A Brighter Idea: The Story of Five Regulations that Spurred Innovation

The light bulb: A universal symbol that inspires ingenuity. Would we say the same about federal regulations?

No, they’re job-killers! They’re too costly! Too burdensome! All too often we hear the conservative mantra that federal regulations inhibit economic growth. The untold story is that regulations are actually catalysts of technical innovations and economic growth.

When federal agencies implement rules for efficiency, worker safety, or public health and welfare, companies need to reformulate their products and services to comply.

And so begins good ol’ American competition.

To comply with federal standards, companies need to investment in research and development, which often yields to new products and systems that both solve public policy problems and, often, boost business.

The result? A brighter idea emerges.

Public Citizen’s new report follows the narrative of five government regulations and how they spurred innovation.

1. The Incandescent Light Bulb

For the sake of energy efficiency, Congress passed the Energy Independence and Security Act in 2007. The measure requires light bulb manufacturers to meet a 25 to 30 percent increase in incandescent light bulb efficiency by 2012.

The law, drafted in consultation with industry, began a new era in innovation.

After heavy investment by many companies, Philips Lighting, a Dutch electronics company, emerged with a better bulb. Philips’ halogen incandescent bulbs use 30 percent less energy and last three times longer than traditional bulbs, which waste 90 percent of their energy in the form of lost heat. Other manufacturers, including General Electric and Osram Sylvania, have also entered the market with similar energy-efficient halogen incandescents.

2. Reducing Sulfur Dioxide Emissions

Sulfur Dioxide, SO2, is a major air pollutant that causes acid rain and smog, and contributes to thousands of premature deaths annually in the United States.

During the 1970s, Congress passed the Clean Air Act to curb SO2 emissions at their largest source—coal-fired power plants. Coal power plants were then required to implement and install “scrubbing” technologies in their tall smoke stacks.

Although scrubbers had serious technical problems, the law led to major improvements. By the mid-1990s scrubbers’ efficiency had improved 25 percent, their costs were cut in half and the number of vendors offering the technology greatly increased.

Between 1980 and 2008, the country experienced a 71 percent decrease in SO2 concentrations while the amount of coal-generated electricity in the U.S. was still increasing.

3. Protecting Workers from Poisonous Vinyl Chloride

In 1974, vinyl chloride, a substance used to produce a popular type of plastic called polyvinyl chloride (PVC), was found to cause a rare and fatal cancer among manufacturing workers.

Four months later, after substantial investigation into the health risk, the Occupational Safety and Health Administration (OSHA) issued a rule banning any “detectable level” of vinyl chloride in workplaces.

Ten months after final rule was issued, the largest PVC manufacturer, B.F. Goodrich, announced that it had developed a containment system that prevented vinyl chloride from coming into contact with PVC workers. The company then announced that it had signed licensing agreements for its containment technology with six corporations and planned to expand to several other plants.

The innovative process not only shielded countless manufacturing workers from a fatal chemical, but was more efficient.

4. Preventing Ozone-Layer-Destroying CFC Emissions from Aerosols

First developed in the 1920s, chlorofluorocarbons (CFCs) are chemical propellants that dispense anything from perfumes and spray deodorants to insecticides from aerosol cans.

In 1974, CFCs were found to break down the ozone layer, adversely affecting the earth’s vegetation and exposing people to increased risk of skin cancer. In 1977, the EPA and two other agencies banned all use of CFCs as aerosol propellants—the largest source of CFC emissions in the U.S.

In response to the federal ban, industry raced to develop a preferred alternative to CFCs. Just one day after the final implementation of the ban, the inventor of the original aerosol valve announced that he had the solved the problem. Robert H. Abplanalp said he had developed an aerosol system with a non-CFC propellant that worked better than existing systems.

Within two years of the announcement of the rule to ban CFCs in aerosols, CFCs were being used in less than 3 percent of all aerosols. Now, CFC use has been virtually eliminated in both aerosols and other applications, and the ozone layer is recovering.

5. Improving the Energy Efficiency of Home Appliances

Several laws, starting in the 1970s, have mandated improved efficiency standards for appliances.

These regulations resulted in dramatic improvements. Many appliances use less than half the energy they did in the 1970s.

Appliances also cost much less than they did when before the standards were implemented. For example, today’s refrigerators cost about half as much on an inflation-adjusted basis than the energy-burning hogs of the 1980s.

The promise of innovation should not be viewed as a requirement to justify necessary rules to protect workers, the public and the environment. However, the fact that it often happens is something to keep in mind when industry repeats its yelling about the burden of regulation.

Want more details? Check out Public Citizen’s new report Regulations Spur Innovation. Want to take action to ensure the innovation that spawned the above innovations, saved lives and created jobs doesn’t stop on account of the deep pockets of transnational corporations that run the Chamber of Commerce? Click here to TAKE ACTION.