Breaking Views

Light bulb ban is no bright idea

The EU kibosh on incandescent bulbs imposes substantial hidden costs on the economy.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)
By Martin Hutchinson, breakingviews.com

(breakingviews.com) -- The European Union's new ban on incandescent light bulbs violates simple economic principles and imposes substantial hidden costs on the economy. Fluorescent bulbs don't work as claimed and have considerable disposal problems. If the new bulbs were better, consumers would choose them naturally, and could be nudged to do so by a carbon tax.

The EU ban is an attempt to forward a policy goal -- combating global warming -- by statutory means. As such, it resembles the Corporate Average Fuel Economy restrictions, imposed on the U.S. automobile industry by Congress in 1975.

Such legislation imposes substantial costs on both consumers and the economy, but hides them so that legislators avoid blame. It often has perverse consequences; in the case of CAFE standards consumers switched to sport-utility vehicles, less fuel-efficient than comparable saloons but outside the scope of the initial law. The long-term cost of those standards arguably included a significant contribution to the bankruptcies of General Motors and Chrysler.

Such policy goals can better be met by explicit taxes, which are not fully dead-weights on the economy, but fund government and substitute for other taxes. They also impose clear costs on oil consumption or carbon emission, allowing consumers to make their own purchase decisions with those costs taken into account.

Compact fluorescent light bulbs' up-front cost, while higher than that of incandescent bulbs, is now low enough that if the claimed energy savings were real and inconveniences modest, rational consumers would switch.

However, CFLBs emit considerably less light than is claimed, and a substantial percentage burn out before their expected lifespan, somewhat offsetting the net cost saving from installing them. Moreover, consumers are heavily inconvenienced in their disposal, since they contain toxic mercury, which is illegal to discard in ordinary trash.

Had governments enforced truthfulness in claims of CFLBs' efficiency and lifespan, and provided convenient disposal mechanisms, many consumers would have switched voluntarily. Then the additional energy usage by the holdouts would have been modest and declining.

Forcing consumers to switch imposes arbitrary costs, especially on those who for health or other reasons want to remain with incandescent bulbs. It also violates market principles of consumer freedom of choice. To top of page

Company Price Change % Change
EMC Corp 28.01 -0.19 -0.67%
Merck & Co Inc 57.98 0.10 0.17%
KeyCorp 14.08 0.18 1.29%
Twenty-First Century... 34.87 -0.10 -0.29%
Comcast Corp 60.32 -0.10 -0.17%
Data as of Mar 5
Index Last Change % Change
Dow 18,135.72 38.82 0.21%
Nasdaq 4,982.81 15.67 0.32%
S&P 500 2,101.04 2.51 0.12%
Treasuries 2.19 0.08 3.84%
Data as of 9:13am ET
More Galleries
12 biggest tax scams to avoid There's no end to the creative ways scammers will try to steal your identity and your money. And tax time is one of their favorite times of the year. Here's how to spot a top scam and protect yourself. More
Public colleges with the best bang for your buck Graduates with bachelor's degrees from these state schools see the biggest return on their college investment, according to a report from PayScale. More
Cool cars from the 2015 Geneva Motor Show These are some of the stand-out cars and trucks on display at the 2015 Geneva Motor Show. More
Sponsors
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play