Buying TVs and cars, Soviet-style

Two new regulations suggest that California leads the nation in mandates that inconvenience its residents while gaining little for the environment.

First, consider the California Energy Commission’s unanimous vote Wednesday to effectively ban most current televisions more than 40 inches wide because they use too much electricity. The new energy-efficiency rules are supported by Gov. Schwarzenegger, and Energy Commissioner Julia Levin claims consumers will save money.

Jay Aguas shops for a large, flat screen television at a Best Buy Store in Sacramento, Calif., Wednesday, Nov. 18, 2009. The California Energy Commission voted unanimously, Wednesday, adopting a first-in-the-nation mandate to require all new televisions, up to 58 inches, to be more energy efficient, beginning in 2011.

Currently, Californians have the choice of buying a smaller, more energy-efficient television set or limiting the hours they use their allegedly “energy-guzzling” TV. By taking away consumers’ options – making these choices for them – the Energy Commission is engaging in pure paternalism.

Suppose bureaucrats suddenly banned eating out at fancy restaurants, buying sports cars and yachts, and shopping at any apparel store besides Walmart. These measures also would save consumers money while ignoring the benefit of saving money, which is so that consumers can buy more of what they desire.

Other state regulators, this time the Air Resources Board, make similar arguments in defense of the new “cool car” regulations scheduled for 2012. Under these rules, car windows must be coated with microscopic specks of metal oxide in order to reflect sunlight. The new requirement would initially cost an estimated $111 over the life of the vehicle. California officials argue that the rules would eventually pay for themselves, because cooler cars need less air conditioning and, therefore, get better fuel economy.

Once again, we see state regulators deciding how consumers should spend their own money.

Defenders of the new measures say there is more than consumer choice at stake. Many scientists argue that electricity and gasoline consumption contribute to harmful climate change and that market prices do not currently reflect this harm. Yet here, the textbook response is for the government to augment market prices, either through a cap-and-trade system or through a straightforward tax on carbon.

The relative benefit of this direct route is that it avoids the absurdities and inefficiencies of central government planning. Rather than a group of fallible politicians and bureaucrats deciding how households should manage energy use, a simple carbon tax would tell households how much extra “harm” their activities are producing. Individuals could then decide how or whether to adjust their behavior.

A carbon penalty would translate into higher electricity prices, leading some households to purchase smaller TVs, install more efficient light bulbs, and so forth. A carbon penalty would also translate into higher gasoline prices, so that motorists could decide to drive less or buy more fuel-efficient cars.

Many economists oppose a government-mandated penalty on carbon emissions because the costs imposed on the economy might outweigh any benefits of reduced global warming. Other economists also worry that a political cap-and-trade scheme could be hijacked to serve special interests.

The important point is that even among economists who think the government should do something to stop global warming, most would consider California’s top-down regulations extremely inefficient. Such Soviet-style central planning is all the more counterproductive if implemented only at the state level, since many businesses will simply move their emissions (and jobs) elsewhere.

The two measures are beneficial only for regulators, who will feel good about themselves and imagine they are saving the planet. California’s new restrictions on flatscreen TVs and vehicle windows will hurt consumers, with almost nothing to show for the environment. When it comes to silly environmental regulation, no state can hold a light bulb to California.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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