The LBNL calculations, however, rely on an underestimation of energy efficiency gains that would occur absent government mandates and use an unrealistically low consumer discount rate to calculate the value of future energy savings. A correction of those errors suggests that the DOE’s energy efficiency standards will actually cost consumers a net $46.4 billion to $56.2 billion through 2050 in addition to the $200 million to $250 million required to run the program over that period. The program’s costs are borne disproportionately by low‐ and middle‐income households.
Because the appliance standards do not correct a market failure, increases in energy efficiency via government mandates–even if the standards were recalibrated–are unlikely to enhance the efficient use of energy resources or improve consumer well‐being.
