August 5, 2013

The Department of Energy Thinks You’re Irrational

James Broughel

Senior Research Fellow
Summary

Energy and fuel efficiency regulations aim to reduce emissions from power plants and slow increases in global temperatures. Proponents of such regulations, including the present administration, refer to these types of policies as "common sense" on a regular basis. But the recent energy efficiency rules proposed by the Department of Energy and other agencies are being justified on the basis of correcting "irrational" consumer behavior, not on the basis of benefits to the environment.

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Energy and fuel efficiency regulations aim to reduce emissions from power plants and slow increases in global temperatures. Proponents of such regulations, including the present administration, refer to these types of policies as "common sense" on a regular basis. But the recent energy efficiency rules proposed by the Department of Energy and other agencies are being justified on the basis of correcting "irrational" consumer behavior, not on the basis of benefits to the environment.

The agencies claim that by limiting consumer choices they are improving social welfare. Many recent regulations issued by the Department of Energy are justified on this basis. These include new standards for light bulbs, air conditioners, microwave ovens, residential refrigerators and residential clothes dryers, among others.

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