Center for Property Rights

Newsmax: New Federal Lamp S⁠t⁠andards ⁠t⁠o Cos⁠t⁠ $90M, Close Fac⁠t⁠or⁠i⁠es

By: The James Madison Institute / 2014

By Cheryl K. Chumley

The Department of Energy has come up with a new set of proposed regulations for household lamps that its own researchers estimate could cost the lighting industry more than $90 million and eliminate jobs as factories are forced to close.The new energy conservation standards apply to general service fluorescent lamps (GSFLs) and incandescent reflector lamps (IRLs), and, if ultimately approved, would go into effect within three years.GSFLs include the fluorescent tube lamps used in many offices. IRLs are the cone-shape bulbs typically used in track lighting and recessed light fixtures.The regulations basically mandate new minimum lumen output levels per watt of a lamp, and compliance, the agency admits, will force businesses to develop technologies that will prove a significant cost burden.The action follows the Department of Energy’s (DOE) recent attempt to ban the manufacture of incandescent light bulbs, which failed only after Congress added a measure to the budget preventing the department from spending any money to enforce the tougher efficiency standards.The DOE estimates that complying with the new GSFL standard could cost manufacturers nearly $40 million, and another $52 million for the IRL standard.But at least the GSFL producers aren’t projected to lose any jobs. The IRL manufacturers aren’t so lucky.”Manufacturers of IRLs stated in interviews with DOE that there is the potential for IRL manufacturers to close existing U.S. manufacturing plants, or for a potential loss of domestic IRL manufacturing employment based on the energy conservation standards proposed for IRLs,” the text of the proposed rule posted on the Federal Register said.”Increasing the efficacy of IRLs would cost manufacturers millions in capital conversion costs. Some stated that they do not have the technology to meet the proposed energy conservation standards and said it is possible they would not spend their limited resources to convert all IRL production.”The Energy Department also said that IRL manufacturers “are concerned that higher prices for IRLs will drive consumers to alternate technologies and it may not make economic sense for them to continue to produce IRLs.”Ultimately, the high costs associated with increasing the efficacy of IRLs could cause some IRL manufacturers to exit the market.”The touted benefits, meanwhile, include significant energy conservation and carbon-dioxide reductions. The new GSFL standards are projected to reduce carbon dioxide and methane emission levels around the nation by about 170 million metric tons and 730 thousand tons, respectively. And for both GSFLs and IRLs, the new standards could bring similarly dramatic emission reduction numbers for several types of declared pollutants through the year 2030.But Bob McClure, James Madison Institute president and CEO, said the costs of such regulations rarely prove justified.”Protecting Americans’ health and safety is an admirable goal. However, in doing so one would hope that the proper studies are conducted and true science-backed solutions are proposed, especially when it comes to issues affecting the American pocketbook,” McClure told Newsmax.”It’s important to understand that many times, these kinds of regulations have unintended consequences that result in negative impacts. The reality is, these proposed regulations will drive up the cost of doing business substantially and those costs will simply be passed on to the consumer,” McClure said.McClure said the free market, rather than government regulation, should be the determinate for products.”If the market can’t sustain a product that the government, through the regulatory process, forces consumers and businesses to use, it won’t result in any of the improvements they were seeking in the first place,” McClure said.”The government shouldn’t limit consumer choice. Instead, it should be looking for ways to create a pro-growth, entrepreneurial environment, and then the market will tell the government what kind of light bulb it needs.”Sam Kazman, general counsel for the Competitive Enterprise Institute and director of the Center of Law and Litigation, said the latest Energy Department regulations seem par for the course for federal agencies that are constantly on the lookout for more control and power.The regulations “seem to follow the same pattern of DOE’s previous energy efficiency mandates, for everything ranging from showerheads to laundry washers to incandescent bulbs — an admission that the items will cost more to purchase, but that the higher costs will pay for itself over some number of years through reduced energy costs, all with no reduction in how well they function,” Kazman told Newsmax.But that line of thought never pans out, Kazman said.”Time and time again, this has turned out to be nonsense,” Kazman said. “And we shouldn’t be surprised. If these new high-efficiency items are so great, then why does DOE need to force consumers to buy them? And if consumers are being forced to buy them, isn’t that a very strong indicator that they’re not so great after all?”Amy Ridenour, chairman of the National Center for Public Policy Research, said when Congress tried the same thing with household incandescent bulbs, consumers went into overdrive buying them before the proposed ban.”We had a lot of people hoarding them,” she told Newsmax. “The whole thing — it was just so stupid.”