Waxman Markey Cap And Trade’s Biggest Losers: Electrical Equipment And Appliances

Posted on Fri 06/26/2009 by


By Nick Loris

waxman-markey-electricity-and-appliances(At the Heritage Site, Nick Loris wrote a series of posts with a similar ‘Biggest Loser’ tile, detailing different areas, and this is just one of those posts.)

Household appliances use a lot of energy, which is why for the past several years policymakers have tried to mandate energy efficient standards on washing machines, refrigerators and other products. Energy efficiency can be beneficial for consumers, but rarely when the government tries to force it on the public. Energy-efficient appliances and mechanisms will not painlessly lower electricity bills. These measures also impose costs, and consumers benefit only if the energy savings outweigh the costs. For one thing, mandatory improvements in efficiency usually raise the purchase price of appliances; sometimes the increase is more than enough to negate the energy savings. In addition, the forced reduction in energy use can come at the expense of reduced product performance, features, or reliability. There’s also the problem that many of these “green products” are making false claims.

Now Washington is using a new tactic to pick on the electrical equipment and appliance industry: cap and trade. But this time they’re going straight to the industry workers. Not only do these products use a lot of energy, but they take a lot of energy to make.

And since the goal of cap and trade is for people to use less energy, the only way policymakers can make that happen is if they tax energy high enough people will reduce consumption. By raising the cost of production, the electrical equipment and appliance industry will suffer and companies will be forced to shed jobs. The Waxman-Markey bill would destroy 23,000 electrical and appliance jobs on average, with peak years seeing unemployment rise by almost 70,000.

It’s worth noting that the job losses come after accounting for the green jobs policymakers are so adamant about creating. But don’t worry, because the architects of the bill built in unemployment insurance; too bad it will only help 1.5% of those losing their jobs from the bill.

TonyfromOz adds …..

This has already started in Australia. The Queensland State Government is legislating to introduce a bill that will limit the sale of air conditioning units that they consider to be big users of electrical power, and they explain this using terms of electrical inefficiency. This will drive up the costs of those air conditioners that do happen to meet the new criteria, and will also drive up the cost of those other air conditioners as well. They legislated the same for ‘water efficient’ washing machines, offering purchasers a Government rebate if they purchased the newer machines. This was a great thing, as the price of those machines rose, oddly enough by just about the same amount as the Government rebate. The same will apply when this legislation is introduced for air conditioning units, almost an essential in Australia’s harsh Summer climate.

Contributing Author Nick Loris writes at The Heritage Foundation and he is a Research Assistant at The Heritage Foundation’s Roe Institute for Economic Policy Studies.

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