Filed under: Interventions in the carbon/climate crisis
My friend Jonathan Rauch — who is undoubtedly one of the best columnists I know — hits what seems to me a rare wrong note in his current column in the National Journal (link subject to rot after a week or so, I think). Riffing off the incandescent light bulbs issue, he moves on to the “don’t regulate, just price carbon” argument. His case against compact fluorescents is that he, and many other consumers, doesn’t find them to be very good, and that the energy savings they make possible will be eaten up by the Jevons (or “rebound”) effect:
Is this a smart way to save some energy? Or, rather, an example of ham-handed environmental grandstanding?
Europhobia aside, there is a case for the phaseout. Incandescents are famously wasteful, emitting much more heat than light. Though cheap to buy, they are expensive to run… Moreover, lightbulbs are low-hanging fruit on the conservation tree. Unlike, say, an air conditioner or a furnace, they are quick and easy to replace. Savings flow instantly. Compact fluorescents may be imperfect, but the new mandate will drive down their prices while stimulating technological advances. Everybody wins.
That case has its points. Nonetheless, I’m going to vote for No. 2: ham-handed environmental grandstanding.
It is true that consumers can and often do undervalue energy efficiency…but replacing your incandescent bulbs with fluorescents is not the same as replacing your low-efficiency refrigerator with a high-efficiency one. As someone who has recently made a good-faith effort to switch, I can tell you that fluorescents deserve their not-ready-for-prime-time reputation…The compact fluorescent lamp, at least in its currently commonplace incarnations, is a lousy product. Consumers who reject it are not necessarily numskulls. Many if not most are exercising a very understandable preference…
The incandescent phaseout is saying: Never mind that you might be willing to raise your summertime thermostat a notch or two in exchange for keeping incandescent bulbs; you still can’t have them. Never mind that your house is full of other potential energy savings; it’s CFLs for you…
Then there is the problem of what Jerry Taylor, an energy analyst at the Cato Institute, calls the rebound effect. Downsizing cars makes driving cheaper, so people do more of it, offsetting some of the gains. Similarly, fluorescents make keeping the lights on cheaper, with the same likely effect.
The Competitive Enterprise Institute’s Sam Kazman notes that in the 1980s a town in Iowa gave out 18,000 free fluorescents in an effort to conserve electricity. “Despite the fact that over half of the town’s households participated, electricity use actually rose by 8 percent. Once people realized they could keep their lights on at lower cost, they kept them on longer.” Having told the public that compact fluorescents cost practically nothing to run and last practically forever, how could we expect people not to leave them on? (I know I do.)
In his fair minded way, Jon points to the strongest arguments on the other side, but I don’t think he gives them sufficient weight. In particular, as he says, the new marketplace is one where we can expect a great deal of competition in terms of better, cheaper and yet more efficient products. It seems to me that this is a really powerful point. With enlightened regulation, governments around the world (and it is important that this is happening in a synchronised way) are forcing innovation into a market where the low price and economies of scale of the previous incumbent technology made the barriers to entry very high. As John points out, if you don’t care much about energy costs, incandescents are a pretty good technology, which is why, as he also notes, compact fluorescents sat around for a long time not getting much better. Now we can foresee a creative free-for-all that will permit a range of new technologies to compete, and to change the manner in which things are lit more profoundly. As my former colleague Stefano Tonzani noted in a feature in Nature (subscribers only, I think)
The general-purpose incandescent light bulb might not be replaced by a single new source, but by a range of technologies, each suited to a particular use. For example, if organic light emitting diode (OLED) lighting can economically be produced in continuous sheets by industrial roll-to-roll techniques, it will be a natural candidate for flat panels that generate a diffuse glow for area lighting. That would make OLEDs a natural complement to the bright, directional light coming from semiconductor LEDs, which could instead be used for more light-intensive tasks such as reading. Such combinations could lead to new concepts of lighting design, so that architects could help save energy by not wasting light where it is not needed.
It is true that by banning incandescents governments are imposing a cost on current consumers who, like Jon, don’t like fluorescents. But for that one-time cost they are bringing into being a more permissive technological state of play with the potential for far more efficient and better products down the line. (Though I’ll admit, in my turn, that the lower turnover of light bulbs in the post-incandescent era will slow this process down, with people locked into the intermediate CFL technology in a way they haven’t been locked into the often-blowing incandescent technology. Unless, that is, they just throw out old fluorescents, which defeats part of the purpose.) This opening up of innovation seems, on balance, a good way to use regulation.
The way that regulation can change contexts bears on Jon’s more general point that the best thing to do is to simply price carbon, rather than also regulate some activities and piurchase choices that lead to carbon emissions. This seems to ignore the degree to which consumption takes place in a complex system defined, in parts, by regulatory frameworks. There are all sorts of things that make it hard or easy to emit carbon that pricing carbon, in and of itself, doesn’t effect very much, but on which regulations and other government decisions have a huge impact. It is possible, and laudably nifty, to find ways to put new low emissions technology straight into existing systems, for example by making roof shingles that work just as roof shingles always have, but also generate solar electricity. In general, though, changing the price of carbon without changing the system in which people live on its own is going to be a suboptimal strategy. Matt Yglesias was making this point recently while writing about Stockholm buses:
A decision to take the bus is heavily influenced by someone’s decision about where to put the bus stops, where to make the routes go, how frequently to run the buses. [It] is also influenced by the relative paucity of parking spaces in the city, which in turn relates to public policy decisions about minimum parking regulations, maximum allowable density and so forth. …Nobody drives on freeways that weren’t built any more than anyone rides subways that don’t exist.
Whether or not putting a solar panel on your roof makes economic sense depends in part on whether you can sell energy to the grid during surplus periods … Whether or not it makes sense to build a huge wind warm in Kansas depends on whether you have a grid robust enough to transmit that energy to population centers.
We also have regulatory issues limiting our ability to innovate…Multi-family structures are more efficient to heat than are detached houses (it’s a surface area to volume thing) but in many places it’s illegal to build a multi-family structure. So if what you want to do is leave this up to the market, you need to take active legislative steps, not just impose a price and say we’ll let the chips fall where they may.
Nick Stern argues, in a manner that might be seen as fence-sitting but which I find convincing, that carbon markets, carbon taxes and regulations all have roles to play in emissions reduction. Carbon taxes work on transport fuel, for example, in a way that cap-and-trade would not. At the same time, people in Europe don’t think it odd to have fuel taxes as well as regulations on efficiency; the situation reflects, among other things, the fact that fuel taxes high enough to force large efficiency improvements across the whole fleet would prove politically unpalatable. And this seems to me to be a key point. If you insist on thinking that the best thing to do is just to price carbon, even within a system not set up to help people cope with that pricing — if you think that using just the price tool, rather than all the tools, is in principle a superior approach — you have to face the fact that in some cases, for some types of emission, a price that makes a real dent in emissions is not going to be politically feasible. This is the territory on which Boxer-Kerry, and all such attempts to impose prices, will be fought. If a carbon price causes real pain to big significant lobbies it becomes very hard to set. Unless you can solve that, gains made through regulations seem a reasonable path.
As to the Jevons effect: yes, but… Yes, efficiency gains tend to spur consumption, to a degree that is often ignored, and this means efficiency does not represent the cornucopia of low-hanging fruit that it is sometimes suggested to be. But as Jon honestly points out, this effect does not necessarily eat up all the efficiency gains. What’s more, there is a time lag between the efficiency gain and the increase in use, and that time lag represents real saving. There is also the point (systems thinking again) that in the presence of energy taxes or other complementary interventions we might expect the size of the effect to be diminished (another reason why we have both efficiency standards and fuel taxes).
And we should not forget that it is possible to saturate the effect, at least in specific modalities. If I keep my house well insulated, efficient-boilered house warm enough to suit me, I will be emitting less carbon than I did when it was less well insulated and the boiler less efficient (this is a hypothetical example: I hope to make it a real one in the next year or so). And once things are efficient, I am unlikely to turn the house into a sauna just because I can. Similarly, I can look forward to a time when I will have a range of devices in my house that allow me any level of illumination up to that of bright daylight and down to that of dim moody glow in any room, with keylights and fills and bounces and spots and so on allowing me to compose my my experience like my own director of photography — and the whole thing will still consume less energy than having a bunch of incandescent bulbs doing a less good job. Of course, the money I save may be used on some completely different sort of consumption. But the more that is done to make consumption of all sorts more efficient, the less that worries me.
I don’t discount the Jevons effect; it is real and powerful, and shows that efficiency alone is not enough. But within an overall system which is trying to make it sensible for people to use less energy while having better experiences in all sorts of ways, the effect can I think be diminished.
Image from Martin Acosta/Greenpeace, used in accord with these conditions.
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