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TV Lunacy: the California Energy Commission

October 20, 2009

by Kevin Burke
TV Lunacy: the California Energy Commission

The California Energy Commission is set to impose harsh standards on large televisions that use heaps of energy after holding a vote on November 4. To frame this as a conservative issue, people have been demonstrating that they'll buy big TVs and are willing to pay for the electricity required to run them.  TV manufacturers have been selling them TVs that suit their demands, but the government believes that this arrangement is unacceptable. To frame this as a liberal issue, rich people have been wasting money on giant TV screens which waste energy and contribute to global warming.  To solve the problem, the CEC is proposing a sensible law to ban giant, energy-guzzling TVs.

Commissioner Julia Levin said, "We would not propose TV efficiency standards if we thought there was any evidence in the record that they will hurt the economy. This will actually save consumers money and help the California economy grow and create new clean, sustainable jobs."

What she's missing is a basic grasp of reality. Where to begin?

  1. "We would not propose TV efficiency standards if we thought there was any evidence that they would hurt the economy." If the standards force people to buy smaller, cheaper TVs, or make them less likely to buy a TV, then yes, these standards damage the economy, and reduce California's sales tax revenue. If they force TV manufacturers to charge more for TVs, people will buy fewer TVs, which also hurts California's economy and sales tax revenue. If TV manufacturers could cut the amount of energy that their TVs use and keep the products at the same quality and price, they would because that would make people more likely to buy their TV. Furthermore, TV manufacturers have been cutting the amount of energy that their TVs use, with little prodding from the government. We don't need government regulation to foist energy efficiency upon them.  The only way this regulation could avoid disrupting the economy is if the standards were so lax that every TV sold today passes, which would defeat the entire point of having the standard.

  2. "This will actually save consumers money." This is a classic paternalistic argument: we're passing this law to save you, the consumer, money. Well, diamond rings and trips to Italy are expensive--should we ban those to save the consumer money? People buy TVs because they value the TV more than they value the cash in their pocket. That's how the economy works.

  3. "This will create new clean, sustainable jobs." In Asia, where nearly every TV is manufactured.

  4. Giant screens are awesome. I do nearly all my coursework down in the Pomona computer science lab, because they have huge Apple displays and I can link three of them together if I want. You might call it overkill, but then again, you've never had twelve different windows open at one time. Watching a football game on a big screen in HD makes me want to hug the guy in glasses who figured out how to fit more pixels into the tiny frame. When I watch movies on a big TV, I get more pleasure than watching them on a small TV. Sure, this costs me more money than buying a small TV, and more in electricity bills but I think it's worth it; I bought it.

There is one good argument for this legislation-- that when you buy a giant TV from Sony, it hurts me because the energy pollutes the environment, which we all share. But the fix for this problem isn't a ham-handed ban on one consumer good that makes up a fraction of a percent of total world energy use, it's to raise the price of electricity so people take my environmental pain (an externality, in economics) into account when they are buying products.

California is in fiscal trouble in part because of shortsighted, economically backward regulatory bodies like the CEC. If big TVs are using too much energy, the problem is that electricity is too cheap, not that the TVs are too big.

(Hat tip to Megan McArdle at the Atlantic.)

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