Lightbulbs and Lattes

Sometimes we confuse the number of visible acts we make working at something with the progress we actually make towards our goal. Let me explain what I mean with a story about what our leaders in Washington have been up to.

Did you know that Congress voted to ban the familiar incandescent light bulb? More than a year ago? It’s true. Starting in 2012, no more 100 watt bulbs and by 2014 none of any wattage. Clever of them to pass something that doesn’t take effect for 5+ years. The small number of folks who really care are happy, and everybody else won’t even notice until after what must seem like an eternity to the guys inside the beltway.

And people will notice. Although the law does not, strictly speaking, ban the incandescent bulb, it only mandates energy efficiency standards that amount to a ban, the bottom line is that consumers will have to replace the familiar old bulbs with compact fluorescents. And earnest green hype aside, CFLs are not the same. The light they give off is a little bluer, they cost about six times as much (twenty times as much if you want to use a dimmer switch) won’t fit in all existing fixtures, and, let’s face it, look dumb. Oh, and also they contain mercury so are bona fide toxic waste. Not only can’t you recycle them, putting them in the trash is illegal in many places.

So what’s the benefit for this inconvenience? Why, we reduce greenhouse gas emissions, of course! By how much, you ask? Good question. For that I will have to do actual research, as none of the news articles seem to cover that. According to the EPA, burning fossil fuels to generate electricity accounts for 38.9% of CO2 emissions in the US. And according to the Energy Information Administration (which is a real government agency, even though it sounds like I made it up) residential use of electricity is 37% of the total, so 14.4% of CO2 is due to the electricity we use in our houses. And how much of electricity used at home is for lighting? Only 8.8%. To put that in perspective, 13.7% goes to the kitchen refrigerator. 3.5% is for stand-alone freezers. The total percentage of our national CO2 output due to household lighting is 1.27%.

And how much of this 1.27% will we eliminate by doing away with Edison’s greatest work? That’s not so clear. But let’s get real, even cutting it in half isn’t going to move the CO2 needle much. Banning stand-alone freezers would probably be just as effective and much less annoying. There is even the argument to be made, which I don’t buy, that switching to CFL will not reduce CO2 emissions at all because CFLs don’t give off heat, so people will burn more oil and gas heating their houses.

This is bad policy. Even if you accept that looking to take out CO2 from the 14.4% of it that goes to household electricity makes sense, then looking at the 8.8% of that that goes to lighting is nuts. So when this law kicks in people will rise up and protest and force its repeal? I doubt it. Most people really like the idea of saving the planet and the fact that this particular way is a little bit of a sacrifice just makes it that more attractive. The best part is that it is so everyday. You get to remind yourself that you are saving the planet every time you see that funny looking bulb in your living room.

What this has to do with personal finance is that it is exactly the same dynamic as the idea that you can save your way into wealth by giving up a minor daily expense or two. Give up the lattes at Starbucks and you will be rich when you retire. The fact that the math doesn’t really work doesn’t stop millions of people from embracing the principle. Its attraction isn’t so much that you save money but that it’s something tangible that you can do starting tomorrow and everyday. As with the light bulbs, it is as if progress towards the actual goal is less important than maximizing the number of noticeable acts in the right direction.

Meanwhile, I’m buying light bulbs to stash in my basement. Look for them on eBay in 2014.

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