This weekend, I was on Fox News discussing new government regulations for microwaves. Actually, the microwave thing is more or less a side show. It’s much bigger than that. This topic probably deserves even more attention than it has garnered, so I thought I might work to correct that. Here are four reasons you should pay attention:
1. Yet another unilateral decision. The Obama Administration did not initially seek public comment, nor did this require Congressional approval or notice. We shouldn’t be surprised, Obama has previously promised he would “act alone” on climate change. (And because of a 1997 Supreme Court decision on the Clean Air Act, the EPA has the authority to make these changes.)
2. It was hidden. Instead of proudly announcing this decision, the Obama administration buried it in an efficiency standards report for microwaves that came out in late May. Really.
3. The price is arbitrary. The new regulations constitute an increase in something called the “social cost of carbon” — which is a guesstimate about what future costs will be attributable to climate change (flooding, crop damage, etc.) Even assuming you believe in anthropogenic global warming and that something can be done to stop or slow it (and that this something wouldn’t absolutely wreck the economy), the cost estimates are impossible to quantify (as evidenced by the fact that regulators today believe the cost should be about 60 percent higher than experts a couple years ago predicted.)
Economists widely disagree about how to apply a concept known as the discount rate, and as a result, the true cost could be anywhere between, say $10 per metric ton, or $100 per metric ton. It’s completely up to the (you guessed it!) the regulators to decide what to charge. This, of course, means the prices will probably go up in a year, or so.
4. It’s a big deal. This could impact the cost of almost everything you consume (including, yes, the cost of microwaves). What is more, the new regulations will impact the projected cost of building and maintaining power plants — and the Keystone XL Pipeline project. (When calculating a cost-benefit analysis, these new regulations will increase the (supposed) cost, making it less likely that new energy projects will be green lit.)