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.
Why labels?
 Global economy
 Rational Choice Theory
 Ingrained psychological effects
Global Economy
 Through advances in
transportation, communications,
and trade agreements over the
past several decades, global trade
is a part of the modern economy.
Rational Choice Theory
 Rational choice theory postulates
that, given relevant information,
consumers have the ability to
weigh the available choices and
rank products according to their
preferences. They will then select
their purchase based upon these
rankings.
Rational Choice Theory

Without labels, consumers have more
difficulty taking into account
environmental and energy concerns
when ranking products. Either they will
not take into account those concerns at
all, or run the risk of making an
inefficient choice due to a faulty
assumption about the environmental or
energy impacts of a product.
Rational Choice Theory
 The Ashridge Business School study:
 69 percent of Tesco shoppers said the
impact on the climate of the food they
bought was important, but they didn’t act
on these concerns because there was no
information about it on the products'
packaging.
Ingrained psychological
effect

There is hope that constant exposure to
labels which explain the energy or
carbon footprint of products will have a
lasting subconscious impact on
consumers.
Types of Labels



Energy efficiency labels
“Food miles”
Carbon foot-printing
Energy-efficiency Labels


Energy efficiency labels list the rate of energy
used to accomplish a particular task.
Examples of energy efficiency labels include
those on appliances, fuel-efficiency of cars,
and florescent light bulbs.
 An energy efficiency
label from the EU.
“Food Miles”


At the most basic level, “food miles” calculates
the distance traveled by a food product, or a
product’s components, to reach the point of
sales.
“Food miles” is one way for consumers to
prefer locally-produced foods over distantlyproduced, often air-transported foods.
Carbon Foot-printing
 Carbon footprint is a measure of the
carbon – a greenhouse gas – emitted
into the atmosphere as a result of some
product, mechanism, or activity.
Carbon offsetting


Carbon offsetting is the process of reducing or
neutralizing the net carbon emissions of an
individual or other entity by other actions. The
intended purpose of this reduction is to combat
global warming.
Offsetting is often coupled with carbon footprinting to determine how much carbon must
be offset.
Qualities of a good ecolabel




Gains the attention of shoppers.
Well-presented information that does not
burden or delay shoppers.
Information that comes from a trustworthy
source.
Information is communicated to people in
language and terms they can understand.

Labels must compensate for the lack of expert
scientific knowledge in the majority of the
populace.
Types of Labeling
Initiatives

Mandatory Labeling Requirements


Voluntary Private Initiatives


Eco-labels are sometimes mandated by a
governmental body or trade association.
Corporations have recently, and increasing numbers,
planned or set internal goals and standards for ecolabeling.
Certification Programs


Non-profit organizations and occasionally
government agencies set standards for eco-labels.
Examples include Fair Trade, Quality Assurance
International, and USDA Organic.
Precedents in the United
States


The United States seems to lack the political
will to mandate eco-labels, and American
corporations of most industries lack incentives
to initiate their own voluntary schemes. But
there are precedents on the state level and
within certain industries.
While eco-labeling has less momentum and
sophistication in the United States, there is
great potential because of the nation’s wealth
and incredible levels of consumption.
Energy Star

Energy Star is a certification program of the US
Environmental Protection Agency and the US
Department of Energy.
Energy Star
 Appliances and building materials with an
“Energy Star” label meet federal standards of
high energy efficiency. By designing products
which meet this standard, companies reap the
benefit of getting this designation on their
products which are more desirable to some
audiences than are those without.
Automobile Emissions
Stickers


EPA has long mandated fuel economy
stickers on new automobiles sold in the
US, but the stickers contained only
minimal information.
The fuel economy figures were also
much higher than what drivers actually
experienced.
Automobile Emissions
Stickers

Starting with the 2008 year models, new
automobiles sold in the US will have redesigned EPA emissions stickers. These
stickers will display fuel costs more
prominently and compare each vehicle’s fuel
economy to the rest of its class. The
redesign is expected to aid car buyers in
selecting more fuel efficient cars by
highlighting the annual fuel costs and
incorporating those costs into the total cost of
the vehicle.
Automobile Emissions
Stickers

Notably, the new stickers are not
associated with any new fuel economy
standards for automakers – fleets are
free to be as inefficient as they were
before the new stickers.
The EPA Sticker
California Stickers


California is poised to require labels detailing
average carbon emissions on all new cars sold
in the state, starting with the 2009 models. The
California Air Resources Board is expected to
approve the stickers in June 2007.
The stickers will include an estimate of the
annual carbon emissions of that vehicle. The
information will likely be incorporated with
EPA’s fuel economy and exhaust-emission
labels.
Proposed Cloned Food
Labels
 The California legislature is voting on a
bill that would require foods from cloned
livestock to be labeled as such.
 California as an early adopter?
Other US Precedents
 Leadership in Energy and Environmental
Design
 USDA Organic certification
 Fair Trade coffee certifications
 Non-governmental organization (NGO)
organic certifications
 NGO sustainability certifications
TESCO – A voluntary
private initiative.

TESCO, the largest retailer in the
United Kingdom, committed itself to
putting a new type of carbon-count
label on every one of its 70,000
products.
The UK’s Walmart?
TESCO


The labels are planned to include indirect
greenhouse emissions given off during its
production and processing.
“So that shoppers can compare carbon costs in
the same way they can compare salt content
and calorie counts.”
Airplane symbols – voluntary
private initiatives.


All food products at TESCO that were airfreighted into the UK will carry an airplane
symbol.
Marks & Spencer, another supermarket chain,
is planning a similar symbol on their airfreighted products.
Airplane Symbols

Not a new concept: a few decades ago,
fresh beans flown to Britain from Kenya
were labeled with an aircraft symbol.
But that was done to denote freshness,
essentially boasting that "they come
from afar but they got here fast". Now
they will underscore the ridiculous
energy expenditures now
commonplace due to cheap fossil fuels.
Airplane Symbols


1 kg of kiwi flown from New Zealand to Europe
discharges 5 kg of carbon; carrying 100 grams
of beans from Kenya to London by air releases
at least 340 grams of carbon dioxide into the
atmosphere.
TESCO has pledged to fly in less than 1% of its
products compared with the current 2%-3%.
Difficulties in Eco-labeling

Accurate calculation of impact

Where in the product’s history do we draw a
line?
Where do we draw the
line?


Exactly what emissions should be counted? Indirect
emissions are far more difficult to calculate than direct
emissions, which may be as simple as a sensor on a
smokestack or tailpipe.
Should supermarkets include the electricity used to
refrigerate products in their stores?
Where do we draw the
line?
 What about the fuel in the tractors
on a farm thousands of miles
away?
 What about the fuel in the cars the
farmworkers drive to get to work?
 What if the electricity used is nonrenewable, rather than fossil-fuel?
“Food miles” simplicity


Because it only measures the distance and weight of
the food, “food miles” does not take into account the
complete embodied energy of a product.
For example, a product grown outdoors in a warm
country and imported by air may the same carbon
footprint as a product grown out-of-season, locally, in
a heated greenhouse.
Calculation Expenses

Related to the question of where to draw the
line in calculating energy and carbon footprints
is the potential expense in calculating them for
every single product made.
Calculation Expenses
 One solution would be to only mandate
the calculations for products which are
sold in quantities above a specific
threshold, or have a value over a different
threshold.
Skepticism towards
science

With many Americans still doubting the
existence of climate change, will they
even care? Even those who
acknowledge the existence of climate
change: will they sense a strong
enough connection between the energy
and carbon associated with their
purchases and climate change?
Potential impact on lessdeveloped nations’
economies


Some argue that even if flying food in from the
developing world produces more emissions, it
should be permitted to an extent to boost to
trade and development in the exporting
countries.
Protectionist and anti-globalization arguments.
Untested effectiveness –
will anyone care?
 Price
 Brand loyalty
 Marketing
Psychological effect?

There has not been an opportunity to
test it on a large scale, but a
widespread eco-labeling regime could
have powerful, beneficial subconscious
effects on consumers.
Improvements in
Efficiency


Greater efficiency in manufacturing,
distribution, and packaging
Labeling requirements, or even
expectations, force manufacturers,
distributors, and marketers to reconsider their practices and may
convince them to change for the better.
Sources (I)
 Regulatory Announcement: EPA Issues New Test Methods for
Fuel Economy Window Stickers,
http://www.epa.gov/fueleconomy/420f06069.htm (December,
2006).
 Motivating Home Energy Action - A Handbook of What Works,
http://www.greenhouse.gov.au/local/motivating/info.html (April,
2000).
 Aaron C. Davis, Calif. bill requires cloned food labels,
http://news.yahoo.com/s/ap/20070417/ap_on_sc/cloned_food (Apr
17, 2007).
 John Scott, Rational Choice Theory, Understanding Contemporary
Society: Theories of The Present, (G. Browning, A. Halcli, and F.
Webster, eds., Sage Publications 2000).
Sources (II)
 You’ve checked the price and calorie count, now here’s
the carbon cost: Supermarket giant to introduce
emission labels Tesco promises 'green consumption
revolution, The Guardian (January 19, 2007).
 State set to require auto emission labels, Los Angeles
Times (February 24, 2007).
 Kenya: Targeting EU Flower Market, Africa News
(March 2, 2007).
 Adam, David, G2: Ethical living: Emission impossible?,
The Guardian (January 25, 2007).
 Rigby, Elizabeth and Harvey, Fiona, Leahy loses sleep
over Tesco 'carbon calorie counters' plan, Financial
Times (January 20, 2007).
Sources (III)
 http://www.weathervane.rff.org/
 http://www.energystar.gov/
 http://www.usgbc.org/DisplayPage.aspx?
CategoryID=19