Monday, February 11, 2008

Contraband bulbs

Sen. Ethan Strimling, my neighbor and representative in the Maine senate, has proposed legislation that would ban most types of incandescent lightbulbs - the kind that Thomas Alva Edison invented 130 years ago - by 2010, as a way to hasten our transition to more efficient light sources. Here's a Portland Press Herald article on the subject.

I think this is a decent enough idea, although, as I'll soon explain, I also think that there are much more effective ways to deal with greenhouse gas pollution. But first, consider that if everyone in the whole state switched their lights to compact fluorescents, or even more efficient LEDs, ratepayers could save over $40 billion on electric bills every year, and we might reduce annual CO2 pollution by almost half a trillion pounds (source).

But at the same time, if I look at this from an economist's point of view, banning light bulbs begins to look like a clumsy and ineffective way to deal with global warming. The light bulbs are only an indirect cause of greenhouse gas emissions from fossil-fuel burning power plants: few people would quibble with an incandescent light hooked up to a solar panel. Besides that, General Electric claims that it's working on developing a super-efficient incandescent bulb that would be as efficient as a CFL - and, presumably, not have any toxic mercury inside, as CFLs do. If we ban incandescents, we'd block off this avenue of "green" research and development.

Sometimes it seems to me as though the old light bulbs are being used as a political scapegoat, while we fritter away more effective opportunities to deal with the global warming's root causes. It's noteworthy that the recently-passed 2007 federal energy bill, which was widely criticized for its political pandering and failure to support truly renewable energy, also included a goal of phasing out incandescents by 2020. It came off then as a whimpering assurance that our Congress was trying their best, even though we all knew that the effort was completely inadequate.

So, here's how I would improve Senator Strimling's bill: instead of banning a certain type of light bulb, let's harness the free market to promote energy efficiency everywhere. Here's one way we might do it: get rid of the sales tax on light bulbs, then replace it with a wattage tax.

Let's say we decide on a two cent-per-watt tax for bulbs. Then a 50 watt incandescent would cost an extra $1.00 to the consumer, while a 11 watt CFL, generating an equivalent amount of light, will only cost an extra $0.22 cents (plus a deposit). This would make most CFLs cheaper and more salable than their incandescent competitors on the shelf, which, in turn, would give General Electric and any other light bulb manufacturers a stronger incentive to produce more efficient bulbs, no matter what kind of technology they might use.

The state could take this idea even further by dedicating a portion of the tax revenues to weatherization programs for low-income households, to developing renewable power sources, or to promoting other forms of energy efficiency. This strategy is similar to the one public health advocates have taken with cigarettes: instead of banning them, tax them and use the proceeds for something useful.

Who knows, though - it might be a nightmare to administrate, with tax collectors poring over hardware stores' inventories to figure out the bill. But if they could figure out a way to make it work, it would give Mainers an elegant path to take towards better efficiency.

1 comment:

Brown said...

Interesting suggestion. From an economist's pov, you're talking about "internalizing externalities." That's something that ought to be considered for pretty much every environmental impact we generate. The key is pegging the differential high enough to adequately incent the purchase of cfs or LEDs over incandescents, while at the same time funding the additional cost of retrieving the cfs from the consumer before they hit a landfill.

Key to passage would be showing that the program pays for itself. Keeping GE's reputed high-efficiency incandescent on the table is a good thing, too.

Although that falls into the bucket of: what have they been waiting for? The answer to which is: only now do they see the future internalization (loss of market share and added tooling costs) of the externalities they created (crappy, inefficient light bulbs manufactured for cheap). Perhaps forcing them to clean their PCBs out of the Hudson had a nice spill-over after all.