well-intentioned government-created waste

This is a tremendous example of well-meaning government creating inefficients and waste. Take a look at the article from across the pond:

Twelve million low-energy light bulbs were posted to households over Christmas by an energy company as part of its legal obligation to cut carbon emissions, despite government advice that many would never be used.

A survey in July by the Energy Saving Trust found that the average home had six unused ones lying in drawers and cupboards.

In 2008 the Government ordered the big energy companies to invest in measures for improving energy efficiency and cutting fuel poverty.

Companies can choose how to meet their obligations.

Companies were allowed to register immediate carbon savings from every bulb issued on the assumption that all recipients instantly installed them in some of their most intensively used light sockets. In reality, many people either stored the bulbs or threw them away, often because they were the wrong fitting or wattage.

The companies can also meet their obligations by paying for homes to be insulated. This guarantees energy savings but is much more expensive.

Companies can pass on all the costs of the scheme to their customers. Over three years it is expected to add more than £100 to the average household’s energy bills.

This is a wonderful example of a well intentioned goal, reducing carbon emissions, turning into an inefficient, inexcusable and costly piece of waste. Companies, much like indivduals, respond to positive and negative incentives. When governments create a market distortion (e.g., provide an incentive) two things will happen 1) the distortion will lead to disequilibrium and very likely unintended consequences; and 2) the companies will follow the path of least resistance, which also happens to be the path of least cost. In this situation, resulting in 12m light bulbs sent to everyone in the country creating countless waste, not to mention the environmental impact of the shipping and packaging materials used. Oh, and the fact that the customers will eventually have to pay for these bulbs, you see nothing is really free.

These politicians were moronic to think that the companies would, out of the goodness of their hearts, pay for an expensive home insulation program and eat the full cost.

Original Article: http://www.timesonline.co.uk/tol/news/environment/article6973577.ece

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