July 17, 2012

Energy Efficiency Regulations Set Dangerous Precedent

Ted Gayer

W. Kip Viscusi

Summary

One-size-fits-all energy efficiency mandates ignore the substantial diversity of preferences, financial resources, and personal situations that consumers and firms must align in order to make purchase decisions.

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A recent wave of government regulations has mandated energy efficiency standards for products ranging from passenger cars and commercial vehicles, to clothes dryers, air conditioners, and light bulbs. Federal regulators tout these new rules as "greenhouse gas initiatives" with the purported aim of reducing environmental pollutants—especially those that contribute to climate change.

But as the regulatory agencies' own estimates confirm, the environmental benefits of these regulations are negligible, and are often dwarfed by the societal costs they impose.

In our recently released Mercatus Center study, we examined a sample of energy efficiency regulations proposed or enacted by the Department of Energy, the Department of Transportation, and the Environmental Protection Agency to assess the validity of their benefit claims.

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