05/11/2015 05:07 pm ET Updated May 11, 2016

How the EU Can Save You Energy Without Wasting Your Resources

New technologies rarely emerge from the laboratory fully-formed and highly-efficient. ENIAC, the first electronic general-purpose computer, occupied 167 square meters and consumed 150 kilowatts of power. Today, our computers are far more portable, efficient and affordable - laptops run on about 29 watts of energy, while smartphones can last for days on a single charge. The equation for this energy evolution? Technological innovation plus fierce competition plus consumer demand - minus outdated and ill-advised regulation.

The European Commission should begin to adopt this formula. The Commission is moving in the wrong direction - proposing a new layer of regulation to cap the amount of energy used by displays like TVs, computer monitors and digital photo frames. At best, the Commission's proposed rules impose new costs and burdens for trade and commerce. At worst, these regulations threaten to stifle innovation, limit access to the digital economy and slow progress toward better energy efficiency - a loss for tech consumers and the industry alike. Instead of wasteful mandates, the Commission should look toward promoting competition in the marketplace by incentivizing higher efficiency.

At a time when companies are investing billions of euros to develop new and improved display technologies, imposing mandatory limits on energy use will harm progress in these vital economic and consumer interests. Market forces already require manufacturers to address consumers' performance demands, which increasingly include energy efficiency and environmental sustainability. Over time, companies will either innovate and improve, or fold - a brutal truth of tech-sector competition - as dictated by their ability to evolve. But artificial energy use limits have proven to be either ineffectual, as EU consultant CLASP noted in its review of eco-design and energy labeling regulations for TVs; or, worse, a barrier to organic progress, as we saw with the Commission's ban last year of high-power vacuum cleaners.

The Commission's energy regulations for electronics are already causing confusion for manufacturers. According to a report from the law firm Baker & McKenzie, "[T]he requirements and procedures for energy testing lack clarity or detail, and the approach of market surveillance authorities to their own conformity tests remains unclear. This includes whether and when products sold with accessories should be combined for energy consumption tests. There has been little guidance from the Commission on these points and, with the increasing scope of the eco-design regime, further guidance would be very timely."

The European Commission should consider how other, less intrusive measures have historically helped efforts to improve efficiency. A Consumer Electronics Association (CEA) study found that, absent government mandates, the active power usage for LCD TVs fell by 63 percent between 2003 and 2010. Power use for plasma TVs dropped 41 percent between 2008 and 2010. And just last year our research showed that even though U.S. homes now have more consumer electronics than ever, the percentage of household electricity those devices consume had dropped nearly ten percent from 2010 to 2013.

European Commission President Juncker's €315bn EU investment plan to boost jobs and economic growth stands in stark contrast to cumbersome energy regulations - cumbersome, inefficient rules that waste resources, shackle innovation and ultimately inhibit consumer access to next-generation technology. Market and incentive-based approaches to energy efficiency offer a more cost-effective, innovation-friendly path to reduction of carbon emissions. Examples include the Super-Efficient Equipment and Appliance Deployments (SEAD) initiative's Global Efficiency Medal Competition, the international ENERGY STAR program, and recent voluntary agreement approaches that are becoming an international norm, with models now in Europe, Australia, and the U.S. Initiatives such as these empower consumers to make informed decisions without killing the tech-industry creativity that makes our lives easier and helps fuel millions of jobs.

Premature action by the Commission can have unintended consequences for investment in technology in Europe and elsewhere. Because manufacturers cannot always predict a technology's future trajectory, they need that initial, pre-optimization period to test whether new technologies can capture consumer interest and fulfill their promise. Regulations that exclude or penalize new display technologies upon market introduction will stifle innovation in exciting new areas like organic light-emitting diode (OLED) and 4K Ultra HD displays, and high-dynamic-range imaging. Instead, market forces, combined with incentive and labeling programs, will achieve the Commission's goals without incurring the potential disruptive and cost impacts of unnecessary regulations.

Subjecting all display technologies to a "one-size-fits-all" energy performance standard ignores the fact that display technologies are neither static nor monolithic. Much more than toasters or air conditioners, electronic displays are part of our everyday lives. Our smartphones and tablets are usually within arm's reach, and these devices are endlessly customizable, with individual user preferences for sharpness, color and brightness affecting energy needs.

Consumers want energy efficiency, but they also want to optimize their smartphones, tablets, computers and TVs in ways that work best for them. By working with manufacturers and consumers to develop market-based incentives, the Commission will be better positioned to fulfill our shared goal of protecting innovation without compromising sound environmental principles. As a result, the EU's burgeoning tech sector and European consumers alike will have a brighter, better future.

Gary Shapiro is president and CEO of the Consumer Electronics Association (CEA)®, the U.S. trade association representing more than 2,000 consumer electronics companies, and author of the New York Times best-selling books, Ninja Innovation: The Ten Killer Strategies of the World's Most Successful Businesses and The Comeback: How Innovation Will Restore the American Dream. His views are his own. Connect with him on Twitter: @GaryShapiro.