Eco-Labeling Initiatives Dan Kovalsky 4/25/2007. What is an eco-label? A label on a product that expresses one or more environmental or energy concepts.

Eco-Labeling Eco-Labeling InitiativesInitiatives

Dan KovalskyDan Kovalsky

4/25/20074/25/2007

What is an eco-label?What is an eco-label?

A label on a product that expresses one A label on a product that expresses one or more environmental or energy or more environmental or energy concepts.concepts.

Why labels?Why labels?

Global economyGlobal economy Rational Choice TheoryRational Choice Theory Ingrained psychological effectsIngrained psychological effects

Global EconomyGlobal Economy

Through advances in Through advances in transportation, communications, transportation, communications, and trade agreements over the and trade agreements over the past several decades, global trade past several decades, global trade is a part of the modern economy. is a part of the modern economy.

Rational Choice TheoryRational Choice Theory

Rational choice theory postulates Rational choice theory postulates that, given relevant information, that, given relevant information, consumers have the ability to consumers have the ability to weigh the available choices and weigh the available choices and rank products according to their rank products according to their preferences. They will then select preferences. They will then select their purchase based upon these their purchase based upon these rankings. rankings.

Rational Choice TheoryRational Choice Theory

Without labels, consumers have more Without labels, consumers have more difficulty taking into account difficulty taking into account environmental and energy concerns environmental and energy concerns when ranking products. Either they will when ranking products. Either they will not take into account those concerns at not take into account those concerns at all, or run the risk of making an all, or run the risk of making an inefficient choice due to a faulty inefficient choice due to a faulty assumption about the environmental or assumption about the environmental or energy impacts of a product. energy impacts of a product.

Rational Choice TheoryRational Choice Theory

The Ashridge Business School study: The Ashridge Business School study: 69 percent of Tesco shoppers said the 69 percent of Tesco shoppers said the

impact on the climate of the food they impact on the climate of the food they bought was important, but they didn’t act bought was important, but they didn’t act on these concerns because there was no on these concerns because there was no information about it on the products' information about it on the products' packaging. packaging.

Ingrained psychological Ingrained psychological effect effect

There is hope that constant exposure to There is hope that constant exposure to labels which explain the energy or labels which explain the energy or carbon footprint of products will have a carbon footprint of products will have a lasting subconscious impact on lasting subconscious impact on consumers. consumers.

Types of LabelsTypes of Labels

Energy efficiency labelsEnergy efficiency labels ““Food miles”Food miles” Carbon foot-printingCarbon foot-printing

Energy-efficiency LabelsEnergy-efficiency Labels

Energy efficiency labels list the rate of energy Energy efficiency labels list the rate of energy used to accomplish a particular task. used to accomplish a particular task.

Examples of energy efficiency labels include Examples of energy efficiency labels include those on appliances, fuel-efficiency of cars, those on appliances, fuel-efficiency of cars, and florescent light bulbs.and florescent light bulbs.

An energy efficiency An energy efficiency label from the EU.label from the EU.

““Food Miles”Food Miles”

At the most basic level, “food miles” calculates At the most basic level, “food miles” calculates the distance traveled by a food product, or a the distance traveled by a food product, or a product’s components, to reach the point of product’s components, to reach the point of sales. sales.

““Food miles” is one way for consumers to Food miles” is one way for consumers to prefer locally-produced foods over distantly-prefer locally-produced foods over distantly-produced, often air-transported foods. produced, often air-transported foods.

Carbon Foot-printingCarbon Foot-printing

Carbon footprint is a measure of the Carbon footprint is a measure of the carbon – a greenhouse gas – emitted carbon – a greenhouse gas – emitted into the atmosphere as a result of some into the atmosphere as a result of some product, mechanism, or activity.product, mechanism, or activity.

Carbon offsettingCarbon offsetting

Carbon offsetting is the process of reducing or Carbon offsetting is the process of reducing or neutralizing the net carbon emissions of an neutralizing the net carbon emissions of an individual or other entity by other actions. The individual or other entity by other actions. The intended purpose of this reduction is to combat intended purpose of this reduction is to combat global warming.global warming.

Offsetting is often coupled with carbon foot-Offsetting is often coupled with carbon foot-printing to determine how much carbon must printing to determine how much carbon must be offset.be offset.

Qualities of a good eco-Qualities of a good eco-labellabel

Gains the attention of shoppers.Gains the attention of shoppers. Well-presented information that does not Well-presented information that does not

burden or delay shoppers.burden or delay shoppers. Information that comes from a trustworthy Information that comes from a trustworthy

source.source. Information is communicated to people in Information is communicated to people in

language and terms they can understand.language and terms they can understand. Labels must compensate for the lack of expert Labels must compensate for the lack of expert

scientific knowledge in the majority of the scientific knowledge in the majority of the populace.populace.

Types of Labeling Types of Labeling InitiativesInitiatives Mandatory Labeling RequirementsMandatory Labeling Requirements

Eco-labels are sometimes mandated by a Eco-labels are sometimes mandated by a governmental body or trade association. governmental body or trade association.

Voluntary Private InitiativesVoluntary Private Initiatives Corporations have recently, and increasing numbers, Corporations have recently, and increasing numbers,

planned or set internal goals and standards for eco-planned or set internal goals and standards for eco-labeling.labeling.

Certification ProgramsCertification Programs Non-profit organizations and occasionally Non-profit organizations and occasionally

government agencies set standards for eco-labels.government agencies set standards for eco-labels. Examples include Fair Trade, Quality Assurance Examples include Fair Trade, Quality Assurance

International, and USDA Organic.International, and USDA Organic.

Precedents in the United Precedents in the United StatesStates

The United States seems to lack the political The United States seems to lack the political will to mandate eco-labels, and American will to mandate eco-labels, and American corporations of most industries lack incentives corporations of most industries lack incentives to initiate their own voluntary schemes. But to initiate their own voluntary schemes. But there are precedents on the state level and there are precedents on the state level and within certain industries. within certain industries.

While eco-labeling has less momentum and While eco-labeling has less momentum and sophistication in the United States, there is sophistication in the United States, there is great potential because of the nation’s wealth great potential because of the nation’s wealth and incredible levels of consumption. and incredible levels of consumption.

Energy StarEnergy Star

Energy Star is a certification program of the US Energy Star is a certification program of the US Environmental Protection Agency and the US Environmental Protection Agency and the US Department of Energy.Department of Energy.

Energy StarEnergy Star

Appliances and building materials with an Appliances and building materials with an “Energy Star” label meet federal standards of “Energy Star” label meet federal standards of high energy efficiency. By designing products high energy efficiency. By designing products which meet this standard, companies reap the which meet this standard, companies reap the benefit of getting this designation on their benefit of getting this designation on their products which are more desirable to some products which are more desirable to some audiences than are those without.audiences than are those without.

Automobile Emissions Automobile Emissions StickersStickers

EPA has long mandated fuel economy EPA has long mandated fuel economy stickers on new automobiles sold in the stickers on new automobiles sold in the US, but the stickers contained only US, but the stickers contained only minimal information. minimal information.

The fuel economy figures were also The fuel economy figures were also much higher than what drivers actually much higher than what drivers actually experienced. experienced.

Automobile Emissions Automobile Emissions StickersStickers

Starting with the 2008 year models, new Starting with the 2008 year models, new automobiles sold in the US will have re-automobiles sold in the US will have re-designed EPA emissions stickers. These designed EPA emissions stickers. These stickers will display fuel costs more stickers will display fuel costs more prominently and compare each vehicle’s fuel prominently and compare each vehicle’s fuel economy to the rest of its class. The economy to the rest of its class. The redesign is expected to aid car buyers in redesign is expected to aid car buyers in selecting more fuel efficient cars by selecting more fuel efficient cars by highlighting the annual fuel costs and highlighting the annual fuel costs and incorporating those costs into the total cost of incorporating those costs into the total cost of the vehicle. the vehicle.

Automobile Emissions Automobile Emissions StickersStickers

Notably, the new stickers are not Notably, the new stickers are not associated with any new fuel economy associated with any new fuel economy standards for automakers – fleets are standards for automakers – fleets are free to be as inefficient as they were free to be as inefficient as they were before the new stickers. before the new stickers.

The EPA StickerThe EPA Sticker

California StickersCalifornia Stickers

California is poised to require labels detailing California is poised to require labels detailing average carbon emissions on all new cars sold average carbon emissions on all new cars sold in the state, starting with the 2009 models. The in the state, starting with the 2009 models. The California Air Resources Board is expected to California Air Resources Board is expected to approve the stickers in June 2007.approve the stickers in June 2007.

The stickers will include an estimate of the The stickers will include an estimate of the annual carbon emissions of that vehicle. The annual carbon emissions of that vehicle. The information will likely be incorporated with information will likely be incorporated with EPA’s fuel economy and exhaust-emission EPA’s fuel economy and exhaust-emission labels.labels.

Proposed Cloned Food Proposed Cloned Food LabelsLabels

The California legislature is voting on a The California legislature is voting on a bill that would require foods from cloned bill that would require foods from cloned livestock to be labeled as such.livestock to be labeled as such.

California as an early adopter?California as an early adopter?

Other US PrecedentsOther US Precedents

Leadership in Energy and Environmental Leadership in Energy and Environmental DesignDesign

USDA Organic certificationUSDA Organic certification Fair Trade coffee certificationsFair Trade coffee certifications Non-governmental organization (NGO) Non-governmental organization (NGO)

organic certificationsorganic certifications NGO sustainability certificationsNGO sustainability certifications

TESCO – A voluntary TESCO – A voluntary private initiative.private initiative.

TESCO, the largest retailer in the TESCO, the largest retailer in the United Kingdom, committed itself to United Kingdom, committed itself to putting a new type of carbon-count putting a new type of carbon-count label on every one of its 70,000 label on every one of its 70,000 products. products.

The UK’s Walmart?The UK’s Walmart?

TESCOTESCO

The labels are planned to include indirect The labels are planned to include indirect greenhouse emissions given off during its greenhouse emissions given off during its production and processing.production and processing.

““So that shoppers can compare carbon costs in So that shoppers can compare carbon costs in the same way they can compare salt content the same way they can compare salt content and calorie counts.”and calorie counts.”

Airplane symbols – Airplane symbols – voluntary private voluntary private initiatives.initiatives.

All food products at TESCO that were air-All food products at TESCO that were air-freighted into the UK will carry an airplane freighted into the UK will carry an airplane symbol. symbol.

Marks & Spencer, another supermarket chain, Marks & Spencer, another supermarket chain, is planning a similar symbol on their air-is planning a similar symbol on their air-freighted products.freighted products.

Airplane SymbolsAirplane Symbols

Not a new concept: a few decades ago, Not a new concept: a few decades ago, fresh beans flown to Britain from Kenya fresh beans flown to Britain from Kenya were labeled with an aircraft symbol. were labeled with an aircraft symbol. But that was done to denote freshness, But that was done to denote freshness, essentially boasting that "they come essentially boasting that "they come from afar but they got here fast". Now from afar but they got here fast". Now they will underscore the ridiculous they will underscore the ridiculous energy expenditures now energy expenditures now commonplace due to cheap fossil fuels.commonplace due to cheap fossil fuels.

Airplane SymbolsAirplane Symbols

1 kg of kiwi flown from New Zealand to Europe 1 kg of kiwi flown from New Zealand to Europe discharges 5 kg of carbon; carrying 100 grams discharges 5 kg of carbon; carrying 100 grams of beans from Kenya to London by air releases of beans from Kenya to London by air releases at least 340 grams of carbon dioxide into the at least 340 grams of carbon dioxide into the atmosphere.atmosphere.

TESCO has pledged to fly in less than 1% of its TESCO has pledged to fly in less than 1% of its products compared with the current 2%-3%.products compared with the current 2%-3%.

Difficulties in Eco-Difficulties in Eco-labelinglabeling

Accurate calculation of impactAccurate calculation of impact Where in the product’s history do we draw a Where in the product’s history do we draw a

line?line?

Where do we draw the Where do we draw the line?line?

Exactly what emissions should be counted? Indirect Exactly what emissions should be counted? Indirect emissions are far more difficult to calculate than direct emissions are far more difficult to calculate than direct emissions, which may be as simple as a sensor on a emissions, which may be as simple as a sensor on a smokestack or tailpipe. smokestack or tailpipe.

Should supermarkets include the electricity used to Should supermarkets include the electricity used to refrigerate products in their stores? refrigerate products in their stores?

Where do we draw the Where do we draw the line?line?

What about the fuel in the tractors What about the fuel in the tractors on a farm thousands of miles on a farm thousands of miles away? away?

What about the fuel in the cars the What about the fuel in the cars the farmworkers drive to get to work? farmworkers drive to get to work?

What if the electricity used is non-What if the electricity used is non-renewable, rather than fossil-fuel?renewable, rather than fossil-fuel?

““Food miles” simplicityFood miles” simplicity

Because it only measures the distance and weight of Because it only measures the distance and weight of the food, “food miles” does not take into account the the food, “food miles” does not take into account the complete embodied energy of a product.complete embodied energy of a product.

For example, a product grown outdoors in a warm For example, a product grown outdoors in a warm country and imported by air may the same carbon country and imported by air may the same carbon footprint as a product grown out-of-season, locally, in footprint as a product grown out-of-season, locally, in a heated greenhouse.a heated greenhouse.

Calculation ExpensesCalculation Expenses

Related to the question of where to draw the Related to the question of where to draw the line in calculating energy and carbon footprints line in calculating energy and carbon footprints is the potential expense in calculating them for is the potential expense in calculating them for every single product made.every single product made.

Calculation ExpensesCalculation Expenses

One solution would be to only mandate One solution would be to only mandate the calculations for products which are the calculations for products which are sold in quantities above a specific sold in quantities above a specific threshold, or have a value over a threshold, or have a value over a different threshold.different threshold.

Skepticism towards Skepticism towards sciencescience

With many Americans still doubting the With many Americans still doubting the existence of climate change, will they existence of climate change, will they even care? Even those who even care? Even those who acknowledge the existence of climate acknowledge the existence of climate change: will they sense a strong change: will they sense a strong enough connection between the energy enough connection between the energy and carbon associated with their and carbon associated with their purchases and climate change?purchases and climate change?

Potential impact on less-Potential impact on less-developed nations’ developed nations’ economieseconomies

Some argue that even if flying food in from the Some argue that even if flying food in from the developing world produces more emissions, it developing world produces more emissions, it should be permitted to an extent to boost to should be permitted to an extent to boost to trade and development in the exporting trade and development in the exporting countries.countries.

Protectionist and anti-globalization arguments.Protectionist and anti-globalization arguments.

Untested effectiveness – Untested effectiveness – will anyone care?will anyone care?

PricePrice Brand loyaltyBrand loyalty MarketingMarketing

Psychological effect?Psychological effect?

There has not been an opportunity to There has not been an opportunity to test it on a large scale, but a test it on a large scale, but a widespread eco-labeling regime could widespread eco-labeling regime could have powerful, beneficial subconscious have powerful, beneficial subconscious effects on consumers.effects on consumers.

Improvements in Improvements in EfficiencyEfficiency

Greater efficiency in manufacturing, Greater efficiency in manufacturing, distribution, and packagingdistribution, and packaging

Labeling requirements, or even Labeling requirements, or even expectations, force manufacturers, expectations, force manufacturers, distributors, and marketers to re-distributors, and marketers to re-consider their practices and may consider their practices and may convince them to change for the better. convince them to change for the better.

Sources (I)Sources (I)

Regulatory Announcement: EPA Issues New Test Methods for Regulatory Announcement: EPA Issues New Test Methods for Fuel Economy Window Stickers, Fuel Economy Window Stickers, http://www.epa.gov/fueleconomy/420f06069.htmhttp://www.epa.gov/fueleconomy/420f06069.htm (December, (December, 2006).2006).

Motivating Home Energy Action - A Handbook of What Works,Motivating Home Energy Action - A Handbook of What Works, http://http://www.greenhouse.gov.au/local/motivating/info.htmlwww.greenhouse.gov.au/local/motivating/info.html (April, (April, 2000).2000).

Aaron C. Davis, Aaron C. Davis, Calif. bill requires cloned food labels,Calif. bill requires cloned food labels, http://news.yahoo.com/s/ap/20070417/ap_on_sc/cloned_foodhttp://news.yahoo.com/s/ap/20070417/ap_on_sc/cloned_food (Apr 17, 2007).(Apr 17, 2007).

John Scott, John Scott, Rational Choice Theory, Understanding Rational Choice Theory, Understanding Contemporary Society: Theories of The PresentContemporary Society: Theories of The Present, (G. Browning, A. , (G. Browning, A. Halcli, and F. Webster, eds., Sage Publications 2000). Halcli, and F. Webster, eds., Sage Publications 2000).

Sources (II)Sources (II)

You’ve checked the price and calorie count, now here’s You’ve checked the price and calorie count, now here’s the carbon cost: Supermarket giant to introduce the carbon cost: Supermarket giant to introduce emission labels Tesco promises 'green consumption emission labels Tesco promises 'green consumption revolutionrevolution, The Guardian (January 19, 2007)., The Guardian (January 19, 2007).

State set to require auto emission labelsState set to require auto emission labels, Los Angeles , Los Angeles Times (February 24, 2007). Times (February 24, 2007).

Kenya: Targeting EU Flower MarketKenya: Targeting EU Flower Market, Africa News , Africa News (March 2, 2007).(March 2, 2007).

Adam, David, Adam, David, G2: Ethical living: Emission impossibleG2: Ethical living: Emission impossible?, ?, The Guardian (January 25, 2007).The Guardian (January 25, 2007).

Rigby, Elizabeth and Harvey, Fiona, Rigby, Elizabeth and Harvey, Fiona, Leahy loses sleep Leahy loses sleep over Tesco 'carbon calorie counters' planover Tesco 'carbon calorie counters' plan, Financial , Financial Times (January 20, 2007).Times (January 20, 2007).

Sources (III)Sources (III)

http://www.weathervane.rff.org/http://www.weathervane.rff.org/ http://www.energystar.gov/http://www.energystar.gov/ http://http://

www.usgbc.org/DisplayPage.aspx?Categwww.usgbc.org/DisplayPage.aspx?CategoryIDoryID=19=19