The development in energy efficiency for appliances has been remarkable over the past decades, notes Einar Du Rietz. The best thing is not only the cost savings, but that not even a galloping increase in the amount of white goods in use in the world would harm the environment. Quite the opposite. However, the industry seems to be clamping straight into the governmental subsidy trap.
Since the early 90’s, energy efficiency has been a major competitive driving force in the white goods industry, fuelled partly by compulsory labelling, but more importantly by the LCA/LCC (Life Cycle Analysis/Life Cycle Cost) connection. Or in less corporate language: The higher cost for a more expensive, efficient and thus with less environmental impact, appliance is covered by a smaller electricity bill. People may say that they make an environmental conscious decision when buying a new fridge, but in reality, they follow their wallet.
The technological development since the race started has been fantastic. The EU enforced efficiency categories, going from D to A is hopelessly obsolete and has been inflated by A+ and even A++. Your ten year old fridge might still be B, or even C, but if you get a new one, it’s bound to offer efficiency levels that only some years ago were impossible to reach. Lamps have now passed white goods in Europe as the most expensive part of the electricity cost, something wich might change however, with the transfer to low energy light bulbs.
In other words, the once so powerful argument is not so strong anymore, and not surprisingly, both environmentalists and the industry are now desperate to maintain the competitive advantage. The campaign is now on, fighting for efficiency subsidies from the government. The system already is in place in some countries, for example Holland.
The major result from these schemes is that people who can’t afford to go for the top products are forced to spend their tax money on people who can afford to. Another effect is of course that this destroys the argument that both industry and environmentalists have tried to build up for a few decades, that the beauty of it all lies in the win-win situation, where environment, cost savings and profit go hand in hand. The race for immoral benefits has started. My next fridge will come from the single player who refuses to participate. If such a player exists.