People do strange things around Halloween. I swear – I usually do not walk into our house with 8 pounds of store-bought candy (Butterfingers and Heath Bars, of course). A couple days before Halloween, as I fumble around looking for our fake tombstones, I do something else unusual – I turn on the light in our basement.
If light bulbs were power plants, the bulb in our basement would be a peaker – used very rarely but providing high value when called on. In addition to its 10 minutes of use around Halloween, it gets another 10 minutes before Christmas as I run down to the basement to grab the tree stand while my kids and husband wait patiently with that year’s tree choice/victim on top of the car. Probably because it’s used so rarely, the bulb hasn’t burned out yet, so it’s one of the few incandescent light bulbs remaining in our house.
Seeing our trusty basement bulb reminded me of the news stories from a couple years ago about banning incandescent light bulbs. It made me wonder – are those bans really in effect? Should I preserve our basement specimen as some kind of energy-themed artifact?
The answer is not as straightforward as I anticipated. I started by doing a little empirical research and typed “incandescent light bulb” into Amazon’s search box. Lots of choices, and they’re still dirt cheap. So, no Antique Roadshow for our basement bulb – I can replace it for less than $1 online.
But, then what of all the news articles about the ban? Here’s where it gets interesting. In theory, the ban is in effect. In a nutshell, the Energy Independence and Security Act of 2007, which was signed by George W. Bush, set out a schedule that called for progressively tighter efficiency standards for light bulbs. Phase 1 called for slightly more efficient bulbs, which required about a 25 percent efficiency improvement for incandescent bulbs. It was phased in by bulb size, starting with 100-Watt bulbs in January 2012. For now, you can still buy a “halogen incandescent,” which I think surrounds the filament with a halogen gas instead of a vacuum. Phase 2, which is coming in 2020 (2018 for California), sets aggressive minimum lumens per watts, which is expected to outlaw all incandescents.
So – and this is not a completely rhetorical question – how is Amazon selling normal 100-Watt incandescent bulbs? I confirmed that I could in fact order them (Prime, even) and 4 are headed to my house today. My reading of the legalese is that it’s against the law to manufacture or sell these in the U.S., though not illegal to buy them. The law allowed sellers to get rid of their existing stock, but the ban on 100-Watts has been in effect for almost 4 years, so it seems unlikely that Amazon’s sellers are still depleting their stock.
While there are a number of loopholes for the incandescent ban (e.g., for bug lamps or decorative bulbs), I don’t think the bulbs for sale on Amazon’s site fall into any of them. And, as a contact at the California Energy Commission pointed out, some of the comments on Amazon questioned why the bulbs are marked, “Do Not Sell or Use in the U.S.”
The best answer that I can find is that members of Congress opposed to the ban have prohibited the DOE from spending money to enforce it. So, maybe what Amazon is doing is technically illegal, but won’t be enforced. I should also note that all the examples I’ve seen are “sold by” someone else and “fulfilled by” Amazon. But, I would be unlikely to find these other retailers except through Amazon.
I have two reactions to Amazon’s scheme – one as a citizen of the U.S. and one as an economist. As a citizen of the U.S., I’m disheartened by the idea that we have a recent, bipartisan law on our books that is flagrantly violated. This isn’t some back-alley side deal. This is Amazon – the earth’s biggest retailer.
As an economist, I am also disheartened, but for a slightly more nuanced reason. Economists generally view standards to be poor substitutes for more direct regulations, like pollution taxes. One of the main motivations behind efficiency standards for light bulbs is to reduce the pollution created when electricity is generated to power the light bulbs. But, economists point out that it’s better to just tax the pollution coming out of the power plants. Because it’s such a blunt instrument, the standard is worse than the tax. Consider our basement bulb – it’s on for so few hours that its use emits very little pollution. So, forcing us to spend a couple dollars more to buy an LED – as the 2020 incandescent ban will do – is a waste of society’s resources.
Then again, we’re talking about light bulbs. Most people aren’t paying attention to the economics of their light bulb purchases – even I, as an energy blogger, feel a little sheepish to be calculating the cost-benefits of an LED versus incandescent for our basement. And, people may be making mistakes or lack the information necessary to make the best choice for them. For example, they may wrongly extrapolate from the early, poor-performing CFLs to assume that all non-incandescent bulbs will be low quality.
A recent paper by Hunt Allcott and Dmitry Taubinsky goes through careful reasoning to show that if consumers aren’t paying attention, are making mistakes or lack good information, a light bulb ban, like the one under EISA, can make sense. The paper’s basic empirical results suggest that the ban can’t be justified on those grounds, but I’m willing to extrapolate those findings, as the authors indicate is possible, to suggest it would make sense for today’s LEDs, which are higher quality and more economical than the CFLs that Allcott and Taubinsky evaluate. Given that I think the chances of getting an optimal pollution tax are very low anytime soon, I’m even more comfortable with that extrapolation.
If my guess is correct – that the incandescent ban will be a good thing for society – then I really hope some regulatory agency finds the resources to crack down on Amazon and its sellers. But, this is mostly my speculation, and it would be useful to do more research like Allcott and Taubinsky’s to help quantify the potential impact of the ban. It seems that many members of Congress disagree with me.
Catherine Wolfram is the Cora Jane Flood Professor of Business Administration at the Haas School of Business, University of California, Berkeley. During Academic year 2018-19, she will serve as the Acting Associate Dean for Academic Affairs at Berkeley Haas. She is the Program Director of the National Bureau of Economic Research's Environment and Energy Economics Program, Faculty Director of The E2e Project, a research organization focused on energy efficiency and a research affiliate at the Energy Institute at Haas. She is also an affiliated faculty member of in the Agriculture and Resource Economics department and the Energy and Resources Group at Berkeley.
Wolfram has published extensively on the economics of energy markets. Her work has analyzed rural electrification programs in the developing world, energy efficiency programs in the US, the effects of environmental regulation on energy markets and the impact of privatization and restructuring in the US and UK. She is currently implementing several randomized controlled trials to evaluate energy programs in the U.S., Ghana, and Kenya.
She received a PhD in Economics from MIT in 1996 and an AB from Harvard in 1989. Before joining the faculty at UC Berkeley, she was an Assistant Professor of Economics at Harvard.