joe Barton and Michael Burgess and Marsha Blackburn of Tennessee, all Republicans, were the original sponsors of the repeal measure.
The part of the legislation in question raises the efficiency standards for light bulbs by 25 to 30 percent starting in 2012 and further in 2020. The new standards will lower utility bills for consumers, reduce electricity consumption, and reduce pollution, including greenhouse gas emissions.

Shortly after the legislation was enacted, the nonpartisan Congressional Research Service (CRS) estimated that energy-efficient replacements for the now-standard 100-watt incandescent bulb were substantially cheaper when evaluated over the lifetime of the bulb. Although the replacements have higher up-front costs, they cost less to operate and last longer than 100-watt incandescent bulbs. The CRS calculated that the extra up-front cost of an equivalent 70-watt Halogen light used five hours a day at an electricity cost of 10 cents per kilowatt hour would be recovered in four to seven months. A compact fluorescent light (CFL) bulb would recover its extra up-front cost in two to seven months. Thus, the new bulbs are cost-effective.

The bulbs also offer substantial environmental advantages. The CRS report states, "By one projection, the new standards will cumulatively save more than $40 billion on electricity costs and offset about 750 million metric tons of carbon emissions by the year 2030."

What then is the Congressman's objection? The N&R article quotes Rep. Coble as stating it "ought to be a personal decision rather than being an edict from on high."

There's a childish, spiteful "don't tell me what to do even if it's good for me" element to Coble's answer. You can imagine him throwing a similar tantrum when he's served his favorite tapioca pudding without being asked.

"But Howard, tapioca is your favorite."

"Not if you tell me that it is, dammit!"

Rep. Coble's tantrums aside, there is still the question of why a regulation would be needed in the first place if the energy efficient replacements are really such a good deal.

One answer is that consumers may not take the full personal costs and benefits of the bulbs into account when they make their purchases. Consumers see the up-front cost, which is tangible and tied directly to the purchase, but may overlook the operating costs, which will show up in future utility bills and never be tied directly to the bulb. This problem is especially likely to occur in small purchases, where people are more likely to rely on intuition and simple rules of thumb, than in larger purchases.

Another issue, raised by Richard Thaler and Cass Suntein, in their book, Nudge, is that there can be irrational inertia in human behavior. People tend to value losses more strongly than gains (loss aversion); they also exhibit "status quo bias," more readily choosing the old and familiar over the new and different. Again, these biases would lead people away from energy-efficient purchases.

Yet another issue is that to the extent that they do consider costs and benefits, people only consider the costs and benefits that they would personally face. The broader costs of pollution and energy dependence are externalities, which aren't considered in purchase decisions.

The regulation in this case is a relatively modest one. It sets a performance standard but does not dictate that a particular technology be adopted. There are several alternatives to current incandescent bulbs and technological improvements are likely to lead to even more alternatives, including incandescent alternatives. However, the regulation is likely to be very beneficial.

4 comments:

jhs said...

Dave: Good post. I agree completely. The savings you note from CRS make this good policy. Do we know how Coble voted on the original bill?

Dave Ribar said...

Jeff:

Rep. Coble voted against the original house bill (HR 6, vote 40) in January 2007. The Senate passed a substantially altered version in June.

The House made amendments to that version (eliminated some tax breaks for oil & gas companies and added some renewable energy standards); Rep. Coble also voted against that bill (vote 1140).

The Senate did not agree to the amendments; it amended the bill to strip out the House amendments. Coble voted in favor of this final bill (vote 1177).

Coble could be tagged as trying to have it both ways--he's now trying to repeal parts of a bill that he voted for.

My guess, however, is the Coble would argue that his final vote was a successful attempt to strip tax and renewable energy provisions from the bill.

Anonymous said...

Talk about gaming the public. How about socialist econ professors and their rectal cranium inversion when it comes to common sense on the environment ?

ANOTHER DUD FROM THE DIM-BULB GREENS

http://www.nationalreview.com/corner/259616/another-dud-dim-bulb-greens-steven-f-hayward

The incandescent light bulb ban is this decade's versionof the old 55 m.p.h. speed limit, and sooner or laterCongress needs to be pressed into repealing this idiocy...........

Read The Whole Thing

Ready Kilowatt

Dave Ribar said...

RK:

The command to "read the whole thing" speaks volumes about your inconsistent mindset.

Yes, I do expect that a selfish, childish subset of the American public will chafe under the sensible, phased-in prohibitions against wasteful and dirty energy consumption, much as they did against the phase-out of leaded gas and the 55 MPH speed limit.

Opponents of the speed limit, however, neglect to mention that the policy was a net money saver. When the costs in terms of lost time and greater enforcement effort were compared to the benefits in terms of fuel savings, accident costs, vehicle wear, and productivity, the policy had a net benefit of approximately $.8 to $1.1 billion per year toward the end of the policy.

These benefits do not include any value for the lives saved, which were estimated to be 2,000 to 4,000 per year.

Rational calculations support lower speed limits and the prohibition on wasteful lighting.

There are more efficient policies to achieve these ends, such as user fees for roads and pollution taxes, but the childish, selfish set doesn't go for these either.

Instead, the cranky "you kids get off my lawn" set demands the right to piss on everyone else's lawn.