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The European Commission‘s Light Bulb Decree: Another Costly Regulation?

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  • Manuel Frondel

    ()

  • Steffen Lohmann

Abstract

Since September 2009, Regulation 244/2009 of the European Commission enforces the gradual phase-out of incandescent light bulbs. As of September 2012, only energyefficient lighting sources will be allowed for sale. Among these are halogen light bulbs, light-emitting diodes (LED), or compact fluorescent light bulbs? often referred to as energy-saving light bulbs. The Commission’s justification for the phase-out of conventional light bulbs maintains that a reduction in the electricity consumed will not only lead to lower energy cost for private households and industrial consumers, but at the same time lead to a decrease in greenhouse gas emissions. This article discusses possible reasons for the slow market diffusion of energy-saving light bulbs and shows that the investment in energy-efficient light bulbs does not necessarily lead to significant cost reductions. Drawing on some illustrative examples, we demonstrate that the use of cheaper incandescent bulbs instead of energy-saving light bulbs can be economically rational in cases of rather low usage times, in which the higher initial purchasing price might only pay off after very long time spans. Furthermore, due to the coexistence with the European Emissions Trading Scheme (ETS), this regulation attains no additional emission reductions beyond those achieved by the ETS alone. We thus conclude that the general ban of incandescent light bulbs is inappropriate and should be abolished by the Commission.

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File URL: http://repec.rwi-essen.de/files/REP_11_245.pdf
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Bibliographic Info

Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0245.

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Length: 16 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:rwi:repape:0245

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Keywords: Energy efficiency; rebound effect;

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  1. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy paradox and the diffusion of conservation technology," Resource and Energy Economics, Elsevier, vol. 16(2), pages 91-122, May.
  2. Manuel Frondel & Jorg Peters & Colin Vance, 2008. "Identifying the Rebound: Evidence from a German Household Panel," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 145-164.
  3. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
  4. Jaffe, Adam B. & Stavins, Robert N., 1994. "The energy-efficiency gap What does it mean?," Energy Policy, Elsevier, vol. 22(10), pages 804-810, October.
  5. Frondel, Manuel & Schmidt, Christoph M. & Vance, Colin, 2011. "A regression on climate policy: The European Commission’s legislation to reduce CO2 emissions from automobiles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 45(10), pages 1043-1051.
  6. McDonald, Robert & Siegel, Daniel, 1986. "The Value of Waiting to Invest," The Quarterly Journal of Economics, MIT Press, vol. 101(4), pages 707-27, November.
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Cited by:
  1. Roger Fouquet & Peter J.G. Pearson, 2012. "The Long Run Demand for Lighting:Elasticities and Rebound Effects in Different Phases of Economic Development," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
  2. Schleich, Joachim & Mills, Bradford & Dütschke, Elisabeth, 2014. "A brighter future? Quantifying the rebound effect in energy efficient lighting," Working Papers "Sustainability and Innovation" S3/2014, Fraunhofer Institute for Systems and Innovation Research (ISI).
  3. Mills, Bradford & Schleich, Joachim, 2013. "Household transitions to energy efficient lighting," Working Papers "Sustainability and Innovation" S5/2013, Fraunhofer Institute for Systems and Innovation Research (ISI).

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