Comments on Proposed Process Changes for Setting Energy Conservation Standards
The Department of Energy (DOE) recently proposed changes to its process for prescribing energy conservation standards for consumer products and commercial/industrial equipment. We submitted comments explaining how DOE’s proposed energy savings thresholds and consumer test are unjustified and will reduce important consumer and environmental benefits.
In its changes, the Department attempts to draw lines that classify what energy savings are significant enough to be implemented. Setting such thresholds makes no economic sense, ultimately preventing cost-savings for consumers and benefits to the environment. The proposed process also includes a new “Rational Consumer” test, which is meant to account for consumer preferences in determining whether a standard is justified. DOE, however, does not provide details on the economic theory behind the approach or on how it would define a rational consumer. Additionally, our comments discuss the Social Cost of Greenhouse Gases, and we encourage DOE to continue monetizing the cost of carbon pollution using the federal Interagency Working Group’s 2016 estimates.
We filed additional comments in response to DOE’s Notice of Data Availability. According to DOE’s original calculations of monetized climate benefits, the past standards that DOE now seeks to retroactively label as “insignificant” are expected to collectively generate over $7 billion total in monetized climate benefits. A recalculation of monetized climate benefits using updated estimates of the social cost of carbon and the adjustment of past estimates into current U.S. dollars to account for inflation would only further increase this sum. Adopting the proposed threshold for significant going forward would similarly sacrifice significant environmental and consumer benefits in the future.