The European Commission‘s Light Bulb Decree: Another Costly Regulation?
AbstractSince 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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Bibliographic InfoPaper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen in its series Ruhr Economic Papers with number 0245.
Length: 16 pages
Date of creation: Mar 2011
Date of revision:
Other versions of this item:
- Frondel, Manuel & Lohmann, Steffen, 2011. "The European Commission's light bulb decree: Another costly regulation?," Energy Policy, Elsevier, vol. 39(6), pages 3177-3181, June.
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-06-18 (All new papers)
- NEP-ENE-2011-06-18 (Energy Economics)
- NEP-ENV-2011-06-18 (Environmental Economics)
- NEP-EUR-2011-06-18 (Microeconomic European Issues)
- NEP-HME-2011-06-18 (Heterodox Microeconomics)
- NEP-REG-2011-06-18 (Regulation)
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