New Study Shows Proposed California TV Mandate Would Cost Jobs, Reduce State Revenue and Limit Consumer Choice
The Consumer Electronics Association (CEA) today released a report demonstrating the economic harm consumers and businesses in the State of California will suffer under the California Energy Commission’s (CEC) proposal to set arbitrary limits on television electricity usage. The study, commissioned by CEA and conducted by the economic consulting firm, Resolution Economics LLC, offers the first comprehensive analysis of the negative economic impact of the CEC’s proposed regulations in California.
California to Lose $50 Million in Sales Tax Revenue and 4,600 Jobs Statewide
“The CEC proposal will cost California $50 million annually in state tax revenue and destroy 4,600 jobs that are tied to TV sales, distribution and installation,” said Doug Johnson, senior director of technology policy for CEA. “The consumer electronics industry is committed to achieving energy efficiency in ways that benefit consumers and inspire innovation. The CEC’s proposal to eliminate consumer choice and remove 25 percent of televisions from the market is a job killer and does not benefit consumers.”
Key findings from the analysis:
- Store closings and increased unemployment: $50 million and 4,600 retail jobs will be lost in California as a significant share of TV models will be removed from store shelves, driving consumers to online and out-of-state stores to buy the TVs they want.
- Consumers pay more: Consumers are free today to choose energy efficient TVs, and consumers who do so pay, on average, $167 more for ENERGY STAR qualified TVs, according to Best Buy. But rather than allow consumers to make that choice, the stringent CEC regulations will force all Californians to buy more expensive TVs that meet state-mandated technical specifications, resulting in higher prices for all TVs, whether or not consumers want to buy an energy-efficient model.
- Popular TVs will be unavailable: Sales of liquid-crystal display (LCD) TVs measuring 30-34 inches rose 70 percent in 2008, but 83 percent of LCD TVs measuring 24-34 inches that meet ENERGY STAR specifications will be eliminated under the 2013 standard.
- Additionally, 80 percent of current 35-39 inch LCD TVs and 100 percent of current plasma TV models larger than 60 inches will be eliminated under the 2011 standard.
- Decreased industry competition, less innovation: Removing TVs from the market decreases competition among brands, reducing innovation of new features and technologies. New product developments such as 3D-HDTV and Internet-enabled TVs could be significantly impacted or delayed to market due to concerns about meeting the CEC’s arbitrary limits.
“It’s clear that there are much more effective and consumer-friendly ways to achieve efficiency that are already working without a negative economic impact,” said Johnson. “For over 10 years, ENERGY STAR has motivated TV manufacturers to reduce power consumption while still developing new technologies, like high definition displays, that consumers demand. While ENERGY STAR is voluntary, all major TV manufacturers participate in the program. As a result, in 2007 alone, ENERGY STAR-qualified electronics products, including TVs, saved over 23 billion kilowatt hours of electricity; which is enough to power San Francisco and San Diego Counties.”
The California Energy Commission responds to CEA’s claims here:
The Consumer Electronics Association (CEA) is the preeminent trade association promoting growth in the $172 billion U.S. consumer electronics industry. More than 2,200 companies enjoy the benefits of CEA membership, including legislative advocacy, market research, technical training and education, industry promotion and the fostering of business and strategic relationships. CEA also sponsors and manages the International CES — Where Entertainment, Technology and Business Converge. All profits from CES are reinvested into CEA’s industry services. Find CEA online at www.CE.org.