Wasting Energy on Energy Efficiency

Article excerpt

Few aspects of our daily lives are more heavily regulated by the federal government than our use of energy. The cars and trucks we drive, the structures in which we live and work, and virtually every major appliance we use has been transformed by Washington's near obsession with energy efficiency. Chances are, if it runs on electricity, gasoline, natural gas, heating oil, or any other energy source, it has been substantially affected by federal laws and regulations.

The energy efficiency crusade was originally launched in the 1970s as part of the solution to the so-called energy crisis. Washington was convinced that world oil supplies were rapidly dwindling and that drastic energy conservation measures were needed. As a result, Congress enacted several laws for the purpose of reducing energy consumption. Some statutes set energy-use standards, be it miles per gallon for motor vehicles or kilowatt hours per year for refrigerators. These laws not only set initial standards but gave the implementing agencies (Department of Energy [DOE] for most appliances, National Highway Traffic Safety Administration [NHTSA] for motor vehicles) the authority to periodically tighten them without going back to Congress for approval. Several laws also created tax incentives or other inducements for individuals and businesses to reduce energy use beyond the level they would achieve on their own.

A Second Ill Wind

The energy crisis has long since faded away. The "experts" could not have been more wrong-oil supplies are so plentiful today that the price has reached a 25-year low. Nonetheless, the efficiency agenda lives on. These same statutes and regulations, and the army of bureaucrats and activists that make their living from them, are experiencing their second wind as one of the putative solutions to global warming. If consumers can be made to use less energy, the argument goes, then less carbon dioxide, the chief anthropogenic greenhouse gas, will be emitted into the atmosphere.

Last November, when the Clinton administration signed the Kyoto Protocol, the international agreement to reduce emissions of greenhouse gases, Stuart Eizenstat, undersecretary of state for economic, business, and agricultural affairs, emphasized the role energy efficiency will play in its implementation. He announced new funding for research into more efficient automobiles and housing, and an effort to "begin setting new energy efficiency standards for major appliances." Indeed, until the Kyoto Protocol is submitted to a skeptical Senate for approval, these already existing energy-efficiency statutes are among the few tools the Clinton administration can legally use to combat energy use.

Before the nation embarks on new rounds of tougher efficiency standards for everything from washing machines to light bulbs to SUVs, it is worth examining what the first wave of such centrally planned austerity measures has done for us. Despite the positive publicity accorded measures enacted in the name of energy efficiency, they have accomplished nothing. However, they have raised the cost and reduced the quality of affected products, and have created or exacerbated several health and safety problems.

An Ineffective Solution

Even assuming the global warming crisis is not as spurious as the energy crisis (but see Jonathan Adler, "Global Warming: Hot Problem or Hot Air?" in The Freeman, April 1998) and that substantial environmental benefits will accrue from reduced energy use, there still are serious limitations on how much can be achieved through federally mandated energy efficiency measures. True, if consumers use less energy, then less carbon dioxide will be emitted into the atmosphere, either directly in the case of motor vehicles or fuelburning appliances, or indirectly in the case of electrical appliances whose energy is generated through fossil-fuel combustion by utilities. But 25 years of energy efficiency measures have failed to stem the increases in national energy use. …