British households have received more than 180 million free or subsidised light bulbs in the last eighteen months from energy companies. Many if not most of these are lying idle, as the government has admitted – a waste of money and resources.
The energy companies did this because they are obliged to cut energy use, and thus carbon emissions, in line with regulators’ targets. According to government calculations each low-energy bulb saves 0.04 tonnes of carbon over its lifetime. Money spent on bulbs – assuming they are used, of course – saves more carbon per £ than, say, wall insulation. Thus the energy companies have adopted the ostensibly least-cost way of meeting quantitative targets, as might be expected.
What a pity that the public haven’t responded in the way the government hoped – we still go on using our old inefficient tungsten bulbs as long as we can while many of the freebies have been dumped, causing a potential health hazard as they use significant amounts of mercury and need careful disposal.
But how predictable. All those years of state planning failures have not weaned our rulers off the use of quantitative targets even though they always lead to unintended consequences and often gross inefficiencies.
And how easily regulatory powers for one purpose transmogrify into something else entirely. We started out regulating energy companies, following privatisation, to prevent misuse of monopoly powers. But then we extend powers to enforce energy cuts – a bizarre requirement for companies that exist to sell energy. But perhaps not as bizarre as another obligation they face – that of reducing something called “fuel poverty”.
This notion makes no more sense than talking about “grocery poverty” or “transport poverty” or “iPod poverty” for that matter. If people’s incomes are low they may choose to economise on use of fuel rather than on food. Is this irrational?
If governments want to reduce poverty, raise social security benefits rather than subsidise one part of their consumption. And if they want to reduce carbon emissions, let us have a carbon tax. We may or may not like these policies, but at least they are explicit, in the open and subject to known strengths and weaknesses. Piling obligations on private businesses to do the government’s work is tempting in a time of fiscal stringency, but totally misguided.