The Potential Role of Carbon Labeling in a Green Economy

May 7, 2012

The Potential Role of Carbon Labeling in a Green Economy
RFF Feature
May 7, 2012Green certified check

Growing consumer interest in “green” products has led many companies to develop and market products with environmental attributes—a significant number of which claim to focus on reducing carbon emissions. This approach, carbon labeling, clearly identifies the carbon footprint—the total amount of greenhouse gas emissions required to create, distribute, and use a consumer product—allowing consumers to make more informed purchasing decisions. Manufacturers and firms whose goods possess a positive environmental attribute to consumers have incentive to disclose this information and, presumably, increase sales and brand reputation among eco-conscious consumers. Still, the question remains: can this kind of labeling bring about meaningful reductions in carbon emissions?

In a new discussion paper, RFF University Fellow Mark Cohen and Michael Vandenbergh examine industry and market studies of product sales and consumer surveys of label awareness. They find that global third-party monitors play an integral role in setting standards and providing credible product information. The authors note the importance of considering the entire life cycle of a given product to develop a global standard for measuring and reporting.

While significant challenges to establishing effective programs for carbon labeling exist, Cohen and Vandenbergh assert that careful analysis and selection of product categories could ultimately bring about meaningful reductions in carbon emissions. ​