National chooses not to rule ‘by decree’
Posted December 2, 2008on:
It looks like National has decided not to continue with the previous government’s plans to introduce a standard for lightbulb efficiency. They say
We want to encourage people to [switch], we think there may be benefits for them to do it, but it should be a choice they make as consumers.
It’s a good point: efficient CFL bulbs are tough to dim, take time to reach full brightness and don’t bring out the sparkle in chandeliers, apparently. So why would we want to force everyone to use them when they’re clearly not suited to some applications? Of course, if people did use them in their homes and offices, where they are suitable, it would be great for reducing our national power consumption.
What we really need is a solution which encourages people who don’t really need the current incandescent bulbs to switch, but allows those who truly benefit from incandescent bulbs to keep using them. An efficiency standard is too crude a tool to allow that to happen. However, if we could price power at its true marginal social cost, then people would make efficient decisions of their own accord. That is the beauty of carbon taxes/cap-and-trade schemes: we no longer need to worry about fine-grained regulation of things like lightbulbs, because the price signals sent by our emissions regulation will sort those things out for us.
Sadly, it seems that the implementation of such a carbon pricing scheme is now some way off. So, what options might the government have for getting people to switch without reducing their choices ‘by decree’? One such option, that works extraordinarily well, would be to change the default lightbulbs that you receive with goods. For goods that include bulbs, or for fitting out new houses, make the default option a CFL bulb, rather than an incandescent bulb. While it doesn’t change peoples’ choice set – they can still use an incandescent bulb if they prefer – it would give people exposure to the efficient bulbs, and it would switch indifferent consumers to the more energy efficient model.
Can anyone think of other options National might have gone with that don’t amount to ruling ‘by decree’?
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