The Biden administration has been on a crusade against climate change. Its weapon of choice has been regulations. The Inflation Reduction Act (IRA) included electric vehicle provisions and clean energy tax credits, neither of which will do anything significant to reduce global temperatures. Earlier this year, one of Biden's Consumer Product Safety Commission commissioners suggested the ludicrous idea of a gas stove ban. In April, Biden proposed electronic vehicle (EV) emission standards so strict that they illustrate the flaws of advocating so much for EVs.
Now we have Biden's Department of Energy (DOE) proposing energy efficiency standards on consumer water heaters. If successful, these regulations will compel "that most common-sized electric water heaters to achieve efficiency gains with heat pump technology and gas-fired instantaneous water heaters to achieve efficiency gains through condensing technology." The latter regulation is designed to push more people towards electrification. The Biden administration's DOE calculated that the regulations would save consumers $11.4 billion per annum. It makes it seem like a win for fighting climate change. Here are some issues I take with that assertion.
I am going to forget the fact that these sorts of rosy projections tend to overstate benefits while understating costs. Industry data show that the average installation cost for a heat pump versus an electric water heater is up to $2,800 more expensive. How long it takes for the consumer to recoup savings depends on climate, house size, and number of occupants. Based on DOE estimates, it can take anywhere between a few months and eight years to break even.
Even if someone experiences a modest savings of $20/month, odds are most households would rather not pay extra money upfront for the more expensive unit. 57 percent of Americans do not have enough to cover a $1,000 emergency. Especially with the monetary and fiscal policy that brought this inflation, what makes you think most households have an extra $2,800 laying around to pay for a water heater that complies with these DOE standards? This does not get at the fact that the same industry data show that a gas water heater is cheaper in the long-run than an electric water heater.
I have other reasons to think prices will go up as a result of these proposed regulations. The leading water heater manufacturer, Rinnai Corporation, stated that the proposed standards are not feasible for its noncondensing line and that they will "force consumers to choose less efficient water heating solutions such as tank style water heaters." That means supply of water heaters will be constricted, which will drive up prices. Rinnai President Frank Windsor also warned that in addition to higher energy bills, there will be shorter appliance lifespans. This means higher repair costs, as well as that the DOE's projections are based on rosier assumptions about longer appliance lifespan.
The Right-leaning National Review illustrations functional considerations for a water heater: "The heat-pump water heaters are a compelling choice for those living in hot climates, but for those living in places that get colder, it isn't as great of an option. The unit essentially functions as an air conditioner because after it suck in hot air from the room, it then blows out cold air." The article points out another issue: "The heat-pump water heaters require seven feet of clearance, which means they are not a good option for people who have water heaters in rooms with low ceiling or underneath staircases." In other words, a heat-pump water heater is not an optimal choice for all households. People should have the right to purchase whichever water heater best fits their circumstances.
I am already skeptical about the monetary benefits for the climate since most of our energy still comes from fossil fuels. Only with an electric grid with predominantly renewable energy could this possibly work, and we are still a long ways from that objective. But let's get at a more essential question: What about the carbon emissions reduction these standards are supposed to bring?
The DOE calculates that it will reduce carbon emissions by 501 million metric tons (p. 15). 501 million sounds like a large number, but that number needs to be put into greater context. I asked a similar question with the IRA last year: How much will this policy actually reduce global temperatures? After all, the rationale for these efficiency standards is that reducing global temperatures will mitigate the effects of climate change. If it does not reduce global temperatures significantly (certainly at the 1.5 degrees Celsius threshold that has people worried), then we should seriously question why the DOE is implementing these regulations in the first place.
Per the Right-leaning Heritage Foundation, even if the United States eliminated all fuel-based carbon emissions, it would only reduce global temperatures by 0.2 degrees Celsius. If that is how little eliminating all carbon emissions helps, imaging how insignificantly tiny and minute these water heater efficiency standards are going to make a difference. It is basically next to nil. Plus, as I brought up in April, climate change is not the crisis the alarmists make it out to be.
Why is the DOE going out of its way to burden the American people with these regulations? It surely is not because these efficiency energy standards help with climate change, which makes the DOE's motives here more suspect. Using the excuse of "it's to fight climate change" is giving the Biden administration the carte blanche to regulate anything with an electric plug or that fires up around the house. Any home owner that wants to go all-electric can do so at any time. There is no need for government fiat, especially since these regulations will do nothing of actual significance to lower carbon emissions. As such, the Biden administration should back off its war on home appliances and rescind its proposed rules. That way, we can get back to some actual common-sense environmental policy instead of feel-good environmental policy.
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