Can We Regulate Our Way to Energy Efficiency? Product Standards as Climate Policy

Abstract

In the past five years, governments have enacted tough regulations to reduce the carbon footprint of energy-using products. Their regulatory tool of choice has been Minimum Energy Performance Standards, which set efficiency benchmarks for lighting, refrigeration, heating, cooling, and other equipment. This global growth in product standards for energy efficiency, which legal scholars have not examined closely, is one of the most important developments in climate policy today.

In this article, I examine these product standards as tools to reduce global energy demand. I argue that product standards are justifiable given well-known energy market failures and that standards are often superior to non-regulatory tools, such as labeling or cap-and-trade systems, for reducing energy consumption from household, commercial, and industrial equipment. Addressing some of the traditional criticisms of command-and-control regulation, I show how mandatory product standards, if deployed correctly, can be consistent with the technological innovation and diffusion that we will need to address the climate crisis. This article concludes with some thoughts on the political viability of product standards as legislators become increasingly hostile to new environmental regulation.