Junk science behind federal appliance regs about to get junkier

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The Biden-Harris administration has embarked on a wave of anti-consumer home appliance regulations over the last several years. Each was justified in part by overblown claims of climate change benefits. And now, the Department of Energy (DOE) has proposed using a new methodology that would further inflate these hypothetical benefits to justify even worse regulations in the years ahead.

DOE is in the process of creating new energy use limits for stoves, dishwashers, furnaces, washing machines, water heaters, ceiling fans, refrigerators, and more. The agency always asserts that consumers experience net gains from these regulations, but CEI has filed comments highly critical of these rosy assumptions. In reality, such rules often raise the up-front costs of appliances more than is likely to be earned back in the form of energy savings. Some rules also compromise appliance choice, performance, and reliability.

But DOE's fictitious consumer benefits are only part of the problem. CEI has also taken issue with the agency's assertions that these regulations deliver quantifiable climate change benefits. For example, DOE's costly 2023 final rule for residential furnaces was estimated by the agency to provide $16.2 billion worth of such benefits. The agency arrives at this figure by calculating the reduced energy use attributable to the efficiency standards and then estimating the amount of greenhouse gas emissions avoided as a result - mostly carbon dioxide emitted to produce electricity at coal or natural gas-fired power plants. Then it multiplies the tons of emissions avoided by the calculated per unit dollar cost to society of such emissions.

Until now, DOE has relied upon the 2021 Interagency Working Group on the Social Cost of Greenhouse Gases (IWG 2021). IWG 2021 provides the agency with the per ton Social Cost of Greenhouse Gases (SC-GHG) values.

There are numerous flaws with IWG 2021, nearly all of which serve to overstate the calculated benefits of avoided emissions. Among them are the use of improperly low discount rates, reliance on climate models that have consistently overstated actual warming, reliance on baseline emission scenarios that implausibly assume an increasingly coal-centric global energy system through 2100 and beyond, and the downplaying of the capacity for adaptation to mitigate climate impacts. Other questionable assumptions, such as the inclusion of claimed climate benefits out nearly 300 years into the future and the use of global rather than national benefits, are also skewed toward inflating the end result.

In our furnace rule comment and several others, CEI documented these limitations and concluded that these calculations of the social cost of greenhouse gas emissions are far too speculative and assumption-driven to have any real policy value, and that they were clearly being misused in support of an aggressive regulatory agenda. Indeed, we noted that that if more reasonable assumptions were used than those in IWG 2021, the climate damage estimates plummet and in some scenarios become positive. In other words, the benefits of more carbon dioxide in the air from improved agricultural productivity can exceed any modest harms.

Relying on IWG 2021 was bad enough, but in its most recent proposed rule for commercial refrigeration equipment DOE is switching to an updated 2023 version of SC-GHG provided by the Environmental Protection Agency. The agency states that this new way of quantifying the social cost of greenhouse gas emissions would "reflect the best available scientific and analytical evidence and methodologies," and thus is the most appropriate one to use going forward.

The new methodology takes several already-dubious assumptions in IWG 2021 and stretches them further. For one category of commercial refrigeration equipment covered in the proposed rule, DOE calculates the climate benefits of $48-$320 million dollars under IWG 2021 but a whopping $564-$1,713 million under the new way. That's around 5-10 times higher.

The mere fact that the supposedly best available methodology can change so precipitously puts the lie to any notion that this is rock-solid science we are dealing with. If the social cost of greenhouse gas numbers that DOE thought were the best available until now turn out to be as much as an order of magnitude too low, it is high time to scrap this phony exercise rather than use it to burden the American people with yet more costly appliance regulations.