In a slightly nuanced version of the classic Bootleggers and Baptists scenario, a number of U.S. manufacturers are seeking new regulation of their industries. These include some big manufacturers in the lighting—and thus the light bulb—industry. Specifically, Phillips Lighting and several other light bulb manufacturers are advocating a legislative ban on incandescent light bulbs. If successful, the basic light bulb may soon become a technological pariah here in the U.S. and elsewhere around the globe. The basic bulb is deemed inefficient and environmentally wasteful. But some significant costs haven’t been presented to argue the case, it seems. Which means the benefits are surely overstated.
To sell the idea of industry-wide federal regulation, regulatory advocates are making an appeal that sounds both responsible and self-sacrificing. Big manufacturers in the lighting industry have become policy allies with environmental organizations, both here in the U.S. and in other countries around the globe.
Specifically, the manufacturing/regulatory alliance is targeting the conventional incandescent light bulb for demise, claiming it is obsolete, inefficient, and environmentally irresponsible. In use, the incandescent bulb consumes more electricity per unit of light produced than do fluorescents and compact fluorescents. In addition, incandescent bulbs generally have a shorter lifespan, meaning they require more frequent replacement and use more physical resources. Environmentally unfriendly on several counts.
The proposed change in regulation calls for mandatory, total phase-out of the incandescent bulb. Timetables vary by country, but several are in the works already.
Why this change, and why now? There are several answers. Public fear about energy availability, energy prices, and anxiety about the consequences of human-generated, cataclysmic climate change are running high. This in itself appears to offer several arguments for comprehensive change. From another perspective, federal regulation under the current administration, designed by the industry itself, may be preferable to regulation imposed by less friendly future legislators. Either way, the industry benefits by requiring a more expensive product for consumers. And with higher costs, the new standard will eliminate a lot of potential rivals.
Normally, if you raise prices, you lose some customer business. In addition, rivals are constantly trying to outperform you or undercut your price. The appeal to legislation that imposes stricter, higher, and more expensive standards eliminates both of those worries for the manufacturer. The result can be quite lucrative for the remaining supplier(s), and likewise, quite costly for the consumer.
Do consumers ultimately benefit in other ways, even if there is an immediate rise in cost? The answer is–it depends. Purely in terms of choice, consumers who were and are willing to use fluorescent-type light bulbs will lose alternative choices, though they presumably won’t mind. As for the consumers who have to be ‘led by the hand’ through regulatory mandate, they lose—at very least, they lose the ability to fulfill their plans.
Even without ‘psychic’ loss and benefit, the cost-benefit calculus for mandating fluorescent technology seems incomplete. Older fluorescent bulbs, and even the newest compact fluorescent bulbs carry some costs that the bootleggers and Baptists typically fail to mention.
All fluorescent bulbs, including the ballast for fluorescent tubes, contain toxic elements, including PCB’s and mercury. They cannot be tossed safely into everyday trash. Proper disposal requires hazardous waste collection and recycling procedures. Those disposal methods are currently a high-cost option, and generally unavailable to a broad range of consumers. Superior lifespan and safety aren’t foregone conclusions, either, according to reports.
Sadly, this regulatory plan leaves consumers ‘holding the bag’ in significant respects. Consumers will pay four to five times the per-bulb price of incandescent bulbs for fluorescents, will require hazmat procedures or special recycling measures to dispose of used fluorescent or compact fluorescent bulbs, and increase their potential exposure to health and safety risks in the form of toxic light bulb components.
Once the choice is eliminated, Americans can no longer opt out of these implicit and explicit costs. Of course, this reduces their options in many other places in the economy as well. Even if there are environmental benefits gained over an extended time horizon, consumers may not have an opportunity to offset their current costs in any meaningful way. That’s not a good argument for efficiency.
A global ban on the ordinary light bulb will surely impose the greatest hardship on the poorest consumers, and on populations in the world’s least wealthy nations. These people can neither appreciate nor afford a mea culpa on long-term environmental concerns, especially if they lose the option to use ordinary, available technology. It’s not just wealthy consumers in industrialized nations who will have to swallow an obligatory lesson on ‘wasteful’ consumption. Folks who aren’t even on the consumption ladder will remain at a huge economic disadvantage, if they cannot employ existing cheap options to increase their wealth and well-being.
By proposing legal restricitons on its own products and practices, an industry that advocates comprehensive product regulation is very much in the business of legally eliminating its competition. The dual obligations to satisfy consumer desires and to outcompete rival suppliers—the essence of the competitive process—disappear at the stroke of a pen. Consumers pay big, but score a zero, on the real game in this scenario.