CFLs in Developing Countries

cfl-bulb.jpgI went lightbulb shopping over the weekend and wound up looking through the stock of bulbs in the local Wal-Mart. Like Wal-Mart in America, Chinese Wal-Marts are pushing the compact fluorescent (CFL) bulbs big time. And, given the environmental and economic benefits of switching to CFL or LED bulbs, we can all applaud Wal-Mart’s stance. (An aside: I really ought to check out other retailers and see if they’re also stocking CFLs in bulk.) The only problem is, as far as I can tell from looking at what’s on the shelf, Chinese customers aren’t buying CFLs in large numbers.

The reason may be simple: price. Good-quality Chinese incandescent bulbs can be bought for as little as 25 cents apiece, while CFL bulbs sell for $4-$5. While a Westerner might absorb the costs of getting a CFL because it pays for itself in the long run, for Chinese consumers, a single CFL is the same as the price of 3-4 homecooked meals or one nice dinner out. Assuming they have twelve bulb sockets in their home, if they replaced all of the bulbs in their home with CFLs, it would cost more than a month’s heating bill in an average house here in Tianjin.

This got me to thinking: of all the developing countries in the world, China, with its huge, rapidly urbanizing population, conspicuous coal pollution, and relatively low energy efficiency, is the country which stands to benefit the most from CFLs. (India would be a close second.) Yet the costs of buying CFLs make them prohibitive for the average working-class Chinese, and also deter all but the most green-minded middle- and upper-class consumers. So how to get Chinese people to buy them? Since the price of the bulbs is unlikely to drop in the short run, one answer may be to reduce the price CFLs for Chinese consumers through a government subsidy.

While many subsidies in the world today are anachronistic (Western farm subsidies) or ill-advised (infant industry protection), subsidies aren’t always a bad policy in the short run.* (See Malawi’s recent history of fertilizer subsidies as evidence of this.) Subsidizing lower CFL prices and other “green” purchases — cleaner cars, homes with proper insulation, recycled consumer goods — would also help to offset the massive environmental damage China has suffered while maintaining a growth-first economic policy. Since China is on record as being opposed to sacrificing economic growth in its production centers in order to improve the environment, promoting greener consumption could reduce the overall environmental impact of the Chinese economy as the government implements policies aimed at stimulating China’s service and retail sectors.

* The obvious caveat being that subsidies left in place over the long run can outlive their usefulness and even become perverse. China provides many examples of this, such as its overflowing steel reserves, which are the result of from relentless subsidization from 2000 on, and have produced many undesirable economic and environmental effects.

Update: After poking around in some local Tianjin shops, I’ve come to the conclusion that Chris Waugh (in comments) is right about CFLs being more common than my post suggests, though they’re still uncommon in some schools and larger businesses here in Tianjin. Strangely, most of the CFLs I’ve seen in shops and markets have had an ugly yellow tint like a cheap incandescent bulb. Chinese companies are probably churning out cut-rate CFLs to compete with the high-quality foreign brand CFLs.


7 thoughts on “CFLs in Developing Countries

  1. Chinese consumers are also getting hosed on CFLs; I think a six-pack of 60W-equivalent bulbs at Wal-Mart here in New Orleans (undoubtedly made in China) runs about $10, making them around $1.67 each.

  2. That’s not surprising at all, Chris. I mean, iPods and X-Boxes are assembled here but Chinese people still pay a 20% markup, so why not do the same with the CFLs, only double or triple the price?

  3. Trouble for me is that your post doesn’t match my experience. My in-laws, as one example, have been using CFLs for longer than I’ve known them. I see no reason to believe they are in any way unique (apart from their Kiwi son in law, of course).

  4. I can only cite, well, my landlord’s house, my Chinese friend’s houses, most of my friend’s apartments, and most of the schools I work in. Incandescent or old-fashioned fluorescents abound, but there are few CFLs. Could it be a Tianjin thing?

    I should mention that, to their credit, my university’s new campus uses some nice LED lighting on the streets.

  5. I dunno, maybe it is a Tianjin thing, because there certainly doesn’t seem to be a lack of CFLs up here, which puts us in a sticky situation: No evidence but our own experiences to back up our arguments.

  6. Maybe, Chris. How about price, though? Are the Beijing retail prices comparable to the Tianjin prices I saw or more in line with the American prices (About 15-18 RMB)?

    Also, I think I’ll check out street shops here in Tianjin to see if they’re offering CFLs for less than the retail outlets.

  7. I have no idea about prices. It’s been a hell of a long time since I was out buying lightbulbs. CFLs tend to last quite a long time. I don’t recall them being expensive, though. And my peasant in laws can afford them, which suggests they’re being sold at a reasonably low price.

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